IIA IIA-CIA-Part2 Quiz 112 Topic 4 Questions 556-560

Question: 1

An auditor testing long-term investments would ordinarily use analytical procedures to ascertain the reasonableness of the

AExistence of unrealized gains or losses in the portfolio.

BCompleteness of recorded investment income.

CClassification between current and non-current portfolios.

DValuation of marketable equity securities.

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Question: 2

Reviewing an edit listing of payroll changes processed during each payroll cycle would most likely reveal

AUndetected errors in the payroll rates of new employees.

BInaccurate payroll deductions.

CLabor hours charged to the wrong account in the cost reporting system.

DA failure to offer employees an opportunity to contribute to their pension plan.

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Question: 3

An engagement objective is to determine if a company's accounts payable contain all outstanding liabilities. Which of the following audit procedures would not be relevant for this objective?

AExamine supporting documentation of subsequent (after-period) cash disbursements and verify period of liability.

BSend confirmations, including zero-balance accounts, to vendors with whom the company normally does business.

CSelect a sample of accounts payable from the accounts payable listing and verify the supporting receiving reports, purchase orders, and invoices.

DTrace receiving reports issued before the period end to the related vendor invoices and accounts payable listing.

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Question: 4

An audit found that the cost of some material installed on capital projects had been

transferred to the inventory account because the capital budget had been exceeded. Which of the following would be an appropriate technique for the internal audit activity to use to monitor this situation?

AIdentify variances between amounts capitalized each month and the capital budget.

BAnalyze a sample of capital transactions each quarter to detect instances in which installed material was transferred to inventory.

CReview all journal entries that transferred costs from capital to inventory accounts.

DCompare inventory receipts with debits to the inventory account and investigate discrepancies.

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Question: 5

Internal auditors may provide consulting services that add value and improve an organization's operations. The performance of these services

AImpairs internal auditors' objectivity with respect to an assurance service involving the same engagement client.

BPrecludes generation of assurance from a consulting engagement.

CShould be consistent with the internal audit activity's empowerment reflected in the charter.

DImposes no responsibility to communicate information other than to the engagement client.

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IIA IIA-CIA-Part2 Quiz:112 Topic:4 Questions:556-560