A high-volume retailer of consumer goods has used point-of-sale data to record sales and
update inventory records for several years. When price changes are scheduled,corporate
headquarters downloads a price change file to a computer server system at each store.
Each store's assistant manager is responsible for checking the server for downloads and
running the program that updates the store's price file at the authorized price update time.
In comparison with having headquarters initiate the price update centrally,this approach to
price updating will most likely:

A.

Decrease the risk that customers will be undercharged consistently for sales items.

B.

Decrease the risk that item prices will sometimes be inaccurate.

C.

Increase the risk that customers will be undercharged consistently for sales items.

D.

Increase the risk that item prices will sometimes be inaccurate.

Which of the following factors affects the control risk of a company?

A.

Potential problems like technological obsolescence.

B.

Unusual pressures on management.

C.

Complex accounts that require expert valuations.

D.

Segregation of duties.

Which of the following should be incorporated in a risk management policy?
I.Boundaries and limit structures.
II.Requirements for reporting risk.
III.Risk authorities.

A.

I and IIonly

B.

I and IIIonly

C.

II and IIIonly

D.

I,II,and III.

A bakery chain has a statistical model that can be used to predict daily sales at individual
stores based on a direct relationship to the cost of ingredients used and an inverse
relationship to rainy days. What conditions would an auditor look for as an indicator of
employee theft of food from a specific store?

A.

On a rainy day,total sales are greater than expected when compared to the cost of ingredients used.

B.

On a sunny day,total sales are less than expected when compared to the cost of ingredients used.

C.

Both total sales and cost of ingredients used are greater than expected.

D.

Both total sales and cost of ingredients used are less than expected.

If an internal auditor discloses confidential information in response to a lawsuit,the internal
auditor hasviolated.

A.

The IIA Code of Ethics.

B.

The Standards.

C.

Both the IIA Code of Ethics and the Standards.

D.

Neither the IIA Code of Ethics nor the Standards.

An employee who recently transferred into the internal audit activity has been assigned to
audit the accounts payable system.
Which function,if previously performed by the auditor,would represent a conflict of interest?

A.

Monitoring the allowance for doubtful accounts.

B.

Writing procedures for the handling of duplicate payments.

C.

Signing timekeeping cards for subordinates.

D.

Reviewing shipping documents for accuracy.

An auditor is using audit software to check inventory accuracy. Which of the following
would be an indicator of poor input edit controls?

A.

Negative quantities on hand.

B.

Total dollar values of zero for some parts.

C.

Alpha characters in the field for order lead time.

D.

Reorder levels set too high.

Which of the following represents the correct order of the risk management process?

A.

Resource allocation,risk management metrics,risk assessment,post-mortem
analysis,effective communication.

B.

Risk management metrics,resource allocation,risk assessment,effective
communication,post-mortem analysis.

C.

Risk assessment,resource allocation,risk governance and reporting,post-mortem
analysis,feedback.

D.

Resource allocation,risk monitoring,risk assessment,feedback,post-mortem analysis.

Which of the following components influences the risk consciousness of an organization's
people and is the basis for all other components of enterprise risk management?

A.

Objective setting.

B.

Information and Communication.

C.

Risk Assessment.

D.

Internal Environment.

Which of the following is not an appropriate control related to sales in a manufacturing company?

A.

Customers' orders are recorded promptly.

B.

Goods shipped are matched with valid customer orders.

C.

Goods returned are inspected for damage by the sales department and then entered into inventory.

D.

Credit department approval is required for credit sales transactions.