IIA IIA-CIA-Part2 Quiz 163 Topic 3 Questions 811-815

Question: 1

Accounts payable schedule verification may include the use of analytical information.

Which of the following is analytical information?

AComparing the schedule with the accounts payable ledger or unpaid voucher file.

BComparing the balance on the schedule with the balances of prior years.

CComparing confirmations received from selected creditors with the accounts payable ledger.

DExamining vendors' invoices in support of selected items on the schedule.

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Question: 2

Analytical procedures

AAre considered direct information about the assertion being evaluated.

BInvolve such tests as confirmation of receivables.

CMay provide the best available information for the completeness assertion.

DAre never sufficient by themselves to support management assertions.

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Question: 3

During an engagement, the internal auditor should consider the following factor(s) in determining the extent to which analytical procedures should be used during the engagement:

AAdequacy of the system of internal control.

BSignificance of the area being examined.

CPrecision with which the results of analytical audit procedures can be predicted.

DAll of the answers are correct.

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Question: 4

A small city managed its own pension fund. According to the city charter, investments could be made only in bonds, money market funds, or high-quality stocks. The internal auditor has already verified the existence of the pension fund's assets. The fund balance was not very large and was managed by the city treasurer. The internal auditor decided to estimate income from investments of the fund by multiplying the average fund balance by a weighted-average rate based on the current portfolio mix. Upon doing so, the internal auditor found that recorded return was substantially less than was expected. The internal auditor's next procedure should be to

AInquire of the treasurer as to the reason that income appears to be less than expected.

BPrepare a more detailed estimate of income by consulting a dividend and reporting service that lists the interest or dividends paid on specific stocks and bonds.

CInform management and the board that fraud is suspected and suggest that legal counsel be called in to complete the investigation.

DSelect a sample of entries to the pension fund income account and trace to the cash journal to determine if cash was received.

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Question: 5

An inexperienced internal auditor notified the senior auditor of a significant variance from the engagement client's budget. The senior told the new internal auditor not to worry because the senior had heard that there had been an unauthorized work stoppage that probably accounted for the difference. Which of the following statements is most appropriate?

AThe new internal auditor should have investigated the matter fully and not bothered the senior.

BThe senior used proper judgment in curtailing what could have been a wasteful investigation.

CThe senior should have halted the engagement until the variance was fully explained.

DThe senior should have aided the new internal auditor in formulating a plan for accumulating appropriate information.

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IIA IIA-CIA-Part2 Quiz:163 Topic:3 Questions:811-815