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Pass the IIA CIA Challenge Exam IIA-ACCA Questions and answers with ExamsMirror

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Viewing page 8 out of 13 pages

Viewing questions 106-120 out of questions

Questions # 106:

An audit client responded to recommendations from a recent consulting engagement. The client indicated that several recommended process improvements would not be implemented. Which of the following actions should the internal audit activity take in response?

Options:

Escalate the unresolved issues to the board, because they could pose significant risk exposures to the organization.

Confirm the decision with management and document this decision in the audit file.

Document the issue in the audit file and follow up until the issues are resolved.

Initiate an assurance engagement on the unresolved issues.

Questions # 107:

According to the Standards, which of the following is leastimportant in determining the adequacy of an annual audit plan?

Options:

Sufficiency.

Appropriateness.

Effective deployment.

Cost effectiveness.

Questions # 108:

An employee in the sales department completes a purchase requisition and forwards it to the purchaser. The purchaser places competitive bids and orders the requested items using approved purchase orders. When the employee receives the ordered items, she forwards the packing slips to the accounts payable department. The invoice for the ordered items is sent directly to the sales department, and an administrative assistant in the sales department forwards the invoices to the accounts payable department for payment. Which of the following audit steps best addresses the risk of fraud in the cash receipts process?

Options:

Verify that approvals of purchasing documents comply with the authority matrix.

Observe whether the purchase orders are sequentially numbered.

Examine whether the sales department supervisor approves invoices for payment.

Determine whether the accounts payable department reconciles all purchasing documents prior to payment.

Questions # 109:

Which of the following is not an outcome of control self-assessment?

Options:

Informal, soft controls are omitted, and greater focus is placed on hard controls.

The entire objectives-risks-controls infrastructure of an organization is subject to greater monitoring and continuous improvement.

Internal auditors become involved in and knowledgeable about the self-assessment process.

Nonaudit employees become experienced in assessing controls and associating control processes with managing risks.

Questions # 110:

A draft internal audit report that cites deficient conditions generally should be reviewed with which of the following groups?

1. The client manager and her superior.

2. Anyone who may object to the report’s validity.

3. Anyone required to take action.

4. The same individuals who receive the final report.

Options:

1 only

1 and 2 only

1, 2, and 3

1, 2, and 4

Questions # 111:

Which of the following is the primary purpose of financial statement audit engagements?

Options:

To assess the efficiency and effectiveness of the accounting department.

To evaluate organizational and departmental structures, including assessments of process flows related to financial matters.

To provide a review of routine financial reports, including analyses of selected accounts for compliance with generally accepted accounting principles.

To provide an analysis of business process controls in the accounting department, including tests of compliance with internal policies and procedures.

Questions # 112:

Which of the following is not a primary purpose for conducting a walk-through during the initial stages of an assurance engagement?

Options:

To help develop process maps.

To determine segregation of duties.

To identify residual risks.

To test the adequacy of controls.

Questions # 113:

Which of the following factors would the auditor in charge be least likely to consider when assigning tasks to audit team members for an engagement?

Options:

The amount of experience the auditors have conducting audits in the specific area of the organization.

The availability of the auditors in relation to the availability of key client staff.

Whether the budgeted hours are sufficient to complete the audit within the current scope.

Whether outside resources will be needed, and their availability.

Questions # 114:

The external auditor has identified a number of production process control deficiencies involving several departments. As a result, senior management has asked the internal audit activity to complete internal control training for all related staff. According to IIA guidance, which of the following would be the most appropriate course of action for the chief audit executive to follow?

Options:

Refuse to accept the consulting engagement because it would be a violation of independence.

Collaborate with the external auditor to ensure the most efficient use of resources.

Accept the engagement but hire an external training specialist to provide the necessary expertise.

Accept the engagement even if the audit engagement staff was previously responsible for operational areas being trained.

Questions # 115:

An internal auditor is conducting a review of the procurement function and uncovers a potential conflict of interest between the chief operating officer and a significant supplier of IT software development services. Which of the following actions is most appropriate for the internal auditor to take?

Options:

Inform the audit supervisor.

Investigate the potential conflict of interest.

Inform the external auditors of the potential conflict of interest.

Disregard the potential conflict, because it is outside the scope of the audit assignment.

Questions # 116:

Which of the following best describes the four components of a balanced scorecard?

Options:

Customers, innovation, growth, and internal processes.

Business objectives, critical success factors, innovation, and growth.

Customers, support, critical success factors, and learning.

Financial measures, learning and growth, customers, and internal processes.

Questions # 117:

According to IIA guidance, which of the following strategies would add the least value to the achievement of the internal audit activity's (IAA's) objectives?

Options:

Align organizational activities to internal audit activities and measure according to the approved IAA performance measures.

Establish a periodic review of monitoring and reporting processes to help ensure relevant IAA reporting.

Use the results of IAA engagement and advisory reporting to guide current and future internal audit activities.

Establish a format and frequency for IAA reporting that is appropriate and aligns with the organization's governance structure.

Questions # 118:

Which of the following is an effective approach for internal auditors to take to improve collaboration with audit clients during an engagement?

1. Obtain control concerns from the client before the audit begins so the internal auditor can tailor the scope accordingly.

2. Discuss the engagement plan with the client so the client can understand the reasoning behind the approach.

3. Review test criteria and procedures where the client expresses concerns about the type of tests to be conducted.

4. Provide all observations at the end of the audit to ensure the client is in agreement with the facts before publishing the report.

Options:

1 and 2 only

1 and 4 only

2 and 3 only

3 and 4 only

Questions # 119:

Which of the following should be included in a privacy audit engagement?

1. Assess the appropriateness of the information gathered.

2. Review the methods used to collect information.

3. Consider whether the information collected is in compliance with applicable laws.

4. Determine how the information is stored.

Options:

1 and 3 only

2 and 4 only

1, 3, and 4 only

1, 2, 3, and 4

Questions # 120:

During a fraud interview, it was discovered that unquestioned authority enabled a vice president to steal funds from the organization. Which of the following best describes this condition?