[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 221-230

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QUESTION 221

An organization’s chief audit executive (CAE) has been asked to conduct an assurance engagement for an information technology system that was subject to a consulting engagement in the prior year. How should the CAE respond?

 

A.

Decline the engagement because independence and objectivity would be impaired.

B.

Delay the assurance engagement to ensure that there is a two-year period between the engagements.

C.

Accept the engagement and assign different auditors to conduct the assurance services.

D.

Facilitate a control self-assessment workshop instead of performing an assurance engagement.

 

Correct Answer: C

 

 

QUESTION 222

During a routine audit of a customer service hotline, an internal auditor noticed that an unusually high number of customer complaints pertained to payments not being applied to the customers’ accounts. Which of the following would most likely be the reason for the high volume of complaints?

 

A.

An ineffective customer service department.

B.

Poor controls in the invoice approval processes.

C.

Check tampering by an employee.

D.

Submission of fraudulent expense reports.

 

Correct Answer: C

 

 

QUESTION 223

Which of the following,if observed, would not indicate the need to extend the search for other indicators of fraud in a purchasing department?

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A.

The standard of living of one of the purchasing agents has increased.

B.

The internal control structure has significant weaknesses.

C.

The purchasing agents have convinced management to adopta policy of paying vendors on amore timely basis in order to avoid incurring penalty charges.

D.

The cost of goods procured seems to be excessive in comparison with previous years.

 

Correct Answer: C

QUESTION 224

According to the International Professional Practices Framework,a review team must express an opinion on which of the following when performing an external assessment of an internal audit activity?

 

I. Conformance with the Standards and IIA Code of Ethics.

 

II. Effectiveness of continuous improvement activities.

 

III. Feedback from internal audit customers and other stakeholder groups.

 

IV. Efficiency and effectiveness of the internal audit activity’s administration processes.

 

A.

I only

B.

III only

C.

I and II only

D.

II and IV only

 

Correct Answer: A

 

 

QUESTION 225

An internal auditor is using mean-per-unit sampling to estimate the value of health benefit claims for a period. The auditor’s desired precision is $20,000. If the achieved precision is $10,000, which of the following conditions is implied?

 

A.

The value of claims is overstated.

B.

The value of claims is understated.

C.

The standard deviation is smaller than expected.

D.

The standard deviation is larger than expected.

 

Correct Answer: C

 

 

QUESTION 226

The results of an internal control questionnaire revealed that all investment activity exceeding $10,000 must be approved by the assistant treasurer. A sample of these transactions with a five-percent acceptable error rate found that 98 of the 100 items tested included the assistant treasurer’s approval. Based on this data, the auditor should:

 

A.

Confirm all investment activity with the firm’s broker since errors in approval had occurred.

B.

Decide not to perform further testing of investment authorizations.

C.

Contact the corporate finance department to verify all of the investments held.

D.

Perform an analytical review of investment transactions in comparison with prior years to identify significant fluctuations.

 

Correct Answer: B

 

 

 

 

 

 

 

QUESTION 227

An internal auditor used a questionnaire during an interview to gather information about the nature of credit sales processing. The questionnaire did not cover some pertinent information offered by the person being interviewed, and the auditor did not document the potential problems for further investigation. The primary deficiency with the above process is that:

 

A.

The auditor failed to consider the importance of the information offered.

B.

A questionnaire was used in a situation where a structured interview should have been used.

C.

The use of a questionnaire precluded the auditor from documenting other information.

D.

The engagement program was incomplete.

 

< font face="Arial">Correct Answer: A

 

 

QUESTION 228

Which of the following factors is not likely to affect the level of inherent risk associated with an application system?

 

A.

The system is strategic.

B.

Controls over the system appear reliable.

C.

The system is not a critical operating system.

D.

The system uses complex technology.

 

Correct Answer: B

 

 

QUESTION 229

Company A has a formal comprehensive corporate code of ethics while company B does not. Which of the following statements regarding the existence of the code of ethics in company A can be logically inferred?

 

1. Company A exhibits a higher standard of ethical behavior than does company B.

 

2. Company A has established objective criteria by which an employee’s actions can be evaluated.

 

3. The absence of a formal corporate code of ethics in company B would prevent a successful audit of ethical behavior in that company.

 

A.

2 only

B.

3 only

C.

1 and 2 only

D.

2 and 3 only

 

Correct Answer: A

 

 

QUESTION 230

An internal auditor for a large bank is reviewing thecollectabilityof a loan that is secured by real property. The best evidence of the loan’s collectability would be:

 

A.

A recent independent appraisal of the value of the real property.

B.

A document showing the loan committee’s approval of the loan.

C.

The borrower’s confirmation of the loan balance.

D.

A properly completed and signed loan application form.

 

Correct Answer: A

 

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