Topic 1: Volume A
Which of the following audit activities is within the scope of assurance activities as stated in
the International Professional Practices Framework?
A.
Review a make-or-buy decision and report a recommendation to management for approval.
B.
Participate in negotiations for a corporate acquisition.
C.
Assess financing alternatives for a new generator.
D.
Perform an evaluation of management's planning process.
Perform an evaluation of management's planning process.
Which of the following corporate travel policies is least likely to be cost-effective?
A.
Negotiating corporate agreements with hotels,airlines,and car rental firms.
B.
Tracking credits for canceled airline reservations.
C.
Selecting the least expensive airline travel available,without regard to total travel time and distance.
D.
Traveling to facilities in tourist areas during the off-season when possible.
Selecting the least expensive airline travel available,without regard to total travel time and distance.
An objective for an audit of a medical research corporation is to evaluate management's
controls to ensure that timely reports are submitted to sponsors of contracted research
projects. In planning the audit to achieve this objective,the auditor should begin by:
A.
Reviewing policies and procedures.
B.
Interviewing a group of research managers.
C.
Observing report preparation in a number of laboratories.
D.
Sending a questionnaire to a sample of research sponsors.
Reviewing policies and procedures.
Which of the following is a role of the board of directors in the governance process?
A.
Conduct periodic assessments of the organization's governance systems.
B.
Obtain assurance concerning the effectiveness of the organization's governance systems.
C.
Implement an effective system of internal controls to support the organization's governance systems.
D.
Review and approve operational goals and objectives.
Obtain assurance concerning the effectiveness of the organization's governance systems.
Management has requested that an internal auditor serve as member of a task force that
will review current receivables practices and make recommendations to improve
processes. Which of the following is the most appropriate response by the internal auditor?
A.
Accept the assignment provided that such consulting services are defined in the charter.
B.
Decline the assignment because participation on task forces will impair the auditor's
objectivity in future audit engagements.
C.
Accept the assignment if the auditor believes that it will not impair objectivity in future audit engagements.
D.
Do not accept the assignment because the assignment is not part of an approved audit plan.
Accept the assignment provided that such consulting services are defined in the charter.
An auditor for a large wholesaler is evaluating the controls over the approval and oversight
of credit sales. Which of the following procedures would be a control weakness?
A.
The credit department is responsible for approving shipments to all customers.
B.
The finance committee of the board of directors periodically reviews credit standards.
C.
Customers who fail to meet credit requirements must pay cash for shipments upon delivery.
D.
The sales department is responsible for determining the credit ratings of customers.
The sales department is responsible for determining the credit ratings of customers.
An organization has developed a large database that tracks employees,employee
benefits,payroll deductions,job classifications,and other similar information. In order to test
whether data currently within the automated system are correct,an auditorshould:
A.
Use test data and determine whether all the data entered are captured correctly in the
updated database.
B.
Select a sample of data to be entered for a few days and trace the data to the updated
database to determine the correctness of the updates.
C.
Use generalized audit software to provide a printout of all employees with invalid job
descriptions. Investigate the causes of the problems.
D.
Use generalized audit software to select a sample of employees from the database.
Verify the data fields.
Use generalized audit software to select a sample of employees from the database.
Verify the data fields.
An internal auditor plans to use an analytical review to verify the correctness of various
operating expenses in a division. The use of an analytical review as a verification technique
would not be a preferred approachif.
A.
The auditor notes strong indicators of a specific fraud involving this account.
B.
The company has relatively stable operations which have not changed much over the past year.
C.
The auditor would like to identify large,unusual,or non-recurring transactions during the year.
D.
The operating expenses vary in relation to other operating expenses,but not in relation to revenue.
The auditor notes strong indicators of a specific fraud involving this account.
Which of the following would be a violation of the IIA Code of Ethics?
A.
Reporting information that could be damaging to the organization,at the request of a court of law.
B.
Including an issue in the final audit report after management has resolved the issue.
C.
Participating in an audit engagement for which the auditor does not have the necessary
experience or training.
D.
Accepting a gift that is a commercial advertisement available to the public.
Participating in an audit engagement for which the auditor does not have the necessary
experience or training.
An organization has a policy requiring two signatures on all checks written for amounts in
excess of $10,000. When evaluating controls over disbursements,an auditor would
conclude that a greater risk existsif.
A.
The auditor located two checks for $9,000 each that contained one authorized signature.
B.
The $10,000 was an immaterial amount to the organization and very few cash
disbursements required an amount in excess of $10,000.
C.
The director of accounting was not one of the authorized signers.
D.
There were several instances in which successively numbered checks for amounts
between $5,000 and $10,000 were made payable to the same vendor.
There were several instances in which successively numbered checks for amounts
between $5,000 and $10,000 were made payable to the same vendor.
An organization's accounts payable function improved its internal controls significantly after
it received an unsatisfactory audit report.
When planning a follow-up audit of the function,what level of detection risk should be
expected if the audit and sampling procedures used are unchanged from the prior audit?
A.
Detection risk is lower because control risk is lower.
B.
Detection risk is lower because control risk is higher.
C.
Detection risk is higher because control risk is lower.
D.
Detection risk is unchanged although control risk is lower.
Detection risk is unchanged although control risk is lower.
Which of the following measurements could an auditor use in an audit of the efficiency of a
motor vehicle inspection facility?
A.
The total number of cars approved.
B.
The ratio of cars rejected to total cars inspected.
C.
The number of cars inspected per inspection agent.
D.
The average amount of fees collected per cashier.
The number of cars inspected per inspection agent.
| Page 3 out of 48 Pages |
| Previous |