Certified Internal Auditor Research & Evidence-Based Practice 3 — Questions and Answers
Question 1: Which of the following BEST describes the concept of triangulation in audit research?
- Using three auditors to review the same workpapers independently
- Corroborating findings using multiple independent data sources or methods (Correct answer)
- Applying three-way matching for accounts payable transactions
- Dividing the audit population into three equal strata
Correct answer: Corroborating findings using multiple independent data sources or methods
Triangulation involves using multiple sources, methods, or perspectives to corroborate findings, thereby increasing the validity and reliability of audit conclusions.
Question 2: In evidence-based auditing, 'reliability' of evidence refers to:
- The degree to which evidence is available on time
- The probability that evidence accurately reflects the underlying condition (Correct answer)
- How easy it is for management to reproduce the evidence
- The cost of obtaining the evidence relative to its value
Correct answer: The probability that evidence accurately reflects the underlying condition
Reliability reflects whether evidence faithfully represents the actual conditions or transactions being audited, which is fundamental to drawing valid conclusions.
Question 3: An auditor discovers that the results of two different data analysis techniques conflict. The BEST next step is to:
- Use whichever result supports the preliminary audit hypothesis
- Investigate the conflicting results to determine which technique is more appropriate (Correct answer)
- Discard both results and rely solely on interviews
- Report both results without further analysis
Correct answer: Investigate the conflicting results to determine which technique is more appropriate
Conflicting analytical results must be investigated to understand why the discrepancy exists and to determine which technique is most appropriate for the data.
Question 4: The primary purpose of a literature review in an audit research project is to:
- Satisfy documentation requirements in the working papers
- Identify existing knowledge, frameworks, and gaps relevant to the audit topic (Correct answer)
- Replace primary data collection with secondary sources
- Demonstrate the auditor's academic credentials
Correct answer: Identify existing knowledge, frameworks, and gaps relevant to the audit topic
A literature review establishes what is already known, identifies relevant frameworks, and reveals gaps that the current research aims to address.
Question 5: When using regression analysis to evaluate procurement spend, a high R-squared value indicates:
- The model has detected fraud in the dataset
- A large proportion of variation in spend is explained by the selected variables (Correct answer)
- The sample size is too small to be reliable
- All procurement transactions comply with policy
Correct answer: A large proportion of variation in spend is explained by the selected variables
R-squared (coefficient of determination) measures the proportion of variance in the dependent variable explained by the independent variables in the regression model.
Question 6: A control self-assessment (CSA) workshop generates data that is BEST classified as:
- External quantitative evidence
- Primary qualitative data collected directly by the auditor (Correct answer)
- Secondary data sourced from published benchmarks
- Conclusive proof of control effectiveness
Correct answer: Primary qualitative data collected directly by the auditor
CSA workshops produce primary qualitative data because the auditor directly facilitates and collects the information from participants, though it requires corroboration.
Question 7: Which statistical concept is MOST relevant when an auditor wants to determine whether a difference in error rates between two departments is statistically meaningful?
- Confidence interval estimation
- Hypothesis testing with significance testing (Correct answer)
- Stratified random sampling
- Regression to the mean
Correct answer: Hypothesis testing with significance testing
Hypothesis testing with significance testing (e.g., t-tests or chi-square tests) determines whether observed differences are statistically significant or likely due to chance.
Certified Internal Auditor Research & Evidence-Based Practice 3
Which of the following BEST describes the concept of triangulation in audit research?