[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 291-300

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QUESTION 291

Which of the following is least likely to enhance the independence of an internal audit activity?

 

A.

The existence of a formal written charter for the internal audit activity.

B.

Submission of an annual internal audit work plan to the audit committee.

C.

A direct reporting relationship to the audit committee.

D.

Adherence to the organization’s position classification structure.

 

Correct Answer: D

 

 

QUESTION 292

During an audit engagement in an insurance company, an internal auditor discovered that senior management had purposely misclassified $200,000 in assets on financial statements submitted to regulatory authorities in order to avoid significant statutory penalties. To remain in compliance with the IIA Code of Ethics, what would be the most appropriate action for the auditor to take?

 

A.

Note the situation in the workpapers and inform the chief executive officer.

B.

Send an informative memo to the external auditors.

C.

Discuss the matter with audit management and ensure that the audit committee is informed.

D.

Report the matter to regulatory authorities since senior management is implicated.

 

Correct Answer: C

 

 

QUESTION 293

An internal auditor is checking the accuracy of a computer-printed inventory listing to determine whether the total dollar value of inventory is significant
ly overstated. Because there is no time or resources to check all items in the warehouse, a sample of inventory items must be used. If the sample size is fixed, which of the following would be the most accurate sampling approach?

 

A.

Select those items that are most easily inspected.

B.

Employ simple random sampling.

C.

Sample so that the probability of a given inventory item being selected is proportional to the number of units sold for that item.

D.

Sample so that the probability of a given inventory item being selected is proportional to its book value.

 

Correct Answer: D

 

 

QUESTION 294

An internal auditor pays to participate in the company’s annual golf tournament, which is held outside of normal business hours.

 

The auditor wins the putting contest and is awarded an all-expense-paid weekend vacation.

 

According to the IIA Code of Ethics regarding objectivity, the auditor’s best course of action would be to:

 

A.

Refuse the prize because the amount is significant.

B.

Accept the prize because the event was held outside of normal business hours.

C.

Refuse the prize because it represents an impairment to objectivity.

D.

Accept the prize because the auditor received no special treatment.

 

Correct Answer: D

 

 

QUESTION 295

Which of the following internal control weaknesses would an internal auditor most likely detect while reviewing a flowchart that depicts the purchasing function of an organization?

 

A.

Purchasing policies have not been updated.

B.

The organization is not taking advantage of quantity discounts available from its suppliers.

C.

Payments for goods received have not been authorized at the appropriate level.

D.

Payments to suppliers are made before goods are received.

 

Correct Answer: D

 

 

QUESTION 296

Some of an organization’s payroll transactions were batch posted to the payroll file but were not uploaded correctly to the general ledger file on the mainframe. The best control to detect this type of error would be:

 

A.

Edit controls on the payroll file.

B.

Appropriate segregation of duties for batch approval.

C.

Validation of hash totals.

D.

Reconciliation of paychecks to the bank account.

 

Correct Answer: C

 

 

QUESTION 297

Which of the following,other than the internal audit charter, is most likely to define the purpose, authority, and responsibility of the internal audit activity (IAA)?

 

A.

The chief audit executive job description.

B.

The internal audit policy statement.

C.

The organization’s charter to conduct operations.

D.

The IAA vision statement.

 

Correct Answer: B

 

 

QUESTION 298

What conclusion can be reached by comparing a random sample of vendor invoices to purchase orders?

 

A.

No duplicate invoices were received.

B.

No duplicate payments were made.

C.

Invoices were for authorized purchases.

D.

Authorized invoices were paid.

 

Correct Answer: C

 

QUESTION 299

Which of the following items of evidence is most valid to support a finding that a public utility’s repair crews are sometimes required to work under unsafe conditions?

 

A.

Videotapes of repair crews working in a situation that is unsafe.

B.

Audio taped testimonials from repair crew members who were required to work under unsafe conditions.

C.

Reports showing increases in the number of days of sick leave for individuals on repair crews.

D.

Written and signed descriptions from repair crew members of the unsafe conditions that they have had to endure.

 

Correct Answer: A

 

 

QUESTION 300

Which of the following statements is not true?

 

It is inappropriate for internal auditors to provide consulting services relating to operations for which they had previous responsibilities.

A.

The nature of consulting services that are performed by the internal audit activity should be defined in the audit charter.

B.

C.

A party outside the internal audit activity should oversee assurance engagements for functions over which the chief audit executive has responsibility.

D.

The chief audit executive should decline a consulting engagement if the internal audit staff lacks the knowledge, skills, or other competencies needed to perform all or a part of the engagement.

 

Correct Answer: B

 

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