IIA IIA-CIA-Part1 Quiz 65 Topic 4 Questions 321-325

Question: 1

Which of the following represents the most useful function of inventory turnover analysis?

AIdentifying excess inventory, including obsolete inventory.

BDetermining the best supplier of raw materials based on cost comparison.

CCreating new staffing positions for inventory support.

DDeveloping more efficient methods for manufacturing finished products.

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Question: 2

Which of the following situations would most likely result in the auditor in charge (AIC) recommending that the staff auditor further investigate non-compliant items?

AA staff auditor conducted a test of 25 non-statistical sample items, selected judgmentally, and 5 are not in compliance with organizational policy.

BA staff auditor conducted a test of 85 non-statistical sample items, selected randomly, and 5 are not in compliance with organizational policy.

CBefore the staff auditor conducted a test of statistical sample items, the AIC was already aware of underlying control weaknesses.

DA staff auditor conducted a test of statistical sample items, the results of which fall below the acceptable error rate by less than one percentage point.

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Question: 3

A chief audit executive (CAE) is planning to issue an annual report concluding on the overall effectiveness of the organization's internal control system. According to the Standards, which of the following is likely the most significant challenge facing the CAE when creating the report?

AThe opinion must include difficult to measure risks such as the risks of management override of controls, and collusion among dishonest personnel.

BThe opinion is dependent on complex analyses of numerous internal audit engagements carried out over the prior year.

CThe opinion is only issued once a year, limiting its usefulness.

DAssessing control effectiveness is complicated by inherent risks.

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Question: 4

Which of the following best describes an appropriate form of working paper standardization?

AUniform cross referencing system.

BCustomized layouts for each specific audit area.

CComprehensive data lists from information databases.

DAudit client review and approval.

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Question: 5

An internal auditor is assessing the risk of employees falsifying reimbursement requests for business-related meals or travel. Which of the following procedures would the internal auditor most likely perform first?

AReview the supplemental documentation provided for a sample of reimbursement requests.

BInterview the payroll/accounting supervisor to determine what controls exist to prevent fraud.

CDetermine whether or not the payroll/accounting department has been subject to regular review.

DEstablish a flowchart of the payroll/accounting functions that include any controls currently in place.

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IIA IIA-CIA-Part1 Quiz:65 Topic:4 Questions:321-325