[Free] Download New Updated (October 2016) IIA IIA-CIA-Part2 Real Exam 91-100

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QUESTION 91

Which of the following would be a red flag that indicates the possibility of inventory fraud?

 

I. The controller has assumed responsibility for approving all payments to certain vendors.

 

II. The controller has continuously delayed installation of a new accounts payable system, despite a corporate directive to implement it.

 

III. Sales commissions are not consistent with the organization’s increased levels of sales.

 

IV. Payments to certain vendors are supported by copies of receiving memos, rather than originals.

 

A.

I and II only

B.

II and III only

C.

I, II, and IV only

D.

I, III, and IV only

 

Correct Answer: C

 

 

QUESTION 92

Productivity statistics are provided quarterly to a company’s board of directors. An auditor checked the ratios and other statistics in the four most recent reports. The auditor used scratch paper and copies of the board reports to verify the accuracy of computations and compared the data used in the computations with supporting documents. The auditor wrote a note describing this work for the workpapers and then discarded the scratch paper and report copies. The auditor’s note stated. “The ratios and other statistics in the quarterly board reports were checked for the last four quarters, and appropriate supporting documents were examined. All amounts appear to be appropriate.” In this situation:

 

A.

Four quarters is not a large enough sample on which to base a conclusion.

B.

The auditor’s workpapers are not sufficient to facilitate an efficient review of the auditor’s work.

C.

The auditor should have included the scratch paper in the workpapers.

D.

The auditor should have considered whether the information in the board report was compiled efficiently.

 

Correct Answer: B

 

 

QUESTION 93

A retail company uses a computer program that matches electronic vendor invoices with the applicable purchase orders and receiving information, which are also maintained electronically. If an invoice does not match the other items within predefined ranges, a report is generated and sent to the accounts payable department for further investigation. All of the applicable documents are electronically marked, cross-referenced, and retained in open files. Both an integrated test facility and a systems control audit review file (SCARF) have been included in the system. An auditor wants to determine the extent to which items are not matched at year end and to investigate the potential causes of the unmatched items. Which of the following audit procedures would be most effective in determining the items to investigate?

 

A.

Use generalized audit software to read the electronically marked unmatched items.

B.

Use generalized audit software to read the purchase orders and trace to applicable receiving and vendor invoice files.

C.

Use the SCARF to identify unusual items. Select an attributes sample and trace to the underlying documentation.

D.

Submit test data to identify attributes of unmatched items. Follow up by investigating the identified attributes.

 

Correct Answer: A

 

 

QUESTION 94

In which of the following situations would it be most appropriate to employ the services of a forensic specialist?

 

A.

Detection of unauthorized changes to source documents.

B.

Review for misapplication of general computer controls over accounts receivable.

C.

Investigation of ghost employees in a large business.

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Verification of fixed assets in a manufacturing company.

 

Correct Answer: A

 

 

QUESTION 95

During an interview with a manager in a company’s claims department, an auditor noted that the manager became nervous and changed the subject whenever the auditor raised questions about certain types of claims. The manager’s answers were consistent with company policies and procedures. When documenting the interview, the auditor should:

 

A.

Document the manager’s answers, noting the nature of the nonverbal communication.

B.

Document the manager’s answers but not the nonverbal communication because it is subjective and is not corroborated.

C.

Conclude that the nonverbal communication is persuasive and that sufficient evidence exists to begin a fraud investigation.

D.

Disregard the interview entirely because the verbal and nonverbal communications were contradictory.

 

Correct Answer: A

 

 

QUESTION 96

Which of the following factors would increase the confidence level in a variables sampling plan?

 

I. A larger sample size.

 

II. A stratified sample.

 

III. A larger standard deviation.

 

A.

I and II only

B.

I and III only

C.

II and III only

D.

I, II, and III

 

Correct Answer: A

 

 

QUESTION 97

Which of the following would be an appropriate and effective control self-assessment approach in an organization with an authoritative culture?

 

I. Facilitated meeting

 

II. Survey

 

III. Management-produced analysis

 

A.

I only

B.

I and III only

C.

II and III only

D.

I, II, and III

 

Correct Answer: C

 

 

QUESTION 98

In order to effectively elicit sensitive information from an employee during an audit engagement, an auditor should:

 

A.

Tell the employee a piece of information obtained from a coworker in a previous interview.

B.

Put sensitive questions at the beginning of a questionnaire to ensure that they are answered.

C.

Explain that the auditor’s reputation for integrity, which is vital to the auditor’s business success, would be seriously damaged if confidentiality were breached.

D.

Point out that management has given the auditor full authority to conduct this interview.

 

Correct Answer: C

 

 

QUESTION 99

The chief audit executive (CAE) determined that based on management’s oral response, the action taken regarding an audit observation was sufficient when weighted against the relative importance of the audit recommendation. Which of the following is the most appropriate step for the internal auditor to take next?

 

A.

Initiate a follow-up audit to ensure that action has really been taken.

B.

Follow-up with management until a written response is obtained.

C.

Escalate the issue to the board and get their position on the issue.

D.

Note in the permanent file that follow-up needs to be performed as part of the next engagement.

 

Correct Answer: D

 

 

QUESTION 100

During an audit of a branch bank, an internal auditor learned that a series of system failures had resulted in a four-day delay in processing customers’ scheduled payroll direct deposits. The first failure was that of a disk drive, followed by software and other minor failures. Which of the following controls should the auditor recommend to avoid similar delays in processing?

 

A.

Contingency planning.

B.

Redundancy checks.

C.

Process monitoring.

D.

Preventive maintenance.

 

Correct Answer: A

 

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