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IIA Essentials of Internal Auditing Sample Questions (Q134-Q139):

NEW QUESTION # 134
Internal control processes in an organization require that all investments exceeding $20, 000 receive authorization from both the president and treasurer. After conducting a sample of these transactions, an auditor determined that 10 of the 500 investments in the sample had not included both required authorizations.
The sample has a five percent acceptable error rate. Based on this sample, which of the following actions should the auditor take?

Answer: B

Explanation:
Section: Volume D


NEW QUESTION # 135
Auditors 1, 2, and 3 work out of various offices. Each must be assigned to one, and only one, of three audit locations (A, B, or C). The cost of sending each auditor to each location is listed below:
Audit Locations
Auditor 1 A B
Auditor 2 $200 $300 $400
Auditor 3 $400 $300 $600
Auditor 4 $200 $200
$500
The minimum cost with which this assignment can be accomplished is:

Answer: B


NEW QUESTION # 136
Which of the following is an example of a risk avoidance strategy?

Answer: B

Explanation:
Exiting a product line is an example of risk avoidance. This strategy involves eliminating a specific threat or risk entirely by discontinuing the activity that generates the risk. In this context, ceasing operations of a product line effectively removes all associated risks related to that line of business.References: Risk management strategies and concepts


NEW QUESTION # 137
Which of the following would be an important aspect of an internal auditor's role in fraud management?

Answer: B

Explanation:
An important aspect of an internal auditor's role in fraud management is utilizing analytical techniques to actively discover instances of potential fraud. Internal auditors play a critical role in fraud detection by employing data analysis and other analytical methods to identify unusual patterns, anomalies, or red flags that could indicate fraudulent activities. By proactively using these techniques, auditors can help uncover fraud early and provide valuable insights to management for timely intervention.
References:
* The IIA Standards: Standard 1220 - Due Professional Care: "Internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor."
* IIA Practice Guide: "Fraud Prevention and Detection in an Automated World": Emphasizes the use of analytical techniques for identifying potential fraud.


NEW QUESTION # 138
Which of the following best describes how the increased use of computerization may impact an auditor's assessment of the risk of fraud?

Answer: D


NEW QUESTION # 139
......

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