[Oct 04, 2021] IIA-ACCA Ultimate Study Guide - DumpsFree
Ultimate Guide to Prepare IIA-ACCA Certification Exam for CIA Challenge in 2021
NEW QUESTION 41
Which of the following data analytics tools would be applied by an internal audit activity positioned at the lowest level of maturity?
- A. Data visualization applications.
- B. Spreadsheets.
- C. Workflow and data capture technology
- D. Software integrated with central data warehouse
Answer: B
NEW QUESTION 42
Which of the following is an example of collusion?
- A. A vendor sends a duplicate invoice with a new invoice number, and the accounts payable system fails to detect the duplication.
- B. An employee works with the IT manager to develop a program for identifying duplicate invoice payments.
- C. An employee includes a faked receipt in his expense claim, and the claim is signed by the employee's manager.
- D. A vendor inflates the price of an item and remits a portion of the excess to the purchasing manager.
Answer: D
NEW QUESTION 43
According to Porter, which of the following is associated with fragmented industries?
- A. Strong negotiation power with suppliers.
- B. Significant scale economies.
- C. Weak entrance barriers.
- D. Steep experience curve.
Answer: C
NEW QUESTION 44
Which of the following is an example of a phishing attack?
- A. An organization's systems have been compromised by malicious software. The software locks the organization's operating system until d ransom is paid.
- B. An organization's website has been hacked. The hacker added political content that is not consistent with the organization's views.
- C. An employee receives an email that appears to be from the organization's bank, though it is not. The employee replies to the email and sends the requested confidential information.
- D. An organization's communication systems have been intercepted. A communication session is controlled by an unauthorized third party.
Answer: C
NEW QUESTION 45
Which of the following describes a key characteristic related to effective organizational communication?
- A. Unique operating environments with varying complexity.
- B. A culture of integrity and transparency.
- C. A well-designed system of internal controls.
- D. Comprehensive supervisory and verification procedures.
Answer: C
NEW QUESTION 46
According to IIA guidance, which of the following is not a responsibility of the chief audit executive pertaining to documenting information to support internal audit engagement results and conclusions?
- A. Developing retention requirements for engagement records that are consistent with organizational guidelines.
- B. Rating each engagement record to assess its relevance and accessibility for the organization's board.
- C. Controlling access to engagement records, including access by senior management.
- D. Forming policies governing the custody and retention of consulting engagement records before their release to other parties.
Answer: B
NEW QUESTION 47
Which of the following is the most likely reason an organization may decide to undertake a stock split?
- A. To keep stock price constant.
- B. To enhance the stock liquidity.
- C. To keep shareholders' equity constant.
- D. To increase shareholders' equity.
Answer: B
NEW QUESTION 48
Which of the following activities should the chief audit executive perform to ensure compliance with an organization's code of conduct?
- A. Act as an adviser to the committee responsible for reviewing violations of the code.
- B. Lead the committee responsible for the oversight of the code.
- C. Review and adjudicate all violations of the code of conduct.
- D. Implement a system of procedures to inform all employees of the code.
Answer: A
NEW QUESTION 49
According to IIA guidance, which of the following actions might place the independence of the internal audit function in jeopardy?
- A. Coordinating and managing the risk management process.
- B. Having no active role or involvement in the risk management process.
- C. Auditing the risk management process for reasonableness.
- D. Participating with management in identifying and evaluating risks.
Answer: A
NEW QUESTION 50
An organization had three large centralized divisions: one that received customer orders for service work; one that scheduled the service work at customer locations; and one that answered customer calls about service problems. These three divisions were restructured into seven regional groups, each of which performed all three functions. One advantage of this restructuring would be:
- A. Improved work flow.
- B. Greater economies of scale.
- C. Better internal controls.
- D. Increased specialization.
Answer: A
NEW QUESTION 51
Organizational activities that complement each other and create a competitive advantage are called a:
- A. Joint venture.
- B. Merger.
- C. Strategic fit.
- D. Strategic goal.
Answer: C
NEW QUESTION 52
Which of the following activities is most likely to require a fraud specialist to supplement the knowledge and skills of the internal audit activity?
- A. Interrogating a suspected fraudster.
- B. Employing audit tests to detect fraud.
- C. Completing a process review to improve controls to prevent fraud.
- D. Planning an engagement of the area in which fraud is suspected.
Answer: B
NEW QUESTION 53
What is the purpose of a secondary control?
- A. lt combines with other controls to help reduce significant risk exposures to an acceptable level.
- B. It helps to ensure the completeness and accuracy of automated controls in a system environment.
- C. It partially reduces the residual risk level when a key control does not operate effectively.
- D. It replaces primary controls that are either ineffective or cannot fully mitigate a risk.
Answer: A
NEW QUESTION 54
Which of the following actions are appropriate for the chief audit executive to perform when identifying audit resource requirements?
1. Consider employees from other operational areas as audit resources, to provide additional audit coverage in the organization.
2. Approach an external service provider to conduct internal audits on certain areas of the organization, due to a lack of skills in the organization.
3. Suggest to the audit committee that an audit of technology be deferred until staff can be trained, due to limited IT audit skills among the audit staff.
4. Communicate to senior management a summary report on the status and adequacy of audit resources.
- A. 2 and 4 only
- B. 1 and 3 only
- C. 1, 2, and 4
- D. 2, 3, and 4
Answer: C
NEW QUESTION 55
During an audit, the client questions the internal audit activity's authority to perform procedures over fraud allegations. According to HA guidance, which of the following would provide the most relevant support to respond to the client's concerns?
- A. The IIA's Code of Ethics.
- B. Internal audit charter.
- C. Definition of Internal Auditing.
- D. MA Standards.
Answer: B
NEW QUESTION 56
Technological uncertainty, subsidy, and spin-offs are usually characteristics of:
- A. Mature industries.
- B. Declining industries.
- C. Fragmented industries.
- D. Emerging industries.
Answer: D
NEW QUESTION 57
Which of the following is a key responsibility of a database administrator?
- A. Troubleshoot end user problems
- B. Provide physical security of databases
- C. Maintain database integrity
- D. Provide production support.
Answer: C
NEW QUESTION 58
An employee in the sales department completes a purchase requisition and forwards it to the purchaser. The purchaser places competitive bids and orders the requested items using approved purchase orders. When the employee receives the ordered items, she forwards the packing slips to the accounts payable department. The invoice for the ordered items is sent directly to the sales department, and an administrative assistant in the sales department forwards the invoices to the accounts payable department for payment. Which of the following audit steps best addresses the risk of fraud in the cash receipts process?
- A. Determine whether the accounts payable department reconciles all purchasing documents prior to payment.
- B. Verify that approvals of purchasing documents comply with the authority matrix.
- C. Observe whether the purchase orders are sequentially numbered.
- D. Examine whether the sales department supervisor approves invoices for payment.
Answer: D
NEW QUESTION 59
According to IIA guidance, which of the following statements is false regarding a review of the controls in place to prevent fraud?
- A. The review should assess whether the internal controls can be circumvented.
- B. The scope of the review does not need to include all operating areas of the organization.
- C. The review should focus on the efficiency of the controls in place to prevent fraud.
- D. The cost of the control should be compared to the benefit of mitigating the related risk.
Answer: C
NEW QUESTION 60
According to the COSO enterprise risk management framework, which of the following best describes the activity that helps ensure risk responses are carried out effectively?
- A. Objective setting.
- B. Event identification.
- C. Information and communication.
- D. Control activities.
Answer: D
NEW QUESTION 61
An internal auditor who is carrying out an engagement to review controls related to corporate tax reporting must possess which of the following competencies?
1. Proficiency in analyzing key IT risks and controls.
2. The ability to recognize significant deviations from good business practices.
3. Knowledge of key indicators of fraud in tax reporting.
4. The ability to recognize the existence of problems related to tax accounting.
- A. 1 and 4 only.
- B. 1,2, 3, and 4.
- C. 2, 3, and 4 only.
- D. 3 and 4 only.
Answer: D
NEW QUESTION 62
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