An internal auditor is conducting an assurance engagement. One engagement objective is to evaluate the project manager’s effectiveness at controlling project costs. Which of the following audit tests should be included in the engagement program?
A.
Prepare a bank reconciliation statement for all the bank accounts of the organization
B.
Track a sample of project payments from accounts payable to concluded agreements and authorization rights
C.
Validate the accuracy of assumptions and inputs used for calculations in the project’s feasibility model
D.
Investigate whether the budget of the project was approved timely as required by internal policies
To evaluate the project manager’s effectiveness at controlling costs, the auditor should verify whether payments are properly authorized, valid, and consistent with agreements. The most direct test is to track a sample of project payments (B) from accounts payable back to contracts and authorizations. This demonstrates whether project expenditures were controlled and aligned with agreements. Bank reconciliations (A) are unrelated to project-level cost control. Validating feasibility model assumptions (C) relates to project planning, not ongoing cost control. Checking budget approval timing (D) relates to compliance but not cost management effectiveness. Therefore, Option B best aligns with the engagement objective.
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