Question 1

Which of the following would not be considered part of preliminary survey of an engagement area?

Options :

A : Interviews with individuals affected by the entity.

B : Functional walk through test.

C : Analytical reviews.

D : Sampling scope.

Answer: D

Question 2

Which of the following conditions is the most likely indicator of fraud?

Options :

A : Commissions are paid based on verified increases to sales.

B : Departmental reports are consistently issued in an untimely manner.

C : A manager regularly assumes subordinates' duties.

D : Lower earnings occur during the industry-s down cycle.

Answer: C

Question 3

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?

Options :

A : Rating each engagement record to assess its relevance and accessibility for the organization-s board.

B : Controlling access to engagement records, including access by senior management.

C : Developing retention requirements for engagement records that are consistent with organizational guidelines.

D : Forming policies governing the custody and retention of consulting engagement records before their release to other parties.

Answer: A

Question 4

Which segregation of duties would best reduce the risk of payroll fraud?

Options :

A : Human resources personnel add employees, and payroll personnel process hours and enter employee bank account numbers. Paychecks are automatically deposited in the employee-s bank account.

B : Human resources personnel add employees, payroll personnel process hours, and human resources personnel deliver paychecks to employees.

C : Human resources personnel add employees, review and submit payroll hours to the payroll department for processing, and deliver paychecks to employees.

D : Human resources personnel add employees and enter employee bank information. Payroll personnel process hours, and paychecks are automatically deposited in the employee-s bank account.

Answer: A

Question 5

According to IIA guidance, which of the following must internal auditors consider to conform with the requirements for due professional care during a consulting engagement?

1. The cost of the engagement, as it pertains to audit time and expenses in relation to the potential benefits.

2. The needs and expectation of clients, including the nature, timing, and communication of engagement results.

3. The application of technology-based audit and other data analysis techniques, where appropriate.

4. The relative complexity and extent of work needed to achieve the engagement's objectives.

Options :

A : 1, 2, and 3

B : 1, 2, and 4

C : 1, 3, and 4

D : 2, 3, and 4

Answer: B

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