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In preparing for an audit of the footwear division of a major retail organization, an internal auditor gathered the following information about the organization's stores:
In addition to labor costs, the other costs associated with each store are leasing and maintenance expenses. Which of the following is a valid conclusion?
A. Gross margin is directly related to the size of the store.
B. Sales per store are directly related to the size of the store.
C. Cost of goods sold is directly related to the size of the store.
D. Employees are less productive in larger stores.
Answer: B
NEW QUESTION # 33
Which of the following is an advantage of using nongovernmental organization (NGO) members on an assurance team when auditing corporate social responsibility?
A. NGO members are often more unbiased and objective.
B. Typically less time is needed to train the NGO members on the audit process.
C. A report with a positive statement from an NGO member is deemed to be more credible.
D. As opposed to auditors, NGO members are licensed to audit corporate social responsibility.
Answer: A
NEW QUESTION # 34
With regard to external assessments of an internal audit activity (IAA), which of the following is the chief audit executive required to discuss with the board?
A. The simplest way for the external reviewer to join the IAA's organization, and the timeline of the external assessment.
B. External reviewer conflicts of interest, and the need for an external assessment more frequently than once every five years.
C. External reviewer conflicts of interest, and the timeline of the external assessment.
D. The need for an external assessment more frequently than once every five years, and the simplest method for the external reviewer to join the IAA's organization.
Answer: B
NEW QUESTION # 35
According to MA guidance, which of the following statements is true regarding internal auditors' use of technology-based techniques?
A. Auditors must consider using technology if it advances the engagement, even when implementation costs exceed the benefits.
B. Auditors must considering using technology to reduce the organization's risk by detecting all instances of fraud.
C. Auditors must consider using technology only when the Implementation cost does not exceed benefits.
D. Auditors must consider using technology in a variety of engagements to ensure that their work is substantiated and infallible.
Answer: C
NEW QUESTION # 36
Which of the following best describes the role of internal control frameworks?
A. They serve as a list of appropriate internal controls for auditors to ensure an organization is using best practices.
B. They serve as a template for identifying standardized best practices in effective risk management across industries and countries.
C. They provide guidance related to internal control design and implementation to assist with the evaluation and benchmarking of business practices.
D. They outline specific internal controls for an organization to implement to ensure business objectives will be achieved.
Answer: C
NEW QUESTION # 37
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