IIA IIA Certifications IIA-CIA-PART2 Questions & Answers

• Question 511:

  An internal auditor is discussing an audit problem with an engagement client. While listening to the client, the internal auditor should:

  A. Prepare a response to the client.

  B. Take mental notes on the speaker's nonverbal communication, as it is more important than what is being said.

  C. Make sure that all details, as well as the main ideas of the client, are remembered.

  D. Integrate the incoming information from the client with information that is already known.

  Correct Answer: D

• Question 512:

  An auditor is using an internal control questionnaire as part of a preliminary survey. Which of the following is the best reason for the auditor to interview management regarding the questionnaire responses?

  A. Interviews provide the opportunity to insert questions to probe promising areas.

  B. Interviews are the most efficient way to upgrade the information to the level of objective evidence.

  C. Interviewing is the least costly audit technique when a large amount of information is involved.

  D. Interviewing is the only audit procedure which does not require confirmation of the information that is obtained.

  Correct Answer: A

• Question 513:

  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 514:

  Which of the following describes an internal auditor's responsibilities to include audit procedures to detect fraud in audits of a multinational organization?

  A. International Accounting Standards require the internal auditor to include audit procedures which would detect fraud if it would cause a material misrepresentation of the financial statements.

  B. Internal auditors do not have any specific responsibilities with respect to including fraud-related audit procedures.

  C. Proper audit procedures, when carried out with due professional care, will guarantee that fraud, if present, will be detected.

  D. If significant control weaknesses are detected, additional tests should be directed toward other indicators of fraud.

  Correct Answer: D

• Question 515:

  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 516:

  During an audit of a retail organization, an internal auditor found a scheme in which the warehouse director and the purchasing agent diverted approximately $500,000 of goods to their own warehouse, then sold the goods to third parties. The fraud was not found earlier since the warehouse director updated the perpetual inventory records and then forwarded receiving reports to the accounts payable department for processing. Which of the following procedures would have most likely led to the discovery of the missing materials and the fraud?

  A. Select a random sample of receiving reports and trace to the recording in the perpetual inventory records. Note differences and investigate by type of product.

  B. Select a random sample of purchase orders and trace to receiving reports and to the records in the accounts payable department.

  C. Take an annual physical inventory, reconciling amounts with the perpetual inventory records. Note the pattern of differences and investigate.

  D. Select a random sample of sales invoices and trace to the perpetual inventory records to see if inventory was on hand. Investigate any differences.

  Correct Answer: C

• Question 517:

  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 518:

  If an auditor expects to find numerous discrepancies between recorded values and audited values of sample selections, which sampling technique would be most appropriate?

  A. Attributes sampling.

  B. Probability-proportional-to-size sampling.

  C. Difference estimation sampling.

  D. Discovery sampling.

  Correct Answer: C

• Question 519:

  In a sampling application, the group of items about which the auditor wants to estimate some characteristic is called the:

  A. Population.

  B. Attribute of interest.

  C. Sample.

  D. Sampling unit.

  Correct Answer: A

• Question 520:

  An internal auditor would most likely use attributes sampling when testing which of the following?

  A. Accounts receivable balances.

  B. Correct coding of accounts payable disbursement vouchers.

  C. Year-end inventory value.

  D. Fixed asset book value.

  Correct Answer: B