IIA IIA-CIA-Part2 Quiz 74 Topic 4 Questions 366-370

Question: 1

The following audit observation was included in the final audit report:

'Our review concluded that bank reconciliation statements for March and April did not show evidence of supervisory review. We recommend strict compliance with the controller's manual, which requires the department head to place their initials on the reconciliation statements to document their review.'

Which of the following attributes are missing from the above audit observation?

1. Criteria.

2. Condition.

3. Cause.

4. Effect.

A1 and 4 only

B2 and 3 only

C1, 3, and 4 only

D3 and 4 only

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Question: 2

Which two of the following considerations must an internal auditor take into account while planning an audit of an accounting system/application that has been in use for the last five years?

* The level and manner of linkages between the business' mission, objectives, and structure and the accounting system/application.

* Presence or absence of computerized and manual controls that address risks.

* Identification of risks at the application level, e.g. availability and security of the system.

* Testing of the system/application for bugs and errors.

A1 and 3 only

B2 and 3 only

C2 and 4 only

D3 and 4 only

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Question: 3

The chief audit executive (CAE) decided that based on management's oral response, the action taken on an audit observation for a minor improvement in the client's process is sufficient and no further follow-up is necessary. Which of the following would be the best statement regarding the action of the CAE?

AThe CAE action is not acceptable, as a follow-up audit is needed to ensure that action is really taken by management.

BThe CAE action is not acceptable, as follow-up on the issue is critical until a written response is obtained from management.

CThe CAE action is acceptable as long as the follow-up is sufficient when weighed against the relative importance of the recommendation.

DThe CAE action is acceptable as long as the issue has been escalated to the board to get their position on the issue.

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Question: 4

Which of the following is a preventive control for fraud?

ADetermining if the number of manually prepared disbursement checks is high.

BReconciling the purchase orders with the requisitions.

CVerifying that new vendors appear on the vendor pre-approved list.

DConducting an inventory count of the warehouse.

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Question: 5

Which of the following statements is not true about the oversight and review of working papers by the chief audit executive (CAE)?

AThe CAE has ultimate responsibility for reviewing working papers and remains accountable for the achievement of objectives and the quality of work.

BThe need for CAE review depends on the proficiency and experience of the internal auditor and the complexity of the task.

CThe CAE is responsible for all significant professional judgments made during the audit process and should therefore personally review working papers to ensure conclusions were professionally arrived at.

DThe CAE, although having overall responsibility for reviewing work completed, can delegate such task to appropriately experienced internal audit staff.

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IIA IIA-CIA-Part2 Quiz:74 Topic:4 Questions:366-370