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1. Which of the following represents appropriate evidence of supervisory review of engagement workpapers?
- A.Supervisor's initials on the final workpaper and on the engagement workpaper review checklist
- B.Performance appraisals that assess the quality of workpapers prepared by auditors and memoranda specifying the nature, extent, and results of the supervisory review of workpapers
- C.Supervisor's initials on each workpaper, engagement workpaper review checklist, and memorandum specifying the nature, extent, and results of the supervisory review of workpapers✓ Correct
- D.Tick marks next to all auditable items on each workpaper page along with a legend that explains the nature of all supervisory tick marks and includes a final supervisor signature
Explanation
Acceptable evidence includes initials on each workpaper, a review checklist, and a memo of review scope/results. Performance appraisals and supervisory tick marks are insufficient.
2. Which of the following statements regarding the review of workpapers is true?
- A.Engagement workpapers should be approved by the client after completion.
- B.Workpapers should be initialed and dated by the reviewer as evidence of supervisory review.✓ Correct
- C.Workpapers that pertain to legal issues should be reviewed to ensure that all audit opinions and details are recorded.
- D.Workpaper review notes should be retained for all engagements.
Explanation
Initials and dates by the reviewer (or electronic approval) are appropriate evidence of supervisory review; client approval is not required.
3. Which statement best describes how review of workpapers may aid in the professional development of internal audit staff?
- A.It validates that the work completed could be re-performed by another internal auditor.
- B.It ensures that any changes to the approved engagement program are justified and authorized.
- C.It demonstrates whether designated auditors were collectively competent to perform the engagement.✓ Correct
- D.It ensures that engagement objectives are met.
Explanation
Review lets the supervisor assess and coach the team’s collective competence and identify development needs.
4. What action during the reporting phase should trigger the audit supervisor to document?
- A.Initial terms of reference are drafted.
- B.Business management feedback is solicited and followed up on where necessary.✓ Correct
- C.The inclusion of criteria, condition, effect, root causes, and recommendations and action plans.
- D.Records of interviews are prepared for interviews held.
Explanation
During reporting, supervisors document that management feedback was obtained and follow-ups tracked.
5. The Standards specify supervision be carried out "continuously." Which statement is correct?
- A.The extent and nature of supervision is documented separately from the working papers for engagements.
- B."Continuously" means the supervisor must personally perform all phases of the audit.
- C."Continuously" indicates supervision should occur throughout planning, examination, evaluation, reporting, and follow-up.✓ Correct
- D."Supervision" does not include training or other administrative matters.
Explanation
Supervision spans all engagement phases and is documented in the workpapers.
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