APP Auditing Principles & Procedures 2

Question 1

During a procurement audit, the auditor discovers that a buyer consistently awarded contracts to a single vendor without soliciting competing bids. Which audit finding category best describes this situation?

Accepted Answer

Compliance violation

Answer

Bypassing the competitive bidding requirement is a compliance violation because it breaches established procurement policies and regulations.

Question 2

What is the primary purpose of an exit conference at the conclusion of a procurement audit?

Accepted Answer

To present preliminary findings and obtain management's response

Answer

The exit conference allows auditors to present preliminary findings so management can clarify facts and provide initial responses before the final report is issued.

Question 3

An auditor is reviewing purchase orders and notices that several POs lack an authorized signature but were still processed. This is an example of a breakdown in which internal control type?

Accepted Answer

Preventive control

Answer

Authorization requirements are preventive controls designed to stop unauthorized transactions before they occur.

Question 4

Which sampling method is most appropriate when an auditor wants to estimate the total dollar error in a large population of invoices?

Accepted Answer

Monetary unit sampling

Answer

Monetary unit sampling (MUS) weights selections by dollar amount, making it ideal for estimating total dollar misstatement in a population.

Question 5

A procurement auditor wants to verify that goods received match what was ordered and invoiced. Which three-way match procedure should be performed?

Accepted Answer

Match PO, receiving report, and invoice

Answer

The three-way match compares the purchase order, receiving report, and vendor invoice to confirm quantity, price, and item accuracy before payment.

(APP) Accredited Purchasing Practitioner Certification Practice Test

(APP) Accredited Purchasing Practitioner Certification Practice Test

APP Auditing Principles & Procedures 2