IIA IIA-CIA-Part2 Quiz 45 Topic 6 Questions 221-225

Question: 1

Which of the following would have the least impact (either positive or negative) on an assessment of a department's control environment?

AThe department managed long-term investments, including investment in derivatives and other financial instruments, to maximize return.

BThe department manager sets a tone of honesty and integrity in all business dealings and this tone is emulated by department personnel.

CMany department functions were duplicated or verified by other department employees as part of the department's normal procedures.

DAudit tests designed to verify compliance with control procedures detected a general failure to follow standard procedures for transaction authorization.

Show Answer

Question: 2

A bank uses a risk analysis matrix to quantify the relative risk of auditable entities. The analysis involves rating auditable entities on risk factors using a scale of 1 to 10, with 10 representing the greatest risk. A partial list of risk factors and the ratings given to three of the bank's departments is provided below:

q2_IIA-CIA-Part2

Which of the following statements regarding risk in the department is true?

AAs compared to departments A and C, department B has a stronger control system to compensate for the greater complexity of the department's transactions and dollar value of its assets.

BThe internal audit activity should schedule audits of department B more often than audits of department C because of the relative control strength of department C as compared to department B.

CThe nature of department A's control structure may be justified by the nature of the department's assets and the complexity of its transactions.

DThe relative ranking of the departments in order of their risk, from greatest to least risk, is: A; C; B.

Show Answer

Question: 3

During an audit, an employee, who does not want to be identified, offers to provide information that would be damaging to the organization and may concern illegal activities. Which of the following actions by the auditor would not be consistent with the IIA Code of Ethics and Standards?

APromising to maintain the employee's anonymity and listening to the information.

BSuggesting that the employee consider talking to legal counsel.

CInforming the employee that an attempt will be made to keep the source of the information confidential while looking into the matter further.

DInforming the employee of other methods of communicating this type of information.

Show Answer

Question: 4

In reviewing the appropriateness of the minimum quantity level of inventory established by a department, an auditor would be least likely to consider:

AStockout costs, including lost customers.

BSeasonal variations in forecasting inventory demand.

COptimal order sizes determined by an economic order quantity model.

DThe potential for obsolescence of inventory items.

Show Answer

Question: 5

Which of the following data sources would provide the least valid data for an audit of a retail store's customer service?

AA graph that compares staffing levels for selected times with store traffic (number of customers) over the same time period.

BA random survey of customer satisfaction given to customers as they leave the store.

CInterviews of randomly selected service personnel regarding the quality of service that they provide.

DA graph of customer service training across stores, comparing training with overall levels of service satisfaction.

Show Answer

IIA IIA-CIA-Part2 Quiz:45 Topic:6 Questions:221-225