IIA IIA-CIA-Part2 Quiz 114 Topic 1 Questions 566-570

Question: 1

An engagement to review payroll is least likely to include

ATests of computations for gross and net wages.

BComparison of payroll costs to budget.

CTracing a sample of employee names to employment records in the personnel department.

DObserving the physical distribution of paychecks.

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Question: 2

The following represents accounts receivable information for a corporation for a 3-year period:

All of the following are plausible explanations for these changes except

AFictitious sales may have been recorded.

BCredit and collection procedures have become ineffective.

CAllowance for bad debts is understated.

DSales returns for credit have been overstated.

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Question: 3

An internal auditor for a large service organization is performing an engagement to review the organization's cash balance. The internal auditor is considering the most appropriate engagement procedure to use to ensure that the amount of cash is accurately recorded on the financial statements. The most appropriate engagement procedures for the objective are

AReview collection procedures and perform an analytical review of accounts receivable; confirm balances of accounts receivable; and verify the existence of appropriate procedures and facilities.

BCompare cash receipt lists to the receipts journal and bank deposit slips; review the segregation of duties, observe, and test cash receipts.

CReview the organizational structure and functional responsibilities; verify the existence and describe protection procedures for unused checks, including security measures.

DExamine bank reconciliations, confirm bank balances, and verify cut off of receipts and disbursements; foot totals of reconciliations and compare to cash account balances.

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Question: 4

As part of a preliminary survey of the purchasing function, an auditor read the department's policies and procedures manual. The auditor concluded that the manual described the processing steps well and contained an appropriate internal control design. The next engagement objective was to determine the operating effectiveness of internal controls. Which procedure would be most appropriate in meeting this objective?

APrepare a flowchart.

BPrepare a system narrative.

CPerform a test of controls.

DPerform a substantive test.

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Question: 5

An engagement objective is to verify that the correct goods or services are received on time, at the right price, and in the right quantity. Based on this objective, the function to be reviewed is the

AReceiving department.

BManufacturing department.

CPayroll department.

DPurchasing department.

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IIA IIA-CIA-Part2 Quiz:114 Topic:1 Questions:566-570