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IIA Practice of Internal Auditing Sample Questions (Q280-Q285):

NEW QUESTION # 280
Persuasive evidence indicates that a member of senior management has been involved in insider trading that would be considered fraudulent. However, the evidence was encountered during an operational audit and is not considered relevant to the audit. Which of the following is the most appropriate action for the chief audit executive to take?

A. Report the evidence to external legal counsel for investigation. Report the legal counsel findings to management.
B. Discontinue audit work associated with the insider trading since it is not relevant to the existing audit.
C. Report the evidence to the chairperson of the audit committee and recommend an investigation.
D. Conduct sufficient audit work to conclude whether fraudulent activity has taken place, then report the findings to the chairperson of the audit committee and to government officials if appropriate action is not taken.

Answer: C

NEW QUESTION # 281
It is close to the fiscal year end for a government agency, and the chief audit executive (CAE) has the following items to submit to either the board or the chief executive officer (CEO) forapproval. According to IIA guidance, which of the following items should be submitted only to the CEO?

A. The internal audit budget and resource plan for the coming fiscal year.
B. The internal audit risk assessment and audit plan for the next fiscal year.
C. A request for an increase of the CAE's salary for the next fiscal year.
D. The evaluation and compensation of the internal audit team.

Answer: D

NEW QUESTION # 282
Many questionnaires are made up of a series of different questions that use the same response categories (for example: strongly agree, agree, neither, disagree, strongly disagree). Some designs will have different groups of respondents answer alternate versions of the questionnaire that present the questions in different orders and reverse the orientation of the endpoints of the scale (for example: agree on the right and disagree on the left). The purpose of such questionnaire variations is to:

A. Reduce the effects of pattern response tendencies.
B. Make it possible to get information about more than one population parameter using the same questions.
C. Eliminate intentional misrepresentations.
D. Test whether respondents are reading the questionnaire.

Answer: A

NEW QUESTION # 283
During the development of a purchasing system, an auditor reviewed the payment authorization program. Which of the following actions should the auditor recommend for a situation in which the quantity invoiced is greater than the quantity received?

A. Pay the amount billed and adjust the inventory account for the difference.
B. Authorize payment of the full invoice, but maintain an open purchase order record for the missing goods.
C. Issue an exception report.
D. Return the invoice to the vendor for correction.

Answer: C

NEW QUESTION # 284
The following are potential sources of evidence regarding the effectiveness of a division's total quality management program. The least persuasive evidence would be a comparison of:

A. Employee morale before and after program implementation.
B. Scrap and rework costs before and after program implementation.
C. Manufacturing and distribution costs per unit before and after program implementation.
D. Customer returns before and after program implementation.

Answer: A

NEW QUESTION # 285
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