IIA IIA-CIA-Part2 Quiz 22 Topic 4 Questions 106-110

Question: 1

Which of the following would cause a company's accounts receivable turnover ratio to decrease steadily over a three-year period?

AAn increase in the discount offered for early payment.

BA more liberal credit policy.

CInvoices provided on a weekly rather than a monthly basis.

DIncreased cash sales.

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Question: 2

Which of the following would be the best audit procedure to use to determine if a division's unusually high sales and gross margin for November and December were the result of fraudulently recorded sales?

ATrace a sample of shipping documents to related sales invoices to verify proper billing.

BConfirm accounts receivable balances with customers.

CCompare sales and gross margin totals with those of the previous ten months and the first month of the following year.

DUse regression analysis techniques to estimate the sales and cost of goods sold for November and December.

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Question: 3

Which of the following factors could interfere with effective problem solving by an internal auditor?

1. Reacting to previous experiences with clients.

2. Focusing only on the most likely cause.

3. Correcting the symptoms of problems.

AI only

BIII only

CI and II only

DI, II, and III

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Question: 4

A company owns a machine that will produce 100 light switches in four hours. Due to increased demand, a second machine capable of producing 100 light switches in three hours has been added.

Approximately how many hours will it take to produce 100 light switches using both machines working together?

A7.0

B3.5

C1.7

D0.58

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Question: 5

A limitation of using ratio analysis in an audit engagement is that it:

AOften uses financial information provided by management which has not been reviewed for reliability and validity.

BIs an expensive method of testing.

CRequires computer software in order to develop meaningful interpretations of data.

DIs useful only when comparisons can be made across other industries.

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IIA IIA-CIA-Part2 Quiz:22 Topic:4 Questions:106-110