IIA IIA-CIA-Part2 Quiz 15 Topic 4 Questions 71-75

Question: 1

Which sampling plan requires no additional sampling once the first error is found?

AStratified sampling.

BAttributes sampling.

CStop-or-go sampling.

DDiscovery sampling.

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Question: 2

The most common motivation for management fraud is the existence of:

AVices, such as a gambling habit.

BJob dissatisfaction.

CFinancial pressures on the organization.

DThe challenge of committing the perfect crime.

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Question: 3

Which of the following might alert an auditor to the possibility of fraud in a division?

1. The division is not scheduled for an external audit this year.

2. Sales have increased by 10 percent.

3. A significant portion of management's compensation is directly tied to reported net income of the division.

AI only

BIII only

CI and II only

DI, II, and III

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Question: 4

Which of the following, if observed, would not indicate the need to extend the search for other indicators of fraud in a purchasing department?

AThe standard of living of one of the purchasing agents has increased.

BThe internal control structure has significant weaknesses.

CThe purchasing agents have convinced management to adopt a policy of paying vendors on a more timely basis in order to avoid incurring penalty charges.

DThe cost of goods procured seems to be excessive in comparison with previous years.

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Question: 5

Which of the following does not represent a difficulty in using red flags as fraud indicators?

AMany common red flags are also associated with situations where no fraud exists.

BSome red flags are difficult to quantify or to evaluate.

CRed flag information is only gathered in extraordinary circumstances.

DThe red flags literature is not well enough established to have a positive impact on auditing.

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IIA IIA-CIA-Part2 Quiz:15 Topic:4 Questions:71-75