CCA Audit Methodology and Procedures 2

Question 1

During a construction audit, an auditor discovers that the contractor submitted invoices for materials that were never delivered to the job site. This is best classified as:

Accepted Answer

Fraudulent billing

Answer

Invoicing for materials not delivered constitutes fraudulent billing, a serious finding requiring escalation beyond typical audit reporting.

Question 2

Which sampling method is most appropriate when an auditor wants to ensure every item in a population has an equal chance of selection?

Accepted Answer

Random sampling

Answer

Random sampling gives each item in the population an equal probability of selection, reducing selection bias.

Question 3

A CCA auditing a lump-sum construction contract should focus primarily on:

Accepted Answer

Contract compliance, scope changes, and allowances

Answer

Under lump-sum contracts, the auditor's main focus is verifying that scope changes and allowances are properly authorized and documented.

Question 4

The term 'substantial completion' in construction auditing is significant because it typically triggers:

Accepted Answer

The start of the warranty period and punch-list obligations

Answer

Substantial completion marks the point when the owner can use the facility for its intended purpose and starts the warranty and punch-list period.

Question 5

When auditing equipment rental charges on a cost-plus contract, the auditor should compare rental rates against:

Accepted Answer

Published industry rate guides such as the AED Green Book

Answer

Industry rate guides like the AED Green Book provide objective benchmarks for verifying that equipment rental charges are reasonable and customary.

(CCA) Certified Construction Auditor Practice Test

(CCA) Certified Construction Auditor Practice Test

CCA Audit Methodology and Procedures 2