[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 71-80

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QUESTION 71

Which of the following audit activities is within the scope of assurance activities as stated in the International Professional Practices Framework?

 

A.

Review a make-or-buy decision and report a recommendation to management for approval.

B.

Participate in negotiations for a corporate acquisition.

C.

Assess financing alternatives for a new generator.

D.

Perform an evaluation of management’s planning process.

 

Correct Answer: D

 

 

QUESTION 72

Which of the following measurements could an auditor use in an audit of the efficiency of a motor vehicle inspection facility?

 

A.

The total number of cars approved.

B.

The ratio of cars rejected to total cars inspected.

C.

The number of cars inspected per inspection agent.

D.

The average amount of fees collected per cashier.

 

Correct Answer: C

 

 

QUESTION 73

Which of the following risk assessment tools would best facilitate the matching of controls to risks?

 

A.

Control matrix.

B.

Internal control questionnaire.

C.

Control flowchart.

D.

Program evaluation and review technique (PERT) analysis.

 

Correct Answer: A

 

 

 

 

 

 

QUESTION 74

Which of the following procedures would provide the best evidence of the effectiveness of a credit-granting function?

 

A.

Observe the process.

B.

Review the trend in receivables write-offs.

C.

Ask the credit manager about the effectiveness of the function.

D.

Check for evidence of credit approval on a sample of customer orders.

 

Correct Answer: B

 

 

QUESTION 75

Regarding an organization’s decision to retain an external audit firm,the chief audit executive (CAE) should:

 

A.

Work with the organization’s chief financial officer to evaluate the external auditor’s performance and together make the decision.

B.

Not be involved in this decision process as it would compromise the CAE’s objectivity.

C.

Evaluate the external auditor’s performance and retain the external auditor if quality and cost criteria are met.

D.

Assist the audit committee by facilitating the development of an appropriate evaluation process.

 

Correct Answer: D

 

 

QUESTION 76

In an assurance engagement of treasury operations, an internal auditor is required to consider all of the following issues except:

 

A.

The audit committee has requested assurance on the treasury department’s compliance with a new policy on the use of financial instruments.

B.

Treasury management has not instituted any risk management policies.

C.

Due to the recent sale of a division,the amount of cash and marketable securities managed by the treasury department has increased by 350 percent.

D.

The external auditors have indicated some difficulties in obtaining account confirmations.

 

Correct Answer: D

 

 

QUESTION 77

Which of the following describes a control weakness?

 

A.

Purchasing procedures are well designed and are followed unless otherwise directed by the purchasing supervisor.

B.

Pre-numbered blank purchase orders are secured within the purchasing department.

C.

Normal operational purchases fall in the range from $500 to $1,000 with two signatures required for purchases over $1,000.

D.

The purchasing agent invests in a publicly traded mutual fund that lists the stock of one of the company’s suppliers in its portfolio.

 

Correct Answer: A

 

QUESTION 78

According to the International Professional Practices Framework,which of the following is the appropriate division of responsibilities for the coordination of internal and external audit efforts?

 

I. Oversight of Work

 

Coordination of Activities

 

Chief audit executive

 

Senior management

 

II. Board

 

Chief audit executive

 

III. Chief financial officer

 

Chief audit executive

 

IV. Board

 

Chief financial officer

 

A.

I

B.

II.

C
.

III.

D.

IV.

 

Correct Answer: B

 

 

QUESTION 79

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

 

A.

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

B.

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

C.

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

D.

Accepting a gift that is a commercial advertisement available to the public.

 

Correct Answer: C

 

 

QUESTION 80

In order to provide the most useful information for an organization’s risk management decisions,which of the following should be assessed?

 

A.

Risk levels for future events based on the degree of uncertainty of those events and their cost of mitigation.

B.

Inherent and control risks and their impact on the extent of financial misstatements.

C.

Risk levels of current and future events,their effect on the achievement of the organization’s objectives,and their underlying causes.

D.

Risk levels of current and future events,their impact on the organization’s mission,and the potential for the elimination of existing risk factors.

 

Correct Answer: C

 

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