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| Topic | Details |
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| Topic 1 | - Practice of Internal Auditing: This domain covers strategies and policies related to planning, organizing, controlling of internal audit processes, and understanding administrative activities such as resourcing, recruiting, and staffing. Moreover, this domain covers goals of engagement and assessment criteria in addition to planning the engagement to ensure the identification of key risks and controls.
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| Topic 2 | - Business Knowledge for Internal Auditing: This domain covers the vital planning phases and efforts and common performance measures. It also includes ways for management to effectively lead and counsel people to increase their commitment. Also, the domain covers financial accounting and managerial accounting fundamentals and the treatment of various costs.
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| Topic 3 | - Essentials of Internal Auditing: This domain has topics such as foundations of internal auditing, independence aconcept of governance and CSR.nd objectivity, Proficiency and Due Professional Care, QA, and Managing Risks. The domain covers describing the
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IIA Qualified Info Systems Auditor CIA Challenge Exam Sample Questions (Q136-Q141):
NEW QUESTION # 136
A bakery chain has a statistical model that can be used to predict daily sales at individual stores based on a direct relationship to the cost of ingredients used and an inverse relationship to rainy days What conditions would an auditor look for as an Indicator of employee theft of food from a specific store?
- A. Both total sales and cost of ingredients used are less than expected.
- B. On a sunny day. total sales are less than expected when compared to the cost of ingredients used.
- C. On a rainy day. total sales are greater than expected when compared to the cost of ingredients used.
- D. Both total sales and cost of ingredients used are greater than expected.
Answer: C
Explanation:
The statistical model indicates that daily sales have a direct relationship with the cost of ingredients used and an inverse relationship with rainy days.
NEW QUESTION # 137
Which of the following statements is true regarding engagement planning?
- A. The planning phase of the engagement should be completed and approved before the fieldwork of the engagement begins.
- B. The audit engagement objectives should be based on operational managements view of risk objectives
- C. The scope of the engagement should be planned according to the internal audit activity's budget and then aligned to the risk universe.
- D. The main purpose of the engagement work program is to determine the nature and timing of procedures required to gather audit evidence
Answer: A
Explanation:
Proper engagement planning is essential to ensure that the internal audit engagement is conducted effectively and efficiently.
Completing and approving the planning phase before starting the fieldwork ensures that all objectives, scope, resources, and methodologies are well-defined and agreed upon. This preparation helps in aligning the engagement with the overall audit strategy and reduces the risk of scope changes or misalignments during fieldwork.
NEW QUESTION # 138
A multinational organization has multiple divisions that sell their products internally to other divisions When selling internally, which of the following transfer prices would lead to the best decisions for the organization?
- A. Variable cost plus a markup.
- B. Market price of the product.
- C. Full cost plus a markup.
- D. Full cost
Answer: B
Explanation:
Using the market price of the product for internal transfer pricing leads to the best decisions for the organization because it reflects the true economic value of the goods or services being transferred. This method promotes efficiency and fairness within the divisions.
* Economic Value: Market price reflects the true economic value, ensuring that the internal transactions are conducted at fair and competitive prices.
* Performance Measurement: It provides a consistent basis for evaluating the performance of different divisions, as they are measured against external market conditions.
* Resource Allocation: Helps in optimal allocation of resources by ensuring that internal transactions are economically justified and comparable to external transactions.
References:
* "Management Accounting: Principles and Practices," which discusses the advantages of using market-based transfer pricing .
NEW QUESTION # 139
Which of the following resources would be most effective for an organization that would like to improve how it informs stakeholders of its social responsibility performance?
- A. COSO's enterprise risk management framework.
- B. ISO 26000
- C. Open Compliance and Ethics Group.
- D. Global Reporting Initiative.
Answer: D
Explanation:
* Understanding the GRI:The Global Reporting Initiative (GRI) provides a comprehensive framework for reporting on sustainability performance, including social responsibility aspects.
* Framework and Standards:GRI standards are widely used and recognized globally, which helps organizations benchmark their performance against other entities using the same framework.
* Stakeholder Communication:The GRI framework emphasizes transparency and accountability in reporting, making it an effective tool for informing stakeholders about an organization's social responsibility performance.
* Comprehensive Coverage:GRI covers various aspects of social responsibility, including economic, environmental, and social impacts, providing a holistic view of an organization's performance.
References:
* The Global Reporting Initiative (GRI) .
NEW QUESTION # 140
A bicycle manufacturer incurs a combination of fixed and variable costs with the production of each bicycle. Which of the following statements is true regarding these costs?
- A. if the number of bicycles produced is increased by 15 percent, the variable cost per unit will increase proportionally
- B. The total variable cost will vary proportionally and inversely with the number of bicycles produced during a production run.
- C. if the number of bicycles produced is increased by 30 percent, the fixed cost per unit will decline.
- D. The fixed cost per unit will vary directly based on the number of bicycles produced during the production cycle.
Answer: C
Explanation:
Introduction:
Understanding cost behavior is crucial in managing production and financial performance in manufacturing.
Cost Characteristics:
Fixed costs remain constant in total but vary per unit with changes in production volume. Variable costs vary directly with production volume but remain constant per unit.
NEW QUESTION # 141
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