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QIA Questions and Answers

Question # 6

An internal audit director has noticed that staff auditors are presenting more oral reports to supplement written reports.

The best reason for the increased use of oral reports by the auditors is that they

A.

Reduce the amount of testing required to support audit findings.

B.

Can be delivered in an informal manner without preparation.

C.

Can be prepared using a flexible format, thereby increasing overall audit efficiency.

D.

Permit auditors to counter arguments and provide additional information that the audience may require.

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Question # 7

The objective of a program results audit requires the auditor to

A.

Place an emphasis on outputs rather than inputs.

B.

Look for cost savings or waste.

C.

Include only historical data in the audit.

D.

Render an opinion on the fairness of financial presentation.

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Question # 8

An audit of accounts payable was made to determine if the error rate was within the stated policy of 0.5%. One hundred of the 10,000 accounts payable transactions were randomly selected using a 95% confidence level. No errors were found.

With 95% certainty, one can conclude that the sample results

A.

Indicate another sample is needed.

B.

Prove there are no errors in accounts payable.

C.

Indicate the null hypothesis is false.

D.

Fail to prove the error rate is above 0.5%.

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Question # 9

The requirements for staffing level, education and training, and audit research should be included in

A.

The internal auditing department's charter.

B.

The internal auditing department's policies and procedures manual.

C.

The annual plan for the internal auditing department.

D.

Job descriptions for the various staff positions.

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Question # 10

An audit team has been assigned to review ‘the customer satisfaction measurement system’ that the industrial products division implemented two years ago. This system consists of the division's customer service office conducting an annual mail survey. A survey is sent to 100 purchasing departments randomly selected from all customers who made purchases in the prior 12 months. The survey is three pages long and its 30 questions use a mixture of response modes (e.g., some questions are open-ended, some multiple choice, and others use a response scale). The customer service office mails the survey in September and tabulates the results for questionnaires returned by October 15. Only one mail is sent. If the customer does not return the questionnaire, no follow-up is conducted. When the survey was last conducted, 45 of the questionnaires were not returned.

Which of the following is not an advantage of face-to-face interviews over mail surveys?

A.

The response rate is typically higher.

B.

Interviewers can increase a respondent's comprehension of questions.

C.

Survey designers can use a wider variety of types of questions.

D.

They are less expensive since mailing costs are avoided.

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Question # 11

An organization uses a service bureau to process its hourly payroll transactions. The internal auditor is concerned that the hourly payroll for the year has been processed correctly and, in particular, the computation of employee withholding for pension contributions is in accordance with the union contract, which specifies charges each quarter.

Which of the following audit procedures would best accomplish the audit objective?

A.

Select a random sample of all hourly payroll transactions for the reporting period, re-compute pay and withholding items, and compare the result with that obtained from the service bureau.

B.

Select a stratified sample of all hourly and salaried payroll transactions for an entire reporting period, perform the necessary activities, and then compare the result with that obtained from the service bureau.

C.

Select a discovery sampling of all payroll transactions for an entire reporting period and then follow up on any findings.

D.

Submit a set of test data to the service bureau during an annual audit and compare the service bureau's processing with the auditor's predetermined computations on the same test data.

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Question # 12

Computer fraud is discouraged by

A.

Being willing to prosecute.

B.

Ostracizingwhistle-blowers.

C.

Overlooking inefficiencies in the judicial system.

D.

Accepting the lack of integrity in the system.

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