CIG Auditing & Investigations 2 — Questions and Answers
Question 1: During a performance audit, an auditor discovers that management has implemented controls AFTER the audit period. What is the appropriate action?
- Ignore the new controls since they fall outside the audit period
- Document the new controls and note they were implemented after the audit period (Correct answer)
- Expand the audit scope to include the post-period controls
- Issue a qualified opinion due to the untimely control implementation
Correct answer: Document the new controls and note they were implemented after the audit period
Auditors should document subsequent events like post-period control implementations as they may affect the audit findings or recommendations.
Question 2: Which type of audit evidence is generally considered most reliable when auditing a government procurement program?
- Oral representations from procurement officers
- Internal memoranda prepared by program staff
- Original contracts and purchase orders obtained directly from agency files (Correct answer)
- Management-prepared summaries of contract awards
Correct answer: Original contracts and purchase orders obtained directly from agency files
Original source documents obtained directly from agency files are more reliable than summaries or oral representations because they are unaltered primary evidence.
Question 3: An OIG investigator receives an allegation that a federal employee is working a second job during government hours. Which investigative technique is MOST appropriate as a first step?
- Conducting a covert physical surveillance immediately
- Reviewing the employee's time and attendance records (Correct answer)
- Interviewing the employee's supervisor without disclosure
- Issuing a subpoena for the employee's personal financial records
Correct answer: Reviewing the employee's time and attendance records
Reviewing time and attendance records is a non-intrusive first step that can corroborate or refute the allegation before more resource-intensive techniques are employed.
Question 4: The 'three-E's' framework in government performance auditing evaluates programs based on which criteria?
- Ethics, Enforcement, and Effectiveness
- Economy, Efficiency, and Effectiveness (Correct answer)
- Equity, Execution, and Evaluation
- Excellence, Efficiency, and Equity
Correct answer: Economy, Efficiency, and Effectiveness
The three-E's framework—Economy, Efficiency, and Effectiveness—is the foundational standard for evaluating government program performance under GAGAS.
Question 5: When preparing an investigative report, which element distinguishes a finding from an allegation?
- Findings are based on witness testimony while allegations rely on documentary evidence
- Findings are supported by sufficient evidence while allegations are unsubstantiated claims (Correct answer)
- Findings require legal review while allegations do not
- Findings are disclosed publicly while allegations remain confidential
Correct answer: Findings are supported by sufficient evidence while allegations are unsubstantiated claims
A finding is a conclusion supported by sufficient, credible evidence gathered during the investigation, whereas an allegation is an unproven assertion.
Question 6: Under the Inspector General Act, when must an IG notify the agency head and Congress of a particularly serious problem?
- Within 7 days of becoming aware of the problem
- Immediately and in writing under Section 5(d) urgent notification (Correct answer)
- In the next semiannual report only
- Only after completing a full audit or investigation
Correct answer: Immediately and in writing under Section 5(d) urgent notification
Section 5(d) of the IG Act requires immediate written notification to the agency head and Congress of particularly serious or flagrant problems, abuses, or deficiencies.
Question 7: An auditor uses stratified sampling to review grant disbursements. The primary advantage of this technique over simple random sampling is that it:
- Eliminates the need for statistical calculations
- Ensures every transaction has an equal probability of selection
- Allows greater focus on higher-risk or higher-dollar strata (Correct answer)
- Reduces the total number of transactions that must be examined
Correct answer: Allows greater focus on higher-risk or higher-dollar strata
Stratified sampling allows auditors to allocate more sample items to high-risk or high-dollar strata, improving audit efficiency and coverage of material items.
CIG Auditing & Investigations 2
During a performance audit, an auditor discovers that management has implemented controls AFTER the audit period.
What is the appropriate action?