IIA IIA-CIA-Part2 Quiz 192 Topic 4 Questions 956-960

Question: 1

An internal auditor has completed an engagement to review an organization's activities and is ready to issue a final engagement communication. However, the engagement client disagrees with the internal auditor's conclusions. The internal auditor should

AWithhold the issuance of the final engagement communication until agreement on the issues is obtained.

BPerform more work, with the engagement client's concurrence, to resolve areas of disagreement. Delay the issuance of the final engagement communication until agreement is reached.

CIssue the final engagement communication and indicate that the engagement client has provided a scope limitation that has led to a difference as to the conclusions.

DIssue the final engagement communication and state both the internal auditor and engagement client positions and the reasons for the disagreement.

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Question: 2

Final engagement communications should, at a minimum, contain the purpose, scope, and results of the engagement. Engagement observations and recommendations should be based on four attributes: criteria, condition, cause, and effect. The cause can best be described as

AFactual evidence that the internal auditor found.

BReason for the difference between the expected and actual conditions.

CThe risk or exposure because of the condition found.

DResultant evaluations of the effects of the observations and recommendations.

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Question: 3

An engagement observation is worded as follows: The capital budget includes funds to purchase 11 new vehicles. Review of usage records showed that 10 vehicles in the fleet of 70 had been driven less than 2,500 miles during the past year. Vehicles have been assigned to different groups whose usage rates have varied greatly. There was no policy requiring rotation of vehicles between high and low usages groups. Lack of criteria for assigning vehicles and a system for monitoring their usage could lead to purchasing unneeded vehicles.Based on the facts presented, it is appropriate to recommend that management

AEstablish a minimum of 2,500 miles per quarter as a criterion for assigning vehicles to user groups.

BEstablish a system to rotate vehicles among users periodically.

CDelay the proposed vehicle purchases until the apparent excess capacity is adequately explained or absorbed.

DWithhold approval of the capital budget until other projects can be reviewed by internal auditing.

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Question: 4

Engagement observations and recommendations emerge by a process of comparing what should be with what is. In determining "what should be" during an engagement to review an organization's treasury function, which of the following is the (east desirable criterion against which to judge current operations?

AThe operations of the treasury function as documented during the last engagement.

BOrganizational policies and procedures delegating authority and assigning responsibilities.

CFinance textbook illustrations of generally accepted good treasury function practices.

DCodification of best practices of the treasury function in relevant industries.

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Question: 5

An engagement communication relating to an engagement performed at a bank categorizes observations as "deficiencies" for major problems and "other areas for improvement" for less serious problems. Which of the following excerpts is properly included under "other areas for improvement"?

AMany secured loans did not contain hazard insurance coverage for tangible property collateral.

BLoan officers also prepare the cashier's checks for disbursement of the loan proceeds.

CThe bank is incurring unnecessary postage cost by not combining certain special mailings to checking account customers with the monthly mailing of their statements.

DAt one branch a large amount of cash was placed on a portable table behind the teller lines.

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IIA IIA-CIA-Part2 Quiz:192 Topic:4 Questions:956-960