IIA IIA-CIA-Part2 Quiz 115 Topic 2 Questions 571-575

Question: 1

Which of the following engagement procedures provides the best information about the collectibility of notes receivable?

AConfirmation of note receivable balances with the debtors.

BExamination of notes for appropriate debtors' signatures.

CReconciliation of the detail of notes receivable and the provision for uncollectible amounts to the general ledger control.

DExamination of cash receipts records to determine promptness of interest and principal payments.

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Question: 2

The internal auditor wishes to test the assertion that all claims paid by a medical insurer contain proper authorization and documentation, including but not limited to the validity of the claim from an approved physician and an indication that the claim complies with the claimant's policy. The most appropriate engagement procedure is to select a sample of

AAll policyholders and examine all claims for the sampled items during the year to determine whether the claims were handled properly.

BClaims filed and trace to documentary information about authorization and other supporting documentation.

CClaims denied and determine that all claims denied were appropriate. The claims denied file is much smaller and the internal auditor can obtain greater coverage with the sample size.

DPaid claims from the claims (cash) disbursement file and trace to documentary information about authorization and other supporting documentation.

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Question: 3

Shipments are made from the warehouse based on customer purchase orders. The matched shipping documents and purchase orders are then forwarded to the billing department for sales invoice preparation. The shipping documents are neither accounted for nor prenumbered. Which of the following substantive tests should be extended as a result of this control weakness?

ASelect sales invoices from the sales register and examine the related shipping documents.

BSelect bills of lading from the warehouse and trace the shipments to the related sales invoices.

CFoot the sales register and trace the total to the general ledger.

DTrace quantities and prices on the sales invoice to the customer purchase order and test extensions and footings.

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Question: 4

An organization makes a practice of investing excess short-term cash in marketable equity securities. A reliable test of the valuation of those securities is a

AComparison of cost data with current market quotations.

BConfirmation of securities held by the broker.

CRecalculation of investment carrying amount using the equity method.

DCalculation of premium or discount amortization.

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Question: 5

Subsequent to the acquisition of a new subsidiary, the internal audit activity is validating reports from subsidiary management. Which of the following areas will the internal auditor corroborate with the external organizational counsel?

ACredit lines.

BCollateral arrangements.

CContingency estimates.

DAccounts receivable balances.

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IIA IIA-CIA-Part2 Quiz:115 Topic:2 Questions:571-575