IIA CIA Certification Exam Questions with AI Explanations

QUESTION: 306

An audit of a company's accounts payable found that the individuals responsible for maintaining the vendor master file could also enter vendor invoices into the accounts payable system. During the exit conference, management agreed to correct this problem. When performing a follow-up engagement of accounts payable, the auditor should expect to find that management has

Transferred the individuals who maintained the vendor master file to another department to ensure that responsibilities are appropriately segregated.
Compared the vendor and employee master files to determine if any unauthorized vendors have been added to the vendor master file.
Changed the access control system to prevent employees from both entering invoices and approving payments.
Modified the accounts payable system to prevent individuals who maintain the vendor master file from entering invoices.

Answer(s): D

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QUESTION: 307

An audit of an organization's claims department determined that a large number of duplicate payments had been issued due to problems in the claims processing system. During the exit conference, the vice president of the claims department informed the auditors that attempts to recover the duplicate payments would be initiated immediately and that the claims processing system would be enhanced within six months to correct the problems. Based on this response, the chief audit executive should

Adjust the scope of the next regularly scheduled audit to assess controls within the claims processing system.
Discuss the findings with the audit committee and ask the committee to determine the appropriate followup action.
Schedule a followup engagement within six months to assess the status of corrective action.
Monitor the status of corrective action and schedule a followup engagement when appropriate.

Answer(s): D

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QUESTION: 308

What is the primary factor that determines the depth and breadth of audit followup?

The engagement client's written response to the audit findings.
The auditor's assessment of risk associated with the audit findings.
The auditor's assessment of personnel responsible for correcting audit findings.
The availability of audit personnel and financial resources.

Answer(s): B

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QUESTION: 309

An audit of customer accounts receivable found that outstanding receivables as a percentage of revenue had increased significantly during the past two years. The increase was attributed to the extension of credit, at the urging of the marketing department, to a number of companies that were not creditworthy. Which of the following would be least useful in monitoring the disposition of this finding?

Responses from the manager of accounts receivable regarding collection of outstanding receivables.
Periodic updates from the controller regarding the status of corrective actions.
Information from the credit and marketing personnel assigned the responsibility for reevaluating credit policies.
Updates from the information technology division regarding implementation of a new accounts receivable system.

Answer(s): D

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QUESTION: 310

Given the scarcity of internal audit resources, a chief audit executive (CAE) decided not to schedule a followup of audit recommendations when developing engagement work schedules. Does the CAE's decision violate the Standards?

No, because the Standards do not specify whether followup is needed.
No, because when there is evidence of sufficient motivation by the client, there is no need for followup action.
Yes, because scarcity of resources is not a sufficient reason to omit followup action.
Yes, because the Standards require the auditors to determine whether the client has appropriately implemented all of the auditor's recommendations.

Answer(s): C

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