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IQN QIA - Qualified Internal Auditor

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Total 80 questions

A Qualified Internal Auditor directs the audit function for a large city and is planning the audit schedule for the next year. The city has a number of different funds, some that are restricted in use by government grants and some that require compliance reports to the government. One of the programs for which the city has received a grant is job retraining and placement. The grant specifies certain conditions a participant in the program must meet in order to be eligible for the funding.

The auditor must determine the applicable laws and regulations.

Which of the following procedures would be the least effective in learning about the applicable laws and regulations?

A.

Make inquiries of the city's chief financial officer, legal counsel, or grant administrators.

B.

Review prior year working papers and enquire of officials as to changes.

C.

Review applicable grant agreements.

D.

Discuss the matter with the audit committee and make inquiries as to the nature of the requirements and the audit committee's objectives for the audit.

Due to the small number of staffs, one remote unit's petty cash custodian also had responsibility for the imprest fund checking account reconciliation. The cashier concealed a diversion of funds by altering the beginning balance on the monthly reconciliations sent to the group office.

A possible audit test to detect this would be to

A.

Compare monthly balances and use change and trend analysis.

B.

Require additional monitoring by headquarters whenever improper segregation of duties exists at remote units.

C.

Determine if any employees have high personal debt.

D.

Determine if any employees are leading expensive lifestyles.

Which of the following is not a component of audit risk?

A.

Inherent risk

B.

Control risk

C.

Defective risk

D.

Detection risk

Purchases from two new vendors increased dramatically after a new buyer was hired. The buyer was obtaining kickbacks from the two vendors based on sales volume.

A possible means of detection is

A.

Periodic vendor surveys regarding potential buyer conflict of interest or ethics violations.

B.

The receipt of an invoice to put new vendors on the master file.

C.

The use of purchase orders for all purchases.

D.

The use of change analysis and trend analysis of buyer or vendor activity.

Which of the following is not an activity of internal audit function?

A.

Examining financial and operating information

B.

Review of the economy, efficiency and effectiveness of operations

C.

Review of compliance with laws, regulations and other external requirements

D.

Confirming that the final result (the sum) is correct

An auditor selected a random sample of 100 items from a population of 2,000 items. The total dollars in the sample were $10,000, and the standard deviation was $10. If the achieved precision based on this sample was plus or minus $4,000, the minimum acceptable value of the population would be

A.

$204,000

B.

$196,000

C.

$199,000

D.

$199,800

Which of the following types of tests would be the most persuasive if an internal auditor wanted assurance of the existence of inventory stored in a warehouse?

A.

Examination of the shipping documents supporting recorded transfers to and from the warehouse.

B.

Obtaining written confirmation from management.

C.

Physically observing the inventory in the warehouse.

D.

Examination of warehouse receipts contained in the auditee's records.

Internal auditing is responsible for reporting fraud to senior management or the board when

A.

The incidence of fraud of a material amount has been established to a reasonable certainty.

B.

Suspicious activities have been reported to internal auditing.

C.

Irregular transactions have been identified and are under investigation.

D.

The review of all suspected fraud related transactions is complete.

Working papers serve the following purpose for the internal auditor:

A.

Provide the auditee a place to make responses to audit recommendations.

B.

Make the audit report more readable by providing a place to append exhibits.

C.

Provide the principal evidential support for the internal auditor's report.

D.

Provide a place to summarise overall audit recommendations.

A company with 14,344 customers determines that the mean and median accounts receivable balances for the year are $15,412 and $10,382, respectively.

From this information, the auditor can conclude that the distribution of the accounts receivable balances is continuous and

A.

Negatively skewed.

B.

Positively skewed.

C.

Symmetrically skewed.

D.

Evenly distributed between the mean and median.