Management Has Asked the Internal Audit Activity to Perform an Operational

question 93

Multiple Choice

Management has asked the internal audit activity to perform an operational audit of a division that recently reported an increase in expenditures in addition to a decrease in profits. However, existing internal audit resources are currently engaged in a legal compliance audit. Which factor would be considered least important in deciding whether resources should be removed from the legal compliance audit to the operational audit?

• A) The increase in expenditures at the division over the past year.
• B) The probability that the legal compliance audit will detect fraud.
• C) The results of the external auditor's most recent financial audit.
• D) The potential for regulatory fines associated with the legal compliance audit.

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Definitions:

Maximum Amount

The highest allowable or attainable value, level, or quantity of something.

Federal Unemployment Taxes

Taxes imposed on employers to fund state workforce agencies and unemployment insurance.

Employer

An individual or organization that hires and pays for the services of workers.

Employee

An individual who works part-time or full-time under a contract of employment, providing labor to an employer for compensation.