[Free] Download New Updated (October 2016) IIA IIA-CIA-Part2 Real Exam 281-290

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QUESTION 281

Management has asked the internal audit activity to perform an operational audit of a division that recently reported an increase in expenditures in addition to a decrease in profits. However, existing internal audit resources are currently engaged in a legal compliance audit. Which factor would be considered least important in deciding whether resources should be removed from the legal compliance audit to the operational audit?

 

A.

The increase in expenditures at the division over the past year.

B.

The probability that the legal compliance audit will detect fraud.

C.

The results of the external auditor’s most recent financial audit.

D.

The potential for regulatory fines associated with the legal compliance audit.

 

Correct Answer: C

 

 

QUESTION 282

As part of a preliminary survey of the purchasing function, an internal auditor reads the department’s policies and procedures manual and concludes that the manual describes the processing steps clearly and contains an appropriate internal control design. The next engagement objective is to evaluate the operating effectiveness of internal controls. Which procedure would fulfill this objective most effectively?

 

A.

Perform a design test.

B.

Perform a compliance test.

C.

Perform a systems test.

D.

Perform an efficiency test.

 

Correct Answer: B

 

 

QUESTION 283

A code of business conduct provides:

 

A.

A fraud avoidance plan that does not explicitly describe punishments for violations.

B.

A passive method of fraud deterrence.

C.

A program to anonymously report irregularities to authorities.

D.

An alternative to “tone at the top” programs.

 

Correct Answer: B

 

 

QUESTION 284

During an audit, an employee, who does not want to be identified, offers to provide information that would be damaging to the organization and may concern illegal activities. Which of the following actions by the auditor would not be consistent with the IIA Code of Ethics and Standards?

 

A.

Promising to maintain the employee’s anonymity and listening to the information.

B.

Suggesting that the employee consider talking to legal counsel.

C.

Informing the employee that an attempt will be made to keep the source of the information confidential while looking into the matter further.

D.

Informing the employee of other methods of communicating this type of information.

 

Correct Answer: A

 

 

QUESTION 285

An organization’s policies allow buyers to authorize expenditures up to $50,000 without any other approval. Which of the following audit procedures would be most effective in determining if fraud in the form of payments to fictitious companies has occurred?

 

A.

Use generalized audit software to list all purchases over $50,000 to determine whether they were properly approved.

B.

Develop a snapshot technique to trace all transactions by suspected buyers.

C.

Use generalized audit software to take a random sample of all expenditures under $50,000 to determine whether they were properly approved.

D.

Use generalized audit software to select a sample of paid invoices to new vendors and examine evidence that shows that services or goods were received.

 

Correct Answer: D

 

 

 

 

 

 

 

 

QUESTION 286

An internal auditor compared the number of human resources professionals per employee with industry standards. This comparison would assist the auditor in evaluating which of the following areas?

 

A.

Sufficiency of controls over payroll rate increases.

B.

Current level of performance of the human resources department.

C.

Adequacy of controls over hiring new employees.

D.

Degree of compliance with human resources policies.

 

Correct Answer: B

 

 

QUESTION 287

Which of the following is the correct ratio to use in calculating the dollar value of the population if the auditor is using ratio estimation?

 

Number of Items

 

Audited Value

 

Carrying Amount

 

Sample

 

300

 

$500,000

 

$480,000

 

Population

 

3,000

 

$5,000,000

 

A.

0.10

B.

0.96

C.

1.04

D.

10.00

 

Correct Answer: C

 

 

QUESTION 288

Which of the following is most appropriate when conducting an interview during the course of a fraud investigation?

 

A.

Schedule the interview well in advance.

B.

Explain the detailed purpose to the interviewee.

C.

Assume that the interviewee is guilty.

D.

Have a witness present during the interview.

 

Correct Answer: D

 

 

QUESTION 289

When performing a compliance audit of the organization’s outsourced services, which of the following is considered the primary engagement objective?

 

A.

Verifying that the organization does not have the appropriate knowledge and resources in-house.

B.

Ensuring the provider has adequate internal controls in order to protect the quality of their service.

C.

Evaluating the efficiency, effectiveness, economy, and sufficiency of the services provided.

D.

Assessing the provider’s adherence to contract and regulatory requirements.

 

Correct Answer: D

 

 

QUESTION 290

According to the Standards, which of the following objectives is not required to ensure the appropriate completion of an engagement?

 

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A.

Determining audit team members are coordinated to ensure the efficient execution of all engagement procedures.

B.

Confirming engagement working papers properly support the observations, recommendations and conclusions.

C.

Providing structured learning opportunities for engagement auditors when and wherever possible.

D.

Ensuring all engagement objectives are reviewed for satisfactory achievement and properly documented.

 

Correct Answer: C

 

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