An organization health-care insurance costs have been rising approximately 10 percent per year for several years. Which of the following analytical review procedures would best evaluate the reasonableness of the increase in health-care costs?

a. Develop a comparison of the costs incurred with similar costs incurred by other organizations

b. Obtain the government index of health-care costs for the comparable period of time and compare the rate of increase with that of the cost per employee incurred by the organization.

c. Obtain a bid from another health-care administrator to provide the same administrative services as the health-care administrator

d. Review all claims and compare with appropriate procedures to ensure that overpayments have not occurred.

According to IIA guidance, which of the following statements is true regarding the role of the internal audit activity in an engagement outcome follow-up process?

1. The responsibility for follow up should be defined in the internal audit charter

2. Internal auditors should determine the adequacy, effectiveness, and timeliness of corrective actions taken by management

3. The nature, timing, and extent of follow-up should be determined by the audit committee

4. Management should ascertain whether corrective action taken on engagement observations and recommendations remedy the underlying conditions

a. 1 and 2

b. 1 and 4

c. 2 and 3

d. 3 and 4