CBS Auditing Principles & Procedures 3

Question 1

Which sampling method gives every item in the population an equal chance of selection?

Accepted Answer

Random sampling

Answer

Random (simple random) sampling ensures every item has an equal probability of being selected, reducing selection bias.

Question 2

An auditor discovers that a budget officer approved their own reimbursement requests without secondary review. This is an example of a failure in:

Accepted Answer

Segregation of duties

Answer

Segregation of duties requires that no single person control all phases of a transaction; self-approval violates this key internal control.

Question 3

In governmental auditing, 'materiality' for compliance purposes is generally set at a level that is:

Accepted Answer

Lower than financial statement materiality

Answer

Compliance materiality is typically set lower than financial statement materiality because even small noncompliance can be significant in a governmental context.

Question 4

Which document formally communicates the auditor's findings, conclusions, and recommendations at the end of a budget audit?

Accepted Answer

Audit report

Answer

The audit report is the formal output that communicates findings, conclusions, and any recommendations to stakeholders.

Question 5

Analytical procedures used during the planning phase of a budget audit are intended to:

Accepted Answer

Identify areas of potential risk or unusual fluctuations

Answer

During planning, analytical procedures help identify unusual relationships or fluctuations that may indicate higher-risk areas requiring more audit attention.

(CBS) Certified Budget Specialist Practice Test

(CBS) Certified Budget Specialist Practice Test

CBS Auditing Principles & Procedures 3