An audit of a company's accounts payable found that the individuals responsible for maintaining the vendor master file could also enter vendor invoices into the accounts payable system. During the exit conference, management agreed to correct this problem. When performing a follow-up engagement of accounts payable, the auditor should expect to find that management has:
A. Transferred the individuals who maintained the vendor master file to another department to ensure that responsibilities are appropriately segregated.
B. Compared the vendor and employee master files to determine if any unauthorized vendors have been added to the vendor master file.
C. Changed the access control system to prevent employees from both entering invoices and approving payments.
D. Modified the accounts payable system to prevent individuals who maintain the vendor master file from entering invoices.
During which of the following systems development stages would it be most useful for an internal auditor to be involved?
A. Coding and testing.
B. User acceptance and post-implementation.
C. Design and implementation.
D. Testing and user acceptance.
Which of the following factors is least essential to a successful control self-assessment workshop?
A. Voting technology.
B. Facilitation training.
C. Prior planning.
D. Group dynamics.
Which of the following would not be characteristic of control self-assessment implemented by an audit department?
A. An auditor usually facilitates the discussion during the workshop phase while another records comments for subsequent use.
B. Auditors and business-unit employees work as a team.
C. Auditors perform traditional audit tests to identify control weaknesses.
D. Participants discuss the control weaknesses that hinder the achievement of objectives.
Which of the following is an advantage of control self-assessment (CSA) over conventional auditing techniques?
A. CSA evaluates control activities and human resource practices.
B. CSA provides assurance about whether business objectives will be met.
C. CSA facilitates obtaining input from subject-matter experts efficiently.
D. CSA provides assurance that action will be taken to improve deficiencies.
Which of the following techniques could be used to evaluate the effectiveness of changes to the operation of a computer help line?
A. Benchmarking.
B. Baseline measurements.
C. Walk-throughs.
D. Quality circles.
One method for dealing with the uncertainty of demand forecasts used in linear programming is to extend the model solution to include.
A. Sensitivity analysis.
B. Goal seeking.
C. Branch-and-bound solutions.
D. Nonlinear programming.
After completing a net present value (NPV) calculation on a proposed project, an analyst explores the change in NPV with changes in the interest rate. This additional analysis is referred to as:
A. Decision analysis.
B. simulation.
C. Sensitivity analysis.
D. Variance analysis.
A company used simple regression analysis to analyze maintenance costs against machine hours (MH) for a 26-week period when the plant was in full operation. The regression yielded the following estimated cost function:
Maintenance Cost = $60 + $0.25/MH
The regression analysis also generated a coefficient of determination (R2), or goodness of fit, of 0.85. Which of the following statements regarding this regression analysis is appropriate?
A. This regression can be used to determine the maintenance cost for any period at any activity level by substituting the machine hours in the equation.
B. The $60 component represents the best estimate of fixed maintenance costs for the company in a shutdown situation.
C. The $0.25 component is the slope coefficient of the cost estimate and represents the average variable maintenance cost per machine hour.
D. The coefficient of determination of R2 = 0.85 indicates that the goodness of fit is poor because the value is close to the maximum value of one.
Five brand managers in a consumer products company met to determine how well certain promotions had performed. The data that they needed to analyze consisted of approximately 50 gigabytes of daily point-ofsale (POS) data for each month. The brand managers tried to download the POS data from the mainframe and import it into microcomputer spreadsheets for analysis. Their efforts were unsuccessful, most likely because of:
A. The complexity of the mainframe data structure and the large volume of data.
B. The difficulty of establishing access privileges for each subset of the mainframe data.
C. Inconsistencies in the mainframe data due to lack of integrity constraints on the data files.
D. Error-prone transmission links for downloading the data from the mainframe data files.
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