[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 31-40

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QUESTION 31

If an engagement client’s operating standards are vague and thus subject to interpretation,the auditorshould:

 

A.

Seek agreement with the client as to the standards to be used to measure operating performance.

B.

Determine best practices in the area and use them as the standard.

C.

Interpret the standards in their strictest sense because standards are otherwise only minimum measures of acceptance.

D.

Omit any comments on standards and the client’s performance in relationship to those standards, because such an analysis would be meaningless.

 

Correct Answer: A

 

 

QUESTION 32

Which of the following would not be a factor for senior management to consider when determining the internal audit activity’s role in an organization’s risk management process?

 

A.

The extent to which the internal audit activity is outsourced.

B.

The maturity level of risk management practices in the organization.

C.

The competency of the internal auditors in risk management.

D.

The nature of the business and the environment in which the organization operates.

 

Correct Answer: A

 

 

QUESTION 33

An auditor for a large wholesaler is evaluating the controls over the approval and oversight of credit sales. Which of the following procedures would be a control weakness?

 

A.

The credit department is responsible for approving shipments to all customers.

B.

The finance committee of the board of directors periodically reviews credit standards.

C.

Customers who fail to meet credit requirements must pay cash for shipments upon delivery.

D.

The sales department is responsible for determining the credit ratings of customers.

 

Correct Answer: D

 

 

QUESTION 34

Which of the following would be the most useful in developing an annual audit plan?

 

A.

General purpose audit software.

B.

Voting software and hardware.

C.

Flowcharting and data capture software.

D.

Risk assessment software.

 

Correct Answer: D

 

 

QUESTION 35

Organizations that use a highly structured command-and-control management approach are at greater risk of:

 

A.

Delayed response due to the inability to reach consensus among decision makers.

B.

Negative consequences that result from lower-level staff’s unwillingness to confront errors by superiors.

C.

Erosion of staff morale due to perceptions of ineffective leadership.

D.

Waste and abuse of organizational resources resulting from management override of controls.

Correct Answer: B

 

 

QUESTION 36

Which of the following is not a benefit of using information technology in solving audit problems?

 

A.

It helps reduce audit risk.

B.

It improves the timeliness of the audit engagement.

C.

It increases audit opportunities.

D.

It improves the auditor’s judgment.

 

Correct Answer: D

 

 

QUESTION 37

The primary reason that a bank would maintain a separate compliance function is to:

 

A.

Better manage perceived high risks.

B.

Strengthen controls over the bank’s investments.

C.

Ensure the independence of line and senior management.

D.

Better respond to shareholder expectations.

 

Correct Answer: A

 

 

QUESTION 38

During a payroll audit of a large organization,an auditor noted that the assistant personnel director is responsible for many aspects of the computerized payroll system, including adding new employees in the system; entering direct-deposit information for employees; approving and entering all payroll changes; and providing training for system users. After discussions with the director of personnel,the auditor concluded that the director was not comfortable dealing with information technology issues and felt obliged to support all actions taken by the assistant director. The auditorshould:

 

A.

Continue to follow the engagement program because the engagement scope and objectives have already been discussed with management.

B.

Review the engagement program to ensure testing of direct deposits to employee bank accounts is adequately covered.

C.

Recommend to the chief audit executive that a fraud investigation be started.

D.

Test a sample of payroll changes to ensure that they were approved by the assistant director before being processed.

 

Correct Answer: B

 

 

QUESTION 39

Which of the following is not an appropriate role for internal auditors after a disaster occurs?

 

A.

Monitor the effectiveness of the recovery and control of operations.

B.

Correct deficiencies of the entity’s business continuity plan.

C.

Recommend future improvements to the entity’s business continuity plan.

D.

Assist in the identification of lessons learned from the disaster and the recovery operations.

 

Correct Answer: B

 

 

QUESTION 40

Overall audit efficiency is enhanced between the internal and external audit functions when:

 

A.

Internal audit coverage is reduced to avoid potential conflicts of interest.

B.

Audits of the same department are conducted at different times.

C.

The internal audit department reviews functions or departments prior to the external audit.

D.

External audit scope is reduced based on the internal audit department’s activities.

 

Correct Answer: D

 

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