IIA IIA-CIA-Part2 Quiz 41 Topic 1 Questions 201-205

Question: 1

An auditor evaluating excessive product rejection rates should investigatE.

I.

Communication between sales and production departments on sales returns.

II.

Volume of product sales year-to-date in comparison to prior year-to-date.

III.

Changes in credit ratings of customers versus sales to those customers.

IV.

Detailed product scrap accounts and accumulations.

AI and III only

BI and IV only

CII, III, and IV only

DI, II, III, and IV.

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Question: 2

What is the primary reason for having audit management approve audit engagement reports?

ATo ensure that client concerns are appropriately addressed.

BTo confirm proper format, grammar, and punctuation.

CTo verify that senior management supports the report's conclusions.

DTo validate that report findings are substantiated.

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Question: 3

Which of the following best defines an audit opinion?

AA summary of the significant audit observations and recommendations.

BAn auditor's evaluation of the effects of the observations and recommendations on the activities reviewed.

CA conclusion which must be included in the audit report.

DA recommendation for corrective action.

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Question: 4

Which of the following is typically not a reason for committing financial statement fraud?

ATo dispel negative market perception.

BTo disguise a duplicate payment to a vendor.

CTo obtain more favorable terms on financing.

DTo receive performance-related bonuses.

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Question: 5

Which of the following is a red flag associated with fictitious revenues?

ASlow growth or unusually low profitability.

BUnusual decrease in the number of days' sales in receivables.

CSubstantial increase in receivables turnover.

DSignificant transactions with related parties.

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IIA IIA-CIA-Part2 Quiz:41 Topic:1 Questions:201-205