1.
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Which of the following best describes the primary purpose of audit procedures?
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To detect errors or fraud
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To comply with United States generally accepted accounting principles (GAAP)
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To gather corroborative evidence
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To verify the accuracy of account balances
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2.
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An internal audit serves to review accounting, financial, and other operations by
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A legal investigation
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An independent appraisal activity
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A regulatory agent
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The Internal Revenue Service
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3.
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The internal auditor assures that company assets are used economically and efficiently and are
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The latest in technology
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Quality designed
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Used in compliance with IRS
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Accounted for and safeguarded from losses of all kinds.
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4.
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The Certified Internal Auditor (CIA) exam covers the following subject area(s) except:
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Internal audit process
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Business law
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Internal audit skills
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Management control and information technology
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5.
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An example of an audit tool can be
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An inventory
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An alarm system
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A questionnaire
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Antivirus software
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6.
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The cost of shipping cartons should have something to do with the number of units sold. This is an example of
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Proportional analysis
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Pre-audit
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Regression
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Verification
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7.
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The information gathered by the internal auditor from departments or operation sections is termed the
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Post-audit
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Verification
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Pre-audit
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Evaluation
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8.
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The internal audit report must be factual, based on hard evidence and include
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A resume of all personnel
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A summary of major findings and recommendations
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A list of products and services for future development
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A guarantee that no internal fraud exists
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9.
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Management audits involve and effect
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Only first level management
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Only middle management
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All levels of management
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Only senior management
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10.
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A factor to consider in assessing control environment includes
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The software components
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The hardware
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The safety systems
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The integrity and ethical values
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11.
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_____________________________ may be relevant to the risk of preparing financial statements that are not in conformity with United States generally accepted accounting principles
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Budgets
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Expanded foreign operations
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Forecasts
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Recording transactions
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12.
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Internal control should be monitored in order to identify deficiencies which could adversely affect the operations of an entity and
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The policies of the company
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The public and social climate
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The external economic conditions
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The financial statement presentation
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13.
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The internal control as a whole should provide
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A system of checks and balances
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List of all personnel
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Descriptions of the hardware and software
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An unconditional guarantee that no fraud or collusion or misappropriation exists
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14.
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The Foreign Corrupt Practices Act contains prohibitions against
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Mismanagement
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Hostile takeovers
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Hedging of currency risk
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Ineffective internal control
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15.
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Under Section 404 of the Sarbanes-Oxley Act, the role of internal control over financial reporting is
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To provide assurances of the quality of a firms business model
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To support the integrity and reliability of a firms external financial reporting process
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To provide assurances about the firms performance
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To provide assurances of a firms future results
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16.
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The reporting requirements for management and the independent auditor to report on the effectiveness of internal control over financial reporting is called
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US GAAP reporting requirement
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The new model reporting requirement of the Sarbanes-Oxley Act
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Prospective financial statement reporting
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Internal Revenue's most recent ruling
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17.
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Management’s report must indicate that internal control over financial reporting is either
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Subjective or objective
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Regulated or unregulated
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General or exclusive
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Effective or ineffective
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