Which two of the following considerations must an internal auditor take into account while planning an audit of an accounting system/application that has been in use for the last five
years?
The level and manner of linkages between the business' mission, objectives, and structure and the accounting system/application.
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Presence or absence of computerized and manual controls that address risks.
Identification of risks at the application level, e.g. availability and security of the
system.
Testing of the system/application for bugs and errors.
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• A.2 and 3 only.
• B.2 and 4 only.
• C.1 and 3 only.
• D.3 and 4 only.

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Which of the following is not a primary purpose for conducting a walk-through during the initial stages of an assurance engagement?

• A.To determine segregation of duties.
• B.To identify residual risks.
• C.To test the adequacy of controls.
• D.To help develop process maps.

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Which of the following would constitute a violation of the IIA Code of Ethics?

• A.An internal auditor discovered an internal financial fraud during the year, and the financial statements were adjusted to properly reflect the loss associated with the fraud. The auditor discussed the fraud with the external auditor during the external auditor's review of the working papers detailing the incident.
• B.An internal auditor has accepted an assignment to audit the warehousing function six months from now.
  The auditor has no expertise in that area but has signed up for courses in warehousing that will be completed before the assignment begins.
• C.An internal auditor, who has recently joined the organization, has accepted an assignment to audit the electronics manufacturing division. The auditor previously served as senior auditor for the external audit of that division and has audited many electronics companies during the past two years.
• D.An internal auditor has no ambitions for promotion and has not engaged in training or other professional development activities during the last three years. The auditor's performance assessments indicate consistent quality of work.

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Which of the following would cause a company's accounts receivable turnover ratio to decrease steadily over a three-year period?

• A.An increase in the discount offered for early payment.
• B.Increased cash sales.
• C.A more liberal credit policy.
• D.Invoices provided on a weekly rather than a monthly basis.

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A consumer electronics company is considering acquiring a small flash memory manufacturer. An internal auditor has been assigned to determine if the manufacturer's accounts payable contain all outstanding liabilities. Which audit procedure is not relevant for this objective?

• A.Verify the period of liability of subsequent cash disbursements using related supporting documentation.
• B.Verify a sample of accounts payable by using related invoices, receiving reports, and purchase orders.
• C.Trace receiving reports issued before the period end to the accounts payable list and vendor invoices.
• D.Send confirmations, including zero-balance accounts, to vendors with whom the manufacturer normally does business.

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