IIA IIA-CIA-Part2 Quiz 1 Topic 8 Questions 1-5

Question: 1

When assessing the risk associated with an activity, an internal auditor should:

ADetermine how the risk should best be managed.

BProvide assurance on the management of the risk.

CModify the risk management process based on risk exposures.

DDesign controls to mitigate the identified risks.

Show Answer

Question: 2

Which of the following would be a red flag that indicates the possibility of inventory fraud?

1. The controller has assumed responsibility for approving all payments to certain vendors.

2. The controller has continuously delayed installation of a new accounts payable system, despite a corporate directive to implement it.

3. Sales commissions are not consistent with the organization's increased levels of sales.

4. Payments to certain vendors are supported by copies of receiving memos, rather than originals.

AI and II only

BII and III only

CI, II, and IV only

DI, III, and IV only

Show Answer

Question: 3

An internal auditor observes a double payment transaction on a supplier invoice during an accounts payable engagement Which of the following steps would be the most effective in helping the auditor determine whether fraud exists?

ASwitch the existing assurance engagement into a fraud investigation engagement

BExtend the audit scope and perform additional testing of controls on other related areas

CReview the poor year's transaction volume and amounts paid compared to the poor year's budget

DPerform data analytics on the supplier's information, invoiced amounts, and payments performed

Show Answer

Question: 4

The internal auditors available to perform the engagement do not have sufficient skills related to the area under review Which of the following rs an appropriate action for the chief audit executive to take?

AContinue the engagement with the available staff, providing more hands-on supervision than usual

BLimit the objectives and scope of the engagement to align them with the skills available among the current staff.

CCosource the performance of the engagement using personnel in the area that will be reviewed to supplement the knowledge of the staff and complete the engagement

DSupplement the internal auditors assigned to the engagement by bringing onto the engagement team a consultant who is independent of the area under review and has the missing expertise

Show Answer

Question: 5

As part of the preliminary survey, an internal auditor sent an internal control questionnaire to the accounts payable function Based on the questionnaire responses, the auditor determines that there is no established procedure for adding and approving new vendors What would the auditor do next?

ADetermine that this situation is acceptable and focus on more significant issues

BDocument the issue m the draft audit report

CDocument the observation for further follow up when testing the operating effectiveness of controls

DInterview the personnel associated with this observation.

Show Answer

IIA IIA-CIA-Part2 Quiz:1 Topic:8 Questions:1-5