IIA IIA-CIA-Part1 Quiz 121 Topic 5 Questions 601-605

Question: 1

Fraud is most frequently detected by:

AFollowing up on tips from employees or citizens.

BFollowing up on analytical review of high-risk areas.

CPerforming periodic reconciliations over cash and other assets.

DPerforming unannounced audits or reviews of programs or departments.

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Question: 2

After several years in the engineering department, an engineer was transferred to the internal audit department. One month later, the new auditor was assigned to an assurance engagement for the engineering department. When the auditor's former engineering supervisor suggested a change in the sample selection method, the auditor consulted with the audit supervisor. They determined that the suggested method would not be as representative and that the original selection method should be used. In this situation, the auditor:

AMaintained an independent mental attitude and is therefore objective.

BHas subordinated professional judgment, and objectivity is therefore impaired.

CDoes not have objectivity since the auditor recently transferred from the engineering department.

DDoes not have independent organizational status since the auditor recently transferred from the engineering department.

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Question: 3

A charitable organization provides substantial grants for important medical research. Assuming marginal controls are in place, which of the following possible frauds or misuses of organization assets should be considered the area of greatest risk?

ASenior executives are using company travel and entertainment funds for activities that might be considered questionable.

BPurchases of office supplies are made from fictitious vendors.

CGrants are made to organizations associated with senior executives.

DA payroll clerk has added a fictitious employee.

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Question: 4

If earnings on financial statements for internal use only have been manipulated in the past, an internal auditor is likely to focus on which of the following?

AThe proper accrual of payables at the end of the interim period.

BThe timing of revenue recognition and the valuation of inventories.

CWhether accounting estimates are reasonable given past actual results.

DWhether there have been changes in accounting principles that materially affect the financial statements.

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Question: 5

Which of the following procedures would provide the best evidence of the effectiveness of a credit-granting function?

AObserve the process.

BReview the trend in receivables write-offs.

CAsk the credit manager about the effectiveness of the function.

DCheck for evidence of credit approval on a sample of customer orders.

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IIA IIA-CIA-Part1 Quiz:121 Topic:5 Questions:601-605