IIA IIA Certifications IIA-CIA-PART2 Questions & Answers

• Question 491:

  A fast-food company is developing a computer simulation involving arrival time at a drive-through restaurant. The distribution for arrival times is:

  Time Single-Digit Random Between Arrivals Probability Number Assigned 1 minute

  0.1 2 minutes

  0.2 1, 2 3 minutes

  0.3 3, 4, 5 4 minutes

  0.4 6, 7, 8, 9

  Six random numbers are selected to represent the arrival of six cars: 1, 6, 9, 0, 5, 6. The mean time between arrivals for these cars, in this run of the simulation model, is:

  A. 1 minute.

  B. 2 minutes.

  C. 3 minutes.

  D. 4 minutes.

  Correct Answer: C

• Question 492:

  The internal auditor of a bank has developed a multiple regression model which has been used for a number of years to estimate the amount of interest income from commercial loans. During the current year, the auditor applies the model and discovers that the R2 value has decreased dramatically, but that the model otherwise seems to be working correctly. Which of the following conclusions is justified by the change?

  A. Changing to a cross-sectional regression analysis should cause the R2 to increase.

  B. Regression analysis is no longer an appropriate technique to estimate interest income.

  C. Some new factors, not included in the model, are causing interest income to change.

  D. A linear regression analysis would increase the model's reliability.

  Correct Answer: C

• Question 493:

  An internal auditor is evaluating controls over the purchasing function. The function includes the material control department, the purchasing department, and the receiving department. Which of the following is true regarding the presentation of the process flow among the three departments?

  A. A vertical flowchart of each department, showing inputs at the top and outputs at the bottom, would be most useful.

  B. Flowcharts are not useful for documenting process flow.

  C. A horizontal flowchart, with the departments described across the top and the process flowing horizontally, would be most useful.

  D. Both a flowchart and narratives are needed due to the number of departments involved.

  Correct Answer: C

• Question 494:

  Which of the following methods would an auditor most likely use to document a complex sales order process?

  A. Develop a horizontal flowchart, with supporting documentation for key control points.

  B. Create a critical path method chart, noting the processes involved for each step.

  C. Perform a process review, assigning time and cost to each step of the process to develop a hierarchy flowchart.

  D. Utilize a systems narrative, which can be updated during subsequent audits.

  Correct Answer: A

• Question 495:

  An auditor is performing a review of a complex process to identify opportunities to increase efficiency. What is the most practical way to document the process to identify areas of inefficiency?

  A. Write a description of the process activities in sequential order.

  B. Develop a PERT (program evaluation and review technique) diagram.

  C. Flowchart the process.

  D. Create a decision tree.

  Correct Answer: C

• Question 496:

  A manager of one of a retailer's several retail outlets is stealing cash from cash sales, recording the sales as accounts receivable, and subsequently writing off the fictitious accounts receivable as bad debts. Which of the following comparisons would be most effective in signaling the possibility of such a fraud?

  A. Bad debt expense as a percentage of sales, compared to that of the other outlets.

  B. Bad debt expense as a percentage of sales, compared to that of previous years.

  C. Percentage of past-due accounts receivable, compared to that of the other outlets.

  D. Percentage of past-due accounts receivable, compared to that of previous years.

  Correct Answer: A

• Question 497:

  A retail sales company has discontinued a product that normally sold for $100. During the first month of a sale of the product, a 20 percent discount was given. Later that sale price was reduced by an additional 40 percent. What was the overall discount from the original selling price?

  A. 60 percent.

  B. 52 percent.

  C. 48 percent.

  D. 30 percent.

  Correct Answer: B

• Question 498:

  A recent survey indicated that residents of a small town take the train to a nearby city eight times per month, on average. The same survey showed that the number of train trips that a resident takes per month

  (y)

  is determined by the number of days per month that the resident works in the nearby city (x), according to the equation: y = 2 + 2x. A person who never works in the nearby city is expected to take the train:

  A.

  Zero times per month.

  B.

  Two times per month.

  C.

  Four times per month.

  D.

  Eight times per month.

  Correct Answer: B

• Question 499:

  Which of the following factors could interfere with effective problem solving by an internal auditor?

  I. Reacting to previous experiences with clients.

  II. Focusing only on the most likely cause.

  III.

  Correcting the symptoms of problems.

  A.

  I only

  B.

  III only

  C.

  I and II only

  D.

  I, II, and III

  Correct Answer: D

• Question 500:

  A company owns a machine that will produce 100 light switches in four hours. Due to increased demand, a second machine capable of producing 100 light switches in three hours has been added.

  Approximately how many hours will it take to produce 100 light switches using both machines working together?

  A. 7.0

  B. 3.5

  C. 1.7

  D. 0.58

  Correct Answer: C