IIA IIA-CIA-Part2 Quiz 215 Topic 7 Questions 1071-1075

Question: 1

During the initial audit of a new billing system for a large telephone company, the internal auditors considered downloading several days' worth of transactions to a file for analysis using generalized audit software. The major deficiency of this approach is that

AThere may not be enough data to detect problems that occur infrequently.

BAudit software is not designed to work effectively on this much data.

CThe required audit techniques would be unfamiliar to the auditors.

DPerforming the selection of transactions may interrupt processing too severely.

Show Answer

Question: 2

During an audit of capital assets, an auditor tested the accuracy of recorded depreciation. The best evidence that an asset is still in service would result from a

AReview of fixed assets records for the asset.

BComparison of the asset's depreciation schedule with its maintenance records.

CComparison of the asset's depreciation schedule with its insurance appraisal.

DReview of depreciation policies and procedures for capital assets.

Show Answer

Question: 3

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: 4

A film company determined that income level impacts the number of films that people watch per month, as shown by the graph below

AThe graph indicates that

BA richer person always sees more films than a poorer person.

CThe number of films seen per month is a linear function of income level.

DA 20 percent pay increase is more likely to increase film viewing at lower income levels than at higher income levels.

EA 20 percent pay increase is likely to increase film viewing by a constant amount regardless of income level.

Show Answer

Question: 5

As a result of a recent discovery of false information on employment applications, an internal auditor has reviewed hiring procedures. Which of the following represents a weakness in the control system?

i. Applicants are not required to have their signed applications legally authenticated.

ii. Applicants' educational information is not validated with the educational institution before employment is offered.

iii. Information related to applicants' long term work history is not validated before employment is offered.

AIII only.

BI and II only.

CII and III only.

DI, II, and III.

Show Answer

IIA IIA-CIA-Part2 Quiz:215 Topic:7 Questions:1071-1075