IIA IIA-CIA-Part2 Quiz 161 Topic 5 Questions 801-805

Question: 1

Analytical procedures enable the internal auditor to predict the balance or quantity of an item. Information to develop this estimate can be obtained by all of the following except

ATracing transactions through the system to determine whether procedures are being applied as prescribed.

BComparing financial data with data for comparable prior periods, anticipated results (e.g., budgets and forecasts), and similar data for the industry in which the entity operates.

CStudying the relationships of elements of financial data that would be expected to conform to a predictable pattern based upon the entity's experience.

DStudying the relationships of financial data with relevant nonfinancial data.

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Question: 2

A production manager for a moderate-sized manufacturing organization began ordering excessive raw materials and had them delivered to a wholesaler that the manager was running as a side business. The manager falsified receiving documents and approved the invoices for payment. Which of the following engagement procedures is most likely to detect this fraud?

ATake a sample of cash disbursements: compare purchase orders, receiving reports, invoices, and check copies.

BTake a sample of cash disbursements and confirm the amount purchased, purchase price, and date of shipment with the vendors.

CObserve the receiving dock and count materials received; compare the counts with receiving reports completed by receiving personnel.

DPerform analytical tests, comparing production, materials purchased, and raw materials inventory levels; investigate differences.

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Question: 3

Analytical procedures can best be categorized as

ASubstantive tests.

BTests of controls.

CQualitative tests.

DBudget comparisons.

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Question: 4

Analytical procedures in which current financial statements are compared with budgets or previous statements are primarily intended to determine the

AAdequacy of financial statement disclosure.

BExistence of specific errors or omissions.

COverall reasonableness of statement contents.

DUse of an erroneous cutoff date.

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Question: 5

An internal auditor's preliminary analysis of accounts receivable turnover revealed the following rates:

Year 1 Year 2 Year 3

7.3 6.2 4.3

Which of the following is the most likely cause of the decrease in accounts receivable turnover?

AIncrease in the cash discount offered.

BLiberalization of credit policy.

CShortening of due date terms.

DIncreased cash sales.

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IIA IIA-CIA-Part2 Quiz:161 Topic:5 Questions:801-805