Question

You are an internal auditing supervisor who is reviewing the working papers of a staff internal auditor's overall examination of the firm's sales function. The pages are not numbered or cross-referenced. Furthermore, the working papers were dropped and reassembled at random before they were brought to you. You decide to put the working papers in the proper order according to the Standards. The first stage of this activity is to identify each page as a part of the preliminary survey, the review of the adequacy of control processes, the review for effectiveness of control processes, or the review of results.

Question
The first page the supervisor selects documents a test of controls performed during the course of the engagement. This page belongs with which activity?
A. Preliminary survey.
B. Review for effectiveness of control processes.
C. Review for adequacy of control processes.
D. Review of results.

Answer 1

The page documenting a test of controls is associated with the review for effectiveness of control processes in an internal audit, as it evaluates how well the controls work in practice.

Step-by-step explanation:

If the first page selected by the supervisor documents a test of controls performed during the course of the engagement, it should be identified as part of the review for effectiveness of control processes. The test of controls is conducted to determine whether the controls in place are being applied in the manner intended and are effective in mitigating risks to an acceptable level. This process goes beyond simply assessing if controls exist (adequacy), as it evaluates how well they function over time.