IIA IIA-CIA-Part2 Quiz 57 Topic 9 Questions 281-285

Question: 1

A consumer electronics company is considering acquiring a small flash memory manufacturer. An internal auditor has been assigned to determine if the manufacturer's accounts payable contain all outstanding liabilities. Which audit procedure is not relevant for this objective?

AVerify the period of liability of subsequent cash disbursements using related supporting documentation.

BSend confirmations, including zero-balance accounts, to vendors with whom the manufacturer normally does business.

CTrace receiving reports issued before the period end to the accounts payable list and vendor invoices.

DVerify a sample of accounts payable by using related invoices, receiving reports, and purchase orders.

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Question: 2

An organization has recently incurred significant cost overruns on one of its construction projects. Management suspects that these overruns were caused by the contractor improperly charging for costs related to contract change orders. Which of the following procedures are appropriate for testing this suspicion?

1. Determine if the contractor has received proper approval of change orders from management.

2. Determine if the contractor has billed for original contract work cancelled by the change orders.

3. Determine if the contractor has charged change orders with costs already billed to the original contract.

4. Determine if the contractor has been paid for change orders that have not yet been completed.

A1 and 2 only

B1 and 3 only

C2 and 3 only

D3 and 4 only

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Question: 3

As part of a preliminary survey of the purchasing function, an internal auditor reads the department's policies and procedures manual and concludes that the manual describes the processing steps clearly and contains an appropriate internal control design. The next engagement objective is to evaluate the operating effectiveness of internal controls. Which procedure would fulfill this objective most effectively?

APerform a design test.

BPerform a compliance test.

CPerform a systems test.

DPerform an efficiency test.

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Question: 4

Given the scarcity of internal audit resources, a chief audit executive (CAE) decides not to schedule a follow-up of audit recommendations when developing engagement work schedules. Why does the CAE's decision violate the Standards?

AIt is not the CAE's responsibility to establish a process for a follow-up.

BLack of resources is not a sufficient reason to forgo a follow-up.

CFollow-up actions should take priority over new engagements in scheduling.

DWhen resources are scarce, the follow-up can be incorporated into the next engagement.

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Question: 5

Management has asked the internal audit activity to perform an operational audit of a division that recently reported an increase in expenditures in addition to a decrease in profits. However, existing internal audit resources are currently engaged in a legal compliance audit. Which factor would be considered least important in deciding whether resources should be removed from the legal compliance audit to the operational audit?

AThe increase in expenditures at the division over the past year.

BThe probability that the legal compliance audit will detect fraud.

CThe results of the external auditor's most recent financial audit.

DThe potential for regulatory fines associated with the legal compliance audit.

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IIA IIA-CIA-Part2 Quiz:57 Topic:9 Questions:281-285