IIA IIA-CIA-Part1 Quiz 4 Topic 1 Questions 16-20

Question: 1

When auditing the award of a major contract, which of the following should an internal auditor suspect as a red flag for a bidding fraud scheme?

1. Subsequent change orders increase requirements for low-bid items.

2. Material contract requirements are different on the actual contract than on the request for bids.

3. A high percentage of employees are charged to indirect accounts.

4. Losing bidders are hired as subcontractors.

A1 only

B2 only

C1 and 3.

D2 and 4.

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Question: 2

Which of the following best describes the misdirection of payments on accounts receivable to an employee's bank account?

AFraud open on the books.

BFraud hidden on the books.

CFraud off the books.

DFraud on the balance sheet.

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Question: 3

An organization invests its savings in a volatile stock with the potential for high gains rather than a mutual fund with a lower expected return and lower volatility. This best describes which of the following risk concepts?

ARisk identification.

BRisk appetite.

CRisk capacity.

DRisk tolerance.

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Question: 4

Which segregation of duties would best reduce the risk of payroll fraud?

AHuman resources personnel add employees, and payroll personnel process hours and enter employee bank account numbers. Paychecks are automatically deposited in the employee's bank account.

BHuman resources personnel add employees, payroll personnel process hours, and human resources personnel deliver paychecks to employees.

CHuman resources personnel add employees, review and submit payroll hours to the payroll department for processing, and deliver paychecks to employees.

DHuman resources personnel add employees and enter employee bank information. Payroll personnel process hours, and paychecks are automatically deposited in the employee's bank account.

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Question: 5

An organization is beginning to implement an enterprise risk management program. One of the first steps is to develop a common risk language. Which of the following statements about a common risk language is true?

AManagement will be able to reduce inherent risk because they will have a better understanding of risk.

BInternal auditors will be able to reduce their sample sizes because controls will be more consistent.

CStakeholders will have more assurance that the risks are assessed consistently.

DDecision makers will understand that the likelihood of missing or ineffective controls will be reduced.

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IIA IIA-CIA-Part1 Quiz:4 Topic:1 Questions:16-20