Audit 101
What is the primary purpose of an internal audit?
A. To punish employees
B. To prepare tax returns
C. To evaluate and improve internal controls
D. To process payroll
C. To evaluate and improve internal controls
According to the State of CT Acceptable Use Policy, which of the following is an acceptable use of CTDOT equipment and/or technology?
A. Making copies of your state tax return
B. Researching venues for a Friday night wine tasting party for friends, some of which are also CTDOT employees.
C. Checking my personal gmail account.
D. Using your State email to contact your Union Steward to arrange for representation.
D. Using your State email to contact your Union Steward to arrange for representation.
True or False
Q: Risk Assessment Procedures are used to obtain an understanding of the entity and its environment, including its internal control.
True
How do findings and recommendations inform decision-making?
A. Highlight areas and suggest actions to improve performance.
B. Tell a unit how to operate
C. Enforce policy and procedures
D. To process payroll
A. Highlight areas and suggest actions to improve performance.
Which of the following are common red flags of fraud and waste?
A. Missing documentation or receipts
B. Unexplained budget overruns
C. Always resistant to audits or oversight
D. All of the above
D. All of the above
Which of the following best defines an audit?
A. A financial report
B. An investigation by the police
C. A systematic and independent examination of records
D. A meeting between managers
C. A systematic and independent examination of records
You are driving a state vehicle to a job site and running late. Telematics flags your vehicle as going over 85 miles an hour. What are the next steps with regards to disciplinary action?
A. Nothing – first time we all get a pass.
B. Driving privileges will be suspended immediately, and subject to investigation for possible discipline.
C. Supervisor will counsel employee but nothing in writing.
D. Retake the Driver training.
B. Driving privileges will be suspended immediately, and subject to investigation for possible discipline.
True or False
Internal Control is a process affected by those charged with governance, management, and other personnel that is designed to provide reasonable assurance about the achievement of the entity’s objectives regarding reliable financial reporting, effective and efficient operations, and compliance with appropriate laws and regulations.
True
Which of the following best defines audit findings and recommendations?
A. Identify specific problems or issues by auditors during an audit
B. Provide relevant financial data to a business
C. Improve communication between management and staff
D. Getting people in trouble for the mistakes that were made
A. Identify specific problems or issues by auditors during an audit
What are some steps we can take to prevent Fraud and Waste?
A. Implementing strong internal controls
B. Regular audits and monitoring
C. Having a person or department that staff and the public can report potential Fraud and waste
D. All of the above
D. All of the above
What are the three main phases of an internal audit?
A. Interviewing, reporting, training
B. Planning, fieldwork, reporting
C. Budgeting, monitoring, implementation
D. Reviewing, revising, reconciling
B. Planning, fieldwork, reporting
TRUE or FALSE
For DBE/SBE subcontractors to count toward the contract goal, they must be certified for the work they’re assigned and perform a commercially useful function using their own staff, equipment, and materials.
TRUE
See- p. 3 “CTDOT Construction Engineering and Inspection Pamphlet for Consulting Engineers.”
What are the financial risk controls for mismanagement of financial resources, fraud, or inaccurate financial reporting?
A. Segregation of duties: Separate responsibilities for approving and recording transactions to reduce the risk of fraud
B. Automated Systems: Implement financial software with built-in controls to ensure accuracy and detect discrepancies
C. Periodic Audits: Regular internal and external audits of financial transactions
D. All the above
D. All the above
What is the main objective of presenting findings and recommendations?
A. Reporting and reconciling financial statements
B. Planning different business/unit strategies
C. Help units improve operations, processes and compliance
D. Provide a general ledger of assets and liabilities
C. Help units improve operations, processes and compliance
TRUE or FALSE
Waste involves the carless or inefficient use of government resources, even if it is not illegal. Unlike fraud, waste may not involve deception but can result from poor planning, unnecessary spending, or failure to use cost effective practices.
TRUE
Which type of audit evaluates whether programs are achieving intended results?
A. Financial audit
B. IT audit
C. Performance audit
D. Compliance audit
C. Performance audit
Under Uniform Grant Guidance, what should a recipient do if there’s uncertainty about whether certain costs are reasonable or allowable under a federal award?
A. Call Ghostbusters
B. Phone home
C. Seek prior written approval of the Federal agency before incurring the cost.
D. Ignore it
C. Seek prior written approval of the Federal agency before incurring the cost.
Which one is not a compliance risk control for transportation regulations (safety, environmental, labor laws) and industry standards?
A. Preventive Maintenance Programs: Regular inspections and maintenance schedules for vehicles and infrastructure
B. Segregation of duties: Separate responsibilities for approving and recording transactions to reduce the risk of fraud
C. Performance Monitoring: Track and report on operational metrices (e.g., on-time delivery rates, fuel efficiency) to detect inefficiencies
D. Training & Standard Operating Procedures: Ensure employees are well-trained and follow standardized procedures for operations
B. Segregation of duties: Separate responsibilities for approving and recording transactions to reduce the risk of fraud
Which of the following would most likely be included as a recommendation by the Internal Audit Team?
A. Conducting an intro conference
B. An investigation by the police
C. Conducting an exit conference
D. Making payments prior to a deadline
D. Making payments prior to a deadline
What is the most common source of fraud detection in an organization?
A. While an audit is being conducted
B. From a tip or whistle blower complaint
C. Internal controls are not strong
D. Mistakes are common in that department
B. From a tip or whistle blower complaint
Which of the following is a key benefit of internal auditing?
A. Reduces the need for financial statements
B. Increases paperwork
C. Strengthens internal controls and promotes accountability
D. Replaces external auditors
C. Strengthens internal controls and promotes accountability
According to Uniform Grant Guidance, 2 CFR 200 Cost Principles, what would be considered an unallowable cost and thereby not eligible for reimbursement?
A. Manager’s Retirement party at Water’s Edge
B. Gift cards as a thank you for coming to work
C. Liquor
D. All of the above
D. All of the above
All of the above. (See 2 CFR section 200.438 Entertainment and prizes, Section 200.423 Alcoholic Beverages)
Which of the following is NOT a safety or security control for preventing accidents, injuries, or theft involving vehicles, employees, or cargo?
A. Incident Reporting Systems: Encourage reporting of accidents and near-misses, and perform root cause analysis to prevent recurrence
B. Security Monitoring: Use GPS tracking for vehicles, surveillance systems, and real-time monitoring for high-value goods
C. Safety Protocols: Implement robust safety protocols and ensure employees are trained in safe operation and emergency procedures
D. Data Encryption: Secure sensitive data both in transit and at rest
D. Data Encryption: Secure sensitive data both in transit and at rest
Where are findings and recommendations typically included in an Audit Report?
A. The introduction
B. First half of the report
C. Second half of the report
D. Conclusion
D. Conclusion
Which of the following would not be considered fraud, waste and abuse.
A. Contractor misrepresents the type or quality of products to reduce cost.
B. Employees forgot to record a petty cash transaction.
C. A DOT employee takes gift cards from a consultant in return for issuing contracts.
D. Contractor misrepresents who did the work so they will be in compliance with the contract.
B. Employees forgot to record a petty cash transaction.