481. A flow chart, made by the auditor, of an entity’s internal control system is a graphic representation that depicts the auditor’s.
A. understanding of the system
B. understanding of fraud risk factors
C. documentation of assessment of control risk
D. Both (a) and (c)

482. Which of the following statements is not correct?
A. Internal risk and control risk cannot be controlled by the management i.e are uncontrollable
B. Detection risk is related directly to they effectiveness of the auditor prosecutor
C. Detection risk related inversely to control risk
D. Internet risk and control risk are highly interrelated

483. The independence of an internal auditor will most likely be assured if he reports to the
A. President Finance
B. President System
C. Managing Director
D. CEO

484. In comparison to the independent auditor  ,an internal auditor is more likely to be concerned with
A. cost accounting system
B. internal control system
C. legal compliance
D. accounting system

485. When an independent auditor decides that the work performed by internal auditors may have bearing on the nature, timing and extent of planned audit procedures, the independent auditor should evaluate objectivity of the internal auditor. The most important factor influencing it would be
A. organizational level to which he reports
B. qualification of internal auditor
C. system of quality control of his work
D. all of the above

486. When an independent auditor relies on the work of an internal auditor, he or she should
A. examine the scope of internal auditor’s work
B. examine the system of supervising review and documentation of internal auditor’s work
C. adequacy of related audit programm
D. all of the above

487. Proper segregation of duties reduces the opportunities in which a person would both
A. establish controls and executes them
B. records cash receipts and cash payments
C. perpetuate errors and frauds and conceals them
D. record the transaction in journal and ledger.

488. Which of following will not affect audit in a CIS environment?
A. The objective of expression of opinion on financial statements
B. Compliance procedures adopted by the auditor
C. Performance of substantive procedures
D. Evaluation of inherent risk and control risk

489. Which of the following statements is not true of the test data approach in a test of computerised accounting system?
A. Test data tests only those controls which the auditor wishes to rely
B. Test data should consist of data related to all controls prevalent in the organization

490. An auditor conducts a surprise check on the pay day (i.e) the day wages and salaries are paid. The primary purpose of this audit procedures is
A. to ensure that there are no ghost workers
B. to ensure the casual workers employed are authorized by the supervisor
C. to test procedures for distributing pay cheques
D. to obtain understanding of internal control system

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