Free Access IIA.IIA-CIA-Part2.v2026-06-24.q355 Practice Test (Page 6)

Question 21

Which of the following best describes external benchmarking using trend analysis for a subsidiary of an international company?

A.Comparing the sales of the subsidiary with the budgeted figures for the last two periods

B.Comparing the sales of the subsidiary with the sales of another subsidiary for the last two periods.

C.Comparing common-size financial statements of the subsidiary with the averages of the industry for the last two periods

D.Comparing the current ratio of the subsidiary with the current ratio of another company for the same period

Question 22

Checklists used to assess audit risk have been criticized for all of the following reasons except:

A.Inappropriately implying equal weight to each item on the checklist.

B.Providing a false sense of security that all relevant factors are addressed.

C.Decreasing the uniformity of data acquisition.

D.Being incapable of translating the experience or sound reasoning intended to be captured by each item on the checklist.

Question 23

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

A.Invoices provided on a weekly rather than a monthly basis.

B.A more liberal credit policy.

C.An increase in the discount offered for early payment.

D.Increased cash sales.

Question 24

An internal auditor wants to determine whether employees are complying with the information security policy, which prohibits leaving sensitive information on employee desks overnight. The auditor checked a sample of
90 desks and found eight that contained sensitive information. How should this observation be reported, if the organization tolerates 4 percent noncompliance?

A.The matter does not need to be reported, because the noncompliant findings fall within the acceptable tolerance limit.

B.The deviations are within the acceptable tolerance limit, so the matter only needs to be reported to the information security manager.

C.The incidents of noncompliance fall outside the acceptable tolerance limit and require immediate corrective action, as opposed to reporting.

D.The incidents of noncompliance exceed the tolerance level and should be included in the final engagement report.

Question 25

Below is a flowchart detailing an organization's bank reconciliation process. Which of the following conclusions can be drawn from the flowchart?

A.There is a conflict in the segregation of duties between preparing bank reconciliations and posting payments to the accounting books.

B.There is an appropriate segregation of duties in the treasury department during the bank reconciliation process.

C.There is a large workload for the treasury accountant during the bank reconciliation process.

D.Bank statements should be obtained at a higher level, such as through the treasury supervisor.

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Question 21

Question 22

Question 23

Question 24

Question 25

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