IIA-CIA-PART2 practice questions 51–60

1. Question 51 · 475 in bank

   According to IIA guidance, which of the following are appropriate actions for the chief audit executive regarding management's response to audit recommendations?

   • AEvaluate and verify management's response, and determine the need and scope for additional work.
   • BEvaluate and verify management's response, and establish timelines for corrective action by management.
   • COversee the corrective actions undertaken by management, and determine the need and scope for additional work.
   • DOversee the corrective actions undertaken by management, and establish timelines for corrective action by management.

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   Answer: A

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2. Question 52 · 475 in bank

   What type of analysis is performed when an auditor tests for unusual variations in information by comparing the number of employees working at a factory site with the direct cost of production each month over a period of one year?

   • ATrend analysis.
   • BRatio analysis.
   • CRegression analysis.
   • DHorizontal analysis.

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   Answer: C

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3. Question 53 · 475 in bank

   In performance auditing, which of the following must first be determined by the internal auditor?

   • AWhich key performance indicators are in use.
   • BManagement's objectives for the process.
   • CWhether management controls are appropriate.
   • DDetermination that appropriate benchmarks are in place.

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   Answer: B

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4. Question 54 · 475 in bank

   Which of the following would provide the best evidence of compliance with an airline's standard of having aircraft refueled and cleaned within a specified time of arrival at an airport?

   • AVendor fuel invoices that have been reconciled to inventory records.
   • BTime cards completed by aircraft cleaning and fueling crews.
   • CObservation of selected aircraft while they are being refueled and cleaned.
   • DComparison of the standard hourly labor costs for cleaning and fueling personnel with actual labor charges.

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   Answer: C

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5. Question 55 · 475 in bank

   A company's policy requires that all customers be treated in a fair and consistent manner. Which of the following audit procedures would provide the most persuasive evidence that the policy was followed?

   • ACompare the aging of outstanding receivables due from each customer.
   • BCompare credit reports with annual sales for a sample of customers.
   • CCompare the ratio of outstanding receivables to the authorized credit limit for each customer.
   • DCompare the sales discounts offered to each customer.

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   Answer: D

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6. Question 56 · 475 in bank

   According to the Standards, which of the following best describes what must be agreed upon to establish an understanding with clients prior to starting a consulting engagement?

   • AThe engagement objectives, access to clients records, and expectations.
   • BThe engagement objectives, scope, and time frame to complete the engagement.
   • CThe engagement scope, opportunities for making significant improvements, and client expectations.
   • DThe engagement objectives, scope, respective responsibilities, and other client expectations.

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   Answer: D

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7. Question 57 · 475 in bank

   The newly appointed chief audit executive (CAE) of a large multinational corporation, with seasoned internal audit departments located around the world, is reviewing responsibilities for engagement reports. According to IIA guidance, which of the following statements is true?

   • AThe CAE is required to review, approve, and sign every engagement report.
   • BThe CAE is required to review, approve, and sign all regulatory compliance engagement reports only
   • CThe CAE may delegate responsibility for reviewing, approving and signing engagement reports, but should review the reports after they are issued.
   • DThe internal audit charter must identify authorized signers of engagement reports.

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   Answer: C

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8. Question 58 · 475 in bank

   Which of the following data sources would provide the least valid data for an audit of a retail store's customer service?

   • AA graph that compares staffing levels for selected times with store traffic (number of customers) over the same time period.
   • BA random survey of customer satisfaction given to customers as they leave the store.
   • CInterviews of randomly selected service personnel regarding the quality of service that they provide.
   • DA graph of customer service training across stores, comparing training with overall levels of service satisfaction.

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   Answer: C

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9. Question 59 · 475 in bank

   An auditor plans to analyze customer satisfaction, including: (1) customer complaints recorded by the customer service department during the last three months; (2) merchandise returned in the last three months; and (3) responses to a survey of customers who made purchases in the last three months. Which of the following statements regarding this audit approach is correct?

   • AAlthough useful, such an analysis does not address any risk factors.
   • BThe survey would not consider customers who did not make purchases in the last three months.
   • CSteps 1 and 2 of the analysis are not necessary or cost-effective if the customer survey is comprehensive.
   • DAnalysis of three months' activity would not evaluate customer satisfaction.

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   Answer: B

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10. Question 60 · 475 in bank

    An airline contracted with an external service provider to perform maintenance on all aircraft ground support equipment. Management then asked the internal audit activity (IAA) to evaluate the controls in place that would permit appropriate oversight of the service provider in maintaining required maintenance standards. According to the International Professional Practices Framework, which of the following would be the most appropriate course of action for the IAA to undertake to establish the engagement objectives?

    • ADevelop a draft audit plan and create an appropriate scope and resource schedule.
    • BDevelop a preliminary audit program and obtain senior management's approval.
    • CConduct a preliminary assessment of the risks associated with the maintenance contract.
    • DObtain a copy of the maintenance contract and review the contract for pricing discrepancies.

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    Answer: C

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IIA-CIA-PART2 practice, question 51. 475 questions available.