[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 301-310

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QUESTION 301

Which of the following statements is not true about red flags?

 

A.

It can be challenging to quantify red flags.

B.

There is a scarcity of established literature on red flags.

C.

Red flags can point auditors to intentional wrongdoing, errors and omissions, inefficiency, and conflicts of interest.

D.

Red flags do not necessarily mean that fraud exists.

 

Correct Answer: B

 

 

QUESTION 302

A fast-food company is developing a computer simu-lation involving arrival time at a drive-through restaurant. The distribution for arrival times is:

 

Time

 

Single-Digit Random

 

Between Arrivals

 

Probability

 

Number Assigned

2 minutes

 

0.1

 

3 minutes

 

0.2

 

1,2

 

4 minutes

 

0.3

 

3,4,5

 

5 minutes

 

0.4

 

6,7,8,9

 

Six random numbers are selected to represent the arrival of six cars: 1,6,9,0,5,6.

 

What is the mean time between arrivals in this run of the simu-lation model?

 

A.

2 minutes.

B.

3 minutes.

C.

4 minutes.

D.

5 minutes.

 

Correct Answer: C

 

 

QUESTION 303

Which of the following procedures would be most effective in detecting fraud in electronically-submitted claims to insurance companies?

 

A.

Creating a monitoring program that detects unusual claims to be investigated by the claims department.

B.

Using generalized audit software to match the claimant identification number with a master list of valid policyholders.

C.

Testing the accuracy of processing by using integrated test facilities.

D.

Creating batch controls over all claims arriving from a particular organization and process those claims separately.

 

Correct Answer: A

 

 

QUESTION 304

With regard to external assessments of an internal audit activity (IAA), which of the following is the chief audit executive required to discuss with the board?

 

A.

External reviewer conflicts of interest, and the need for an external assessment more frequently than once every five years.

B.

External reviewer conflicts of interest, and the timeline of the external assessment.

C.

The need for an external assessment more frequently than once every five years, and the simplest method for the external reviewer to join the IAA’s organization.

D.

The simplest way for the external reviewer to join the IAA’s organization, and the timeline of the external assessment.

 

Correct Answer: A

 

 

QUESTION 305

Which of the following actions would be a violation of the IIA Code of Ethics?

 

A.

Excluding an issue in the final audit report after management has resolved the issue.

B.

Reporting information that could be damaging to the organization, at the request of a court of law.

C.

Failing to return a free promotional pen to a vendor related to the audit activity.

D.

Declining an audit engagement for which the auditor does not have the necessary experience or training.

 

Correct Answer: A

 

 

QUESTION 306

A manufacturing organization’s multi-step sales and shipping process starts when the organization’s headquarters receives the sales order. Headquarters then shares that data with theindividual manufacturing facility that compiles the shipment. Finally, the individual manufacturing facility sends the shipments to the customer. Which method should the internal auditor use to document this process in a flowchart?

 

A.

Trace the entire process, from the receipt of the sales order at headquarters to when the goods are shipped to the customer.

B.

Request a copy of each individual manufacturing facility’s flowcharts, speak with facility managers to confirm that they have been updated and then use the information in a flowchart.

C.

Trace the entire process in reverse, beginning with the shipped goods and ending with the receipt of the sales order at headquarters.

D.

Obtain information on how management sets sales prices, find documentation about how the organization approves the change of sales prices, and prepare an overview flowchart that links the sales price details.

 

Correct Answer: A

 

 

QUESTION 307

The internal audit staff lacks the expertise to perform a specific activity when auditing an organization. Which of the following individuals is not an appropriate choice to perform this task?

 

A.

A consultant from an outside firm.

B.

An expert within the department being audited.

C.

A researcher affiliated with a college or university.

D.

A specialist from the staff of a government agency.

 

Correct Answer: B

 

QUESTION 308

During the planning phase of an audit,an internal auditor preliminarily concluded that the controls for a process were adequately designed to manage the associated risk. Under what conditions might this preliminary assessment subsequently prove to be unreliable?

 

A.

Compensating controls from other processes were not present.

B.

Redundant controls are not in place to enhance well designed controls.

C.

Entity level controls are informal and not consistently enforced.

D.

Process controls were not developed from an existing key control checklist.

 

Correct Answer: C

 

 

QUESTION 309

An employee is more likely to commit fraud if which of the following red flags are present?

 

1. The employee believes that he is being underpaid and deserves a higher salary.

 

2. The employee is close to retirement and has expressed a desire to take an expensive trip around the world.

 

3. The employee has personal financial problems and seems very unhappy.

 

4. The employee is spending much more time at the office than usual and has been asking about opportunities for professional advancement.

 

A.

1 and 2 only

B.

1 and 3 only

C.

3 and 4 only

D.

2 and 4 only

 

Correct Answer: B

 

 

QUESTION 310

A manufacturer uses improved linkage between order entry, production, and shipping to reduce raw materials and work-in-process inventory. Which type of fraud will these changes likely reduce?

 

A.

Payment of fraudulent invoices.

B.

Purchases from a related party.

C.

Theft of resources from inventory.

D.

False reporting of hours worked.

 

Correct Answer: C

 

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