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CIMAPRO19-P03-1 Exam - Topic 3 Question 10 Discussion

JKL is a retailer with more than 45 shops around the country. The directors suspect that a serious fraud has occurred at one of the branches and a team of internal auditors has been sent to investigateAn analytical review investigation shows that sales revenue is in line with budget, but overtime payments to shop staff exceed budget by 20%.How should the internal audit team proceed?
B) Conduct additional detailed testing on overtime payments
A) Increase the evaluation of control risk
C) Increase the evaluation of inherent risk
D) Conduct additional detailed testing of all figures.

CIMAPRO19-P03-1 Exam - Topic 3 Question 10 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam
Question #: 10
Topic #: 3
[All CIMAPRO19-P03-1 Questions]

JKL is a retailer with more than 45 shops around the country. The directors suspect that a serious fraud has occurred at one of the branches and a team of internal auditors has been sent to investigate

An analytical review investigation shows that sales revenue is in line with budget, but overtime payments to shop staff exceed budget by 20%.

How should the internal audit team proceed?

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Suggested Answer: B

by Kattie at May 10, 2022, 12:17 AM

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Kristin
10 months ago
I’d want to see more details on those overtime claims!
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Arleen
10 months ago
Increasing control risk seems a bit vague, though.
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Brandon
11 months ago
Wait, why are sales fine but overtime is so high? That’s suspicious.
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Jani
11 months ago
I agree, option B makes the most sense here.
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Paz
11 months ago
Sounds like they should definitely look into those overtime payments.
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Paola
11 months ago
Yikes, this is a high-stakes situation. I'm a little unsure - should I give insulin or sugar? I'll need to double-check my first aid knowledge to make the right call here.
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Mammie
11 months ago
I think I've got a good handle on this. Internal metrics are about the TAS system itself, while external metrics are about the impact on the overall system or user experience. I'll go with my best guess.
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