Internal Control Frameworks Practice Test

You are performing an audit of a government entity that administers a benefits program. A recent economic downturn has increased application volume by 40%, and management reassigned experienced reviewers to customer service to handle call volume. As a result, new staff are approving eligibility with limited supervision, and management has not updated its assessment of risks related to improper payments. What is the impact of this external factor on the internal control system?

You are performing a financial statement audit of a not-for-profit that relies on volunteer coordinators at multiple sites. The organization has a code of conduct, but volunteer coordinators are not trained on it, and management cannot demonstrate that coordinators understand reporting channels for suspected misuse of restricted grants. Several coordinators state they “handle issues locally” rather than escalating them. Which internal control component needs strengthening?