Free IQN QIA Practice Exam with Questions & Answers | Set: 2

The purchasing manager of a manufacturing company was concerned with the rising prices of some direct materials provided by a supplier. The purchasing manager told the supplier to either maintain the current prices or withdraw as a supplier for the company's direct materials. The supplier devised a plan to circumvent the purchasing manager's intent without actually violating the purchasing manager's mandate.

Which one of the following is the probable action taken by the supplier?

Data gathered in support of an audit conclusion can be rated on a continuum of reliability.

The most reliable form of evidence would be an

An internal auditor plans to use an analytical review to verify the correctness of various operating expenses in a division.

The use of an analytical review as a verification technique would not be a preferred approach if

An organization uses a service bureau to process its hourly payroll transactions. The internal auditor is concerned that the hourly payroll for the year has been processed correctly and, in particular, the computation of employee withholding for pension contributions is in accordance with the union contract, which specifies charges each quarter.

Which of the following audit procedures would best accomplish the audit objective?

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

Which of the following statements conveys negative information in such a way that a favorable response from the auditee may still be achieved?

An audit team has been assigned to review ‘the customer satisfaction measurement system’ that the industrial products division implemented two years ago. This system consists of the division's customer service office conducting an annual mail survey. A survey is sent to 100 purchasing departments randomly selected from all customers who made purchases in the prior 12 months. The survey is three pages long and its 30 questions use a mixture of response modes (e.g., some questions are open-ended, some multiple choice, and others use a response scale). The customer service office mails the survey in September and tabulates the results for questionnaires returned by October 15. Only one mail is sent. If the customer does not return the questionnaire, no follow-up is conducted. When the survey was last conducted, 45 of the questionnaires were not returned.

Which of the following is not an advantage of face-to-face interviews over mail surveys?

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

The internal auditors of a financial institution are auditing the institution's investing and lending activities. During the last year, the institution has adopted new policies and procedures for monitoring investments and the loan portfolio. The auditors know that the organisation has invested in new types of financial instruments during the year and is heavily involved in the use of financial derivatives to appropriately hedge risks

The audit committee has expressed concern that the financial institution has been taking on higher-risk loans in pursuit of short term profit goals.

Which of the following audit procedures would provide the least amount of information to address this audit concern?

Which of the following audit committee activities would be of the greatest benefit to the internal auditing department?