IIA IIA-CIA-Part2 Quiz 16 Topic 7 Questions 76-80

Question: 1

Which of the following would provide the best audit evidence regarding the effectiveness of an applied research department?

ADevelop a cost-per-product analysis for products developed over the past five years.

BDevelop a report on revenue generated by or cost savings directly attributable to newly developed products.

CCompare research as a percentage of revenue between this company and all major competitors in the same industry.

DCompare the number of this year's new product developments to the number of new product developments for the past five years.

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Question: 2

A retail company uses a computer program that matches electronic vendor invoices with the applicable purchase orders and receiving information, which are also maintained electronically.

If an invoice does not match the other items within predefined ranges, a report is generated and sent to the accounts payable department for further investigation. All of the applicable documents are electronically marked, cross-referenced, and retained in open files. Both an integrated test facility and a systems control audit review file (SCARF) have been included in the system.

An auditor wants to determine the extent to which items are not matched at year end and to investigate the potential causes of the unmatched items. Which of the following audit procedures would be most effective in determining the items to investigate?

AUse generalized audit software to read the electronically marked unmatched items.

BUse generalized audit software to read the purchase orders and trace to applicable receiving and vendor invoice files.

CUse the SCARF to identify unusual items. Select an attributes sample and trace to the underlying documentation.

DSubmit test data to identify attributes of unmatched items. Follow up by investigating the identified attributes.

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Question: 3

Which of the following processes real-transaction data through auditor-developed test programs?

AGeneralized audit software.

BTracing.

CParallel simul-ation.

DMapping.

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Question: 4

After partially completing an internal control review of the accounts payable department, an auditor suspects that some type of fraud has occurred. To ascertain whether the fraud is present, the best sampling approach would be to usE.

ASimple random sampling to select a sample of vouchers processed by the department during the past year.

BProbability-proportional-to-size sampling to select a sample of vouchers processed by the department during the past year.

CDiscovery sampling to select a sample of vouchers processed by the department during the past year.

DJudgmental sampling to select a sample of vouchers processed by clerks who were identified by the department manager as acting suspiciously.

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Question: 5

Which of the following conditions is the strongest indicator of possible fraud?

AAn assistant treasurer who refuses to take vacations.

BIndependent reconciliations of subsidiary to general ledgers that are not always completed on a timely basis.

CA condition of excess manufacturing waste material.

DA manager who is often over budget at the end of a reporting period.

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IIA IIA-CIA-Part2 Quiz:16 Topic:7 Questions:76-80