[Free] Download New Updated (October 2016) IIA IIA-CIA-Part2 Real Exam 61-70

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QUESTION 61

Which of the following situations would best support the decision of a chief audit executive (CAE) to defer follow-up activity at a branch office until the next audit engagement?

 

A.

An audit of the branch office is routinely scheduled every three years.

B.

On-site follow-up of a remote branch may not be feasible due to travel costs.

C.

Branch office management states that correction of the audit issue may take longer than expected.

D.

The CAE and management agree that the corrective action taken to date is sufficient.

 

Correct Answer: D

 

 

QUESTION 62

If an auditor is sampling to test compliance with a particular company policy, which of the following factors should not affect the allowable level of sampling risk?

 

A.

The experience and knowledge of the auditor.

B.

The adverse consequences of noncompliance.

C.

The acceptable level of risk of making an incorrect audit conclusion.

D.

The cost of performing auditing procedures on sample selections.

 

Correct Answer: A

 

 

QUESTION 63

When assessing the risk associated with an activity, an internal auditor should:

 

A.

Determine how the risk should best be managed.

B.

Provide assurance on the management of the risk.

C.

Modify the risk management process based on risk exposures.

D.

Design controls to mitigate the identified risks.

 

Correct Answer: B

 

 

QUESTION 64

An internal audit activity implemented an integrated test facility to test payroll processing. The auditors identified the key controls and processing steps built into the computer program and developed test data to test them. The auditors submitted test transactions throughout the year and did not find any differences in their test results. The auditors can conclude that:

 

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A.

The system is properly capturing the hours worked by employees during the year and the hours have been properly submitted to payroll and processed correctly.

B.

All employees were correctly paid during the year and their pay was correctly computed.

C.

The computer application and its control procedures were processing payroll transactions correctly during the past year.

D.

All of the above.

 

Correct Answer: C

 

 

QUESTION 65

During a routine audit of a customer service hotline, an internal auditor noticed that an unusually high number of customer complaints pertained to payments not being applied to the customers’ accounts. Which of the following would most likely be the reason for the high volume of complaints?

 

A.

An ineffective customer service department.

B.

Poor controls in the invoice approval processes.

C.

Check tampering by an employee.

D.

Submission of fraudulent expense reports.

 

Correct Answer: C

 

 

QUESTION 66

If an organization’s chief audit executive wants to implement continuous auditing, what is the appropriate order in which key steps should be undertaken?

 

I. Identify business applications that require access.

 

II. Implement steps to continuously assess risks and controls.

 

III. Define objectives of continuous auditing.

 

IV. Manage and report results.

 

A.

III, I, IV, II.

B.

II, I, III, IV.

C.

III, I, II, IV.

D.

II, III, I, IV.

 

Correct Answer: C

 

 

QUESTION 67

An internal auditor provided the following statement about division A’s performance during the month: “Because supplies of raw material X were scarce, division A’s profits declined by 15 percent.” Which of the following can be validly concluded from the auditor’s statement?

 

I.Division A’s production level declined by 15 percent.

 

II. Division A could have sold more products than it produced.

 

III. Division A usually sells all of the products that it produces.

 

A.

I only

B.

II only

C.

III only

D.

I and II only

 

Correct Answer: B

 

 

QUESTION 68

An audit department has received anonymous information that an employee has allegedly been able to steal and cash checks sent to the organization by customers. What is the most efficient way for an auditor to determine how this type of fraud could occur and who might be the perpetrator?

 

A.

Confirm accounts receivable.

B.

Confirm accounts payable.

C.

Review the endorsements and banks of deposit on customers’ canceled checks.

D.

Flowchart and analyze key controls in the cash receipts process.

 

Correct Answer: D

 

 

QUESTION 69

Which of the following is true of engagement recommendations?

 

I. Specific suggestions for implementation must be included.

 

II. The internal auditor’s observations and conclusions may serve as the basis.

 

III. Actions to correct existing conditions or improve operations may be included.

 

IV. Approaches to correcting or enhancing performance may be suggested.

 

A.

I only

B.

III only

C.

I, III, and IV only

D.

II, III, and IV only

 

Correct Answer: D

 

 

QUESTION 70

Which of the following audit procedures is most suitable for verifying that all sales transactions have been recorded?

 

A.

Observation.

B.

Tracing.

C.

Re-computation.

D.

Vouching.

 

Correct Answer: B

 

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