IIA-CIA-Part2 Practice Test

If an organization's chief audit executive wants to implement continuous auditing, what is the
appropriate order in which key steps should be undertaken?
I. Identify business applications that require access.
II. Implement steps to continuously assess risks and controls.
III. Define objectives of continuous auditing.
IV. Manage and report results.

A.

III, I, IV, II.

B.

II, I, III, IV.

C.

 III, I, II, IV.

D.

II, III, I, IV.

In which of the following situations would it be most appropriate to employ the services of a
forensic specialist?

A.

Detection of unauthorized changes to source documents.

B.

Review for misapplication of general computer controls over accounts receivable.

C.

Investigation of ghost employees in a large business.

D.

Verification of fixed assets in a manufacturing company

The following is an excerpt from an audit engagement workpaper:
A Company
Accounts Receivable
Date
Objective. To determine if the computer system is correctly recording all accounts receivable
transactions.
Procedures: Judgmental selection of a sample of all accounts receivable balances greater than
$50,000 for positive confirmation of balances.
Conclusion: Based on the results of testing wherein all but three confirmations were returned, the
accounts receivable balance is fairly presented in all material respects.
Which of the following is true regarding the workpaper?

A.

 It is not appropriate to judgmentally select a sample when testing accounts receivable.

B.

A conclusion should be reached only for the results of overall testing, not for individual
procedures.

C.

The audit procedures used are not consistent with the audit objective.

D.

The format of the workpaper does not conform to the standard format for workpapers.

Which of the following trends found on financial reports would most likely indicate a possible
problem?

A.

A material decrease in the receivables turnover.

B.

A material increase in inventory turnover.

C.

A material increase in daily sales compared to total outstanding receivables.

D.

A material increase in the acid-test ratio.

Which of the following situations would best support the decision of a chief audit executive (CAE)
to defer follow-up activity at a branch office until the next audit engagement?

A.

An audit of the branch office is routinely scheduled every three years.

B.

On-site follow-up of a remote branch may not be feasible due to travel costs.

C.

Branch office management states that correction of the audit issue may take longer than
expected.

D.

The CAE and management agree that the corrective action taken to date is sufficient.