IIA-CIA-PART2 practice questions 41–50

1. Question 41 · 475 in bank

   Which of the following would be an appropriate improvement to controls over large quantities of consumable material that are charged to expense when placed in bins which are accessible to production workers?

   • ARelocate bins to the inventory warehouse.
   • BRequire management to compare the cost of consumable items used to the budget.
   • CLock the bins during normal working hours.
   • DNone of the above actions are needed for items of minor cost and size.

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   Answer: B

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2. Question 42 · 475 in bank

   The chief audit executive (CAE) is adding a new audit position to the team. According to the International Professional Practices Framework, which of the following candidates would the CAE be least likely to accept for the position?

   • AThe candidate is applying for an IT audit position, while originally coming from an IT background, but has only experiences of financial and compliance audits in the previous position.
   • BThe candidate is knowledgeable about potential indicators of fraud including typical risks, but has only participated as a staff auditor in one investigative fraud audit.
   • CThe candidate meets the minimum educational requirements established by the chief audit executive, but has less formal education than any of the other candidates being considered.
   • DThe candidate provides examples of previous reports demonstrating excellent writing skills, but lacks ability to clearly communicate ideas and conclusions in a

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   Answer: D

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3. Question 43 · 475 in bank

   According to IIA guidance, which of the following is true about the supervising internal auditor's review notes? They are discussed with management prior to finalizing the audit. They may be discarded after working papers are amended as appropriate. They are created by the auditor to support her fieldwork in case of questions. They are not required to support observations issued in the audit report.

   • A1 and 3 only
   • B1 and 4 only
   • C2 and 3 only
   • D2 and 4 only

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   Answer: D

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4. Question 44 · 475 in bank

   Which of the following is a weakness that is inherent in the use of the test data method to test internal controls in a computer-based accounting system?

   • AThe auditor must test many transactions with the same condition in order to achieve assurance that the condition is being detected.
   • BConditions that were not specifically considered by the auditor may go untested.
   • CThe approach requires the creation of "dummy companies," possibly destroying or altering actual company data in the process.
   • DInclusion of atypical data in the test data may cause errors to be noted on the exception report.

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   Answer: B

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5. Question 45 · 475 in bank

   According to IIA guidance, which of the following are potential benefits of using an assurance map?

   • AIndication of any gaps in assurance coverage, and improved relevance of assurance recommendations.
   • BIdentification of duplicate or overlapping assurance activities, and improved relevance of assurance recommendations.
   • CIndication of gaps in assurance coverage, and enhanced effectiveness of assurance providers.
   • DEnhanced effectiveness of assurance providers, and improved relevance of assurance recommendations.

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   Answer: C

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6. Question 46 · 475 in bank

   Which of the following events would most likely cause the chief audit executive to consider changing the current year's audit plan? 1. The government announced that new regulatory requirements will be introduced in the coming years which may significantly impact the organization's primary product. 2. A major competitor unexpectedly introduced a new model at a lower price point to compete with the organization's market leading product. 3. The organization announced a new joint venture with a long time corporate partner to introduce a new product with development costs and sales beginning next fiscal year. 4. An equal joint venture partner filed a lawsuit against the organization and requested that the court issue an immediate suspension of future product shipments.

   • A1 and 2 only
   • B1 and 3 only
   • C2 and 4 only
   • D3 and 4 only

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   Answer: C

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7. Question 47 · 475 in bank

   Which of the following would be most helpful to a governmental auditor searching for the existence of multiple welfare claims that were filed under different names but used the same address?

   • ATagging and tracing.
   • BGeneralized audit software.
   • CIntegrated test facility.
   • DSpreadsheet analysis.

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   Answer: B

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8. Question 48 · 475 in bank

   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:

   • A1 minute.
   • B2 minutes.
   • C3 minutes.
   • D4 minutes.

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   Answer: C

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9. Question 49 · 475 in bank

   What would be used to determine the collectability of accounts receivable balances?

   • AThe file of related shipping documents.
   • BNegative accounts receivable confirmations.
   • CPositive accounts receivable confirmations.
   • DAn aged accounts receivable listing.

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   Answer: D

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10. Question 50 · 475 in bank

    Which of the following statements is true?

    • AConsulting engagements provide the internal audit activity with flexibility to add value and do not need to be included in the long-range audit plan.
    • BThe internal audit activity's plan of engagments must be based on a formal quantitative risk assessment.
    • CThe chief audit executive should consider changes to the long-range audit plan based on the requests of business unit managers.
    • DA risk assessment on which to base the internal audit activity's long-range plan must be undertaken at least once every three years.

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    Answer: C

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IIA-CIA-PART2 practice, question 41. 475 questions available.