An organization has developed a large database that tracks employees,employee
benefits,payroll deductions,job classifications,and other similar information. In order to test
whether data currently within the automated system are correct,an auditorshould:

A.

Use test data and determine whether all the data entered are captured correctly in the
updated database.

B.

Select a sample of data to be entered for a few days and trace the data to the updated
database to determine the correctness of the updates.

C.

 Use generalized audit software to provide a printout of all employees with invalid job
descriptions. Investigate the causes of the problems.

D.

Use generalized audit software to select a sample of employees from the database.
Verify the data fields.
 

An internal auditor plans to use an analytical review to verify the correctness of various
operating expenses in a division. The use of an analytical review as a verification technique
would not be a preferred approachif.

A.

The auditor notes strong indicators of a specific fraud involving this account.

B.

The company has relatively stable operations which have not changed much over the past year.

C.

The auditor would like to identify large,unusual,or non-recurring transactions during the year.

D.

The operating expenses vary in relation to other operating expenses,but not in relation to revenue.

Which of the following would be a violation of the IIA Code of Ethics?

A.

Reporting information that could be damaging to the organization,at the request of a court of law.

B.

Including an issue in the final audit report after management has resolved the issue.

C.

Participating in an audit engagement for which the auditor does not have the necessary
experience or training.

D.

Accepting a gift that is a commercial advertisement available to the public.

An organization has a policy requiring two signatures on all checks written for amounts in
excess of $10,000. When evaluating controls over disbursements,an auditor would
conclude that a greater risk existsif.

A.

The auditor located two checks for $9,000 each that contained one authorized signature.

B.

The $10,000 was an immaterial amount to the organization and very few cash
disbursements required an amount in excess of $10,000.

C.

The director of accounting was not one of the authorized signers.

D.

There were several instances in which successively numbered checks for amounts
between $5,000 and $10,000 were made payable to the same vendor.

An organization's accounts payable function improved its internal controls significantly after
it received an unsatisfactory audit report.
When planning a follow-up audit of the function,what level of detection risk should be
expected if the audit and sampling procedures used are unchanged from the prior audit?

A.

Detection risk is lower because control risk is lower.

B.

Detection risk is lower because control risk is higher.

C.

Detection risk is higher because control risk is lower.

D.

Detection risk is unchanged although control risk is lower.

Which of the following measurements could an auditor use in an audit of the efficiency of a
motor vehicle inspection facility?

A.

The total number of cars approved.

B.

The ratio of cars rejected to total cars inspected.

C.

The number of cars inspected per inspection agent.

D.

The average amount of fees collected per cashier.

To promote a positive image within an organization,a chief audit executive (CAE) adjusted
the audit plan to focus on assurance engagements that highlighted potential costs to be
saved. Negative observations were to be omitted from engagement final communications.
Which action taken by the CAE would be considered a violation of the Standards?
I.The focus of the audit function was changed without modifying the audit charter or notifying the audit committee.
II.Negative observations were omitted from the engagement final communications.
III.Cost savings and recommendations were highlighted in the engagement final communications.

A.

IIonly

B.

I and IIonly

C.

I and IIIonly

D.

I,II,and III.

In a manufacturing organization,all sales prices are determined centrally and are
electronically sent to the distribution centers to update their sales price tables. Any pricing
deviations must beapproved by central headquarters. To determine how this process is
functioning,an internal auditorshould:

A.

Document the flow of sales price information,and determine how the table is accessed and updated.

B.

Develop a flowchart of the sales order process to determine how orders are taken and priced.

C.

Identify who approves the shipment of goods and how the goods are priced.

D.

Obtain a copy of the existing flowchart for the computer program to determine how price
data are accessed.

Which of the following activities most significantly increases the risk that a bank will make
poor-quality loans to its customers?

A.

Borrowers may not sign all required mortgage loan documentation.

B.

Fees paid by the borrower at the time of the loan may not be deposited in a timely manner.

C.

The bank's loan documentation may not meet the government's disclosure requirements.

D.

Loan officers may override the lending criteria established by senior management.

Which of the following statements regarding segregation of duties is true?

A.

When evaluating an organization's policy on segregation of duties,employee
competence does not need to be considered.

B.

An organizational chart provides an accurate definition of segregation of duties.

C.

A restrictive segregation-of-duties policy can help improve an organization's communication.

D.

Policies on segregation of duties in information systems must recognize the difference
between logical and physical access to assets.