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NEW QUESTION 31
An accounts receivable clerk receives cash payments,posts the payments to customer accounts,and prepares the daily cash deposit.
The clerk has been stealing some cash and manipulating the customer payments to hide the theft.
This fraud could be detected with which of the following controls?

A. Total cash deposits for the month are reconciled to the cash receipts journal.B. Names,amounts,and dates on remittance advices are reconciled with the names,amounts,and dates recorded in the cash receipts journal.C. Monthly bank reconciliations are performed by the clerk on a timely basis.D. Total cash deposits are compared with the bank reconciliation.

Answer: B

 

NEW QUESTION 32
A staff auditor, nearly finished with an audit engagement, discovers that the director of marketing has a gambling habit. The gambling issue is not directly related to the existing engagement, and there is pressure to complete the current engagement. The auditor notes the problem and forwards the information to the chief audit executive, but performs no further follow-up. Which of the following statements is true about the auditor's actions?

A. They are in violation of neither the IIA Code of Ethics nor the Standards.B. They are in violation of the Standards because the auditor did not properly follow up on a red flag that might indicate the existence of fraud.C. They are in violation of the IIA Code of Ethics because the auditor withheld meaningful information.D. They are not in violation of the Standards but are in violation of the IIA Code of Ethics.

Answer: A

 

NEW QUESTION 33
A candidate has applied for an entry level internal audit position. The candidate holds a CISA (Certified Information Systems Auditor) designation, and has six months of audit experience, but limited knowledge of accounting principles and techniques. According to the IIA guidance, which of the following is the most relevant reason for the chief audit executive to consider this candidate?

A. Accounting skills can be learned over time with appropriate training.B. Other internal auditors possess sufficient knowledge of accounting principles and techniques.C. An entry level position does not require expertise in any particular area.D. The candidate's information systems knowledge and real-world experience in internal auditing.

Answer: D

 

NEW QUESTION 34
An internal auditor has taken an attributes sample of a bank's existing loan portfolio. Out of a sample of 60 loans,the auditorfound:
- Four that were not properly collateralized. - Five that were not in compliance with bank policies (other than lack of collateralization). - Four that were part of a related-party group,but were set up as separate loan entities. - Of the 60 loans selected in the sample,these errors were noted on a total of 10 loans. - Several loans had multiple problems.
Which of the following conclusions can the auditor reach from these observations?
1.There is sufficient evidence that fraudulent activity is taking place by one or more of the
bank's lending officers.
2.The financial statements will be misstated as a result of these actions.
3.There are significant noncompliance audit findings that should be reported.

A. 2 and 3onlyB. 3onlyC. 1 and 2onlyD. 1 and 3only

Answer: B

 

NEW QUESTION 35
......

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