CIA Exam Part 1: Study Unit 5 Questions
and Answers 100% Solved
Which of the following is a false statement about the reliability of audit evidence?
A. The more effective the organization's internal control, the more assurance it provides about
the accounting data.
B. A copy of a document is as reliable as the original.
C. Evidence obtained from independent sources outside the organization is more reliable than
evidence obtained from internal sources.
D. The auditor's direct personal knowledge is more reliable than information obtained indirectly.
Correct Answ_Answer (B) is correct.
Internal auditors must identify sufficient, reliable, relevant, and useful information to achieve
the engagement's objectives. Reliable information is best attainable through the use of
appropriate engagement (interpretation). Several factors increase the reliability of audit evidence.
Evidence is more reliable if it is (1) obtained from sources independent of the engagement client,
(2) corroborated by other information, and (3) direct, such as the internal auditor's personal
observation. Also, an original document is more reliable than a copy.
Which of the following evidence is the most reliable?
,A. Evidence corroborated by engagement client management.
B. Hearsay from an independent source.
C. Expert appraisal by audit client engineer.
D. Original, signed contract corroborated by a bank's copies of checks. Correct
Answ_Answer (D) is correct.
Evidence is more reliable if it is (1) obtained from sources independent of the engagement client,
such as confirmations of receivables or expert appraisals that are timely and made by a source
with no connection to the auditee; (2) corroborated by other information; (3) direct, such as the
internal auditor's personal observation, rather than indirect, such as hearsay; and (4) an original
document, not a copy. The original copy of the contract with the contracted price, corroborated
by a bank's (independent party's) copy of the payment checks, is more reliable than the other
choices.
Which of the following constitutes sufficient audit evidence for verifying air travel
reimbursement?
A. Either a pre-printed ticket or a boarding pass.
B. Either a printout of an electronic ticket or a boarding pass.
C. Both a printout of an electronic ticket and a boarding pass.
,D. Either a pre-printed ticket or a printout of an electronic ticket. Correct Answ_Answer (C)
is correct.
An electronic ticket verifies payment, and a boarding pass verifies that the employee actually
took the flight instead of cashing in the ticket and using a cheaper form of transportation.
To verify the proper value of costs charged to real property records for improvements to the
property, the best source of information is
A. Inspection by the internal auditor of real property improvements.
B. A letter signed by the real property manager asserting the propriety of costs incurred.
C. Original invoices supporting entries into the accounting records.
D. Comparison of billed amounts with contract estimates. Correct Answ_Answer (C) is
correct.
To verify real property costs, the best method of obtaining engagement information is to examine
records. Records originating outside the engagement client, such as original invoices, are much
more reliable than internal documents or engagement client testimony. Also, these invoices
support actual accounting record entries.
Ordinarily, what source of information should most affect the internal auditor's conclusions?
, A. External.
B. Inquiry.
C. Oral.
D. Informal. Correct Answ_Answer (A) is correct.
External information is ordinarily more reliable than the other types of information listed
because it is generated from sources independent of the engagement client. The internal auditor
should select the strongest information available to support engagement observations,
conclusions, and recommendations.
An internal auditor's objective is to determine the cause of inventory shortages shown by the
physical inventories taken by an independent service organization that used some engagement
client personnel. The internal auditor addresses this objective by reviewing the count sheets,
inventory printouts, and memos from the last inventory. The source of information and the
sufficiency of this information are
A. Internal and not sufficient.
B. External and sufficient.
C. Both external and internal and sufficient.
D. Both external and internal and not sufficient. Correct Answ_Answer (D) is correct.
and Answers 100% Solved
Which of the following is a false statement about the reliability of audit evidence?
A. The more effective the organization's internal control, the more assurance it provides about
the accounting data.
B. A copy of a document is as reliable as the original.
C. Evidence obtained from independent sources outside the organization is more reliable than
evidence obtained from internal sources.
D. The auditor's direct personal knowledge is more reliable than information obtained indirectly.
Correct Answ_Answer (B) is correct.
Internal auditors must identify sufficient, reliable, relevant, and useful information to achieve
the engagement's objectives. Reliable information is best attainable through the use of
appropriate engagement (interpretation). Several factors increase the reliability of audit evidence.
Evidence is more reliable if it is (1) obtained from sources independent of the engagement client,
(2) corroborated by other information, and (3) direct, such as the internal auditor's personal
observation. Also, an original document is more reliable than a copy.
Which of the following evidence is the most reliable?
,A. Evidence corroborated by engagement client management.
B. Hearsay from an independent source.
C. Expert appraisal by audit client engineer.
D. Original, signed contract corroborated by a bank's copies of checks. Correct
Answ_Answer (D) is correct.
Evidence is more reliable if it is (1) obtained from sources independent of the engagement client,
such as confirmations of receivables or expert appraisals that are timely and made by a source
with no connection to the auditee; (2) corroborated by other information; (3) direct, such as the
internal auditor's personal observation, rather than indirect, such as hearsay; and (4) an original
document, not a copy. The original copy of the contract with the contracted price, corroborated
by a bank's (independent party's) copy of the payment checks, is more reliable than the other
choices.
Which of the following constitutes sufficient audit evidence for verifying air travel
reimbursement?
A. Either a pre-printed ticket or a boarding pass.
B. Either a printout of an electronic ticket or a boarding pass.
C. Both a printout of an electronic ticket and a boarding pass.
,D. Either a pre-printed ticket or a printout of an electronic ticket. Correct Answ_Answer (C)
is correct.
An electronic ticket verifies payment, and a boarding pass verifies that the employee actually
took the flight instead of cashing in the ticket and using a cheaper form of transportation.
To verify the proper value of costs charged to real property records for improvements to the
property, the best source of information is
A. Inspection by the internal auditor of real property improvements.
B. A letter signed by the real property manager asserting the propriety of costs incurred.
C. Original invoices supporting entries into the accounting records.
D. Comparison of billed amounts with contract estimates. Correct Answ_Answer (C) is
correct.
To verify real property costs, the best method of obtaining engagement information is to examine
records. Records originating outside the engagement client, such as original invoices, are much
more reliable than internal documents or engagement client testimony. Also, these invoices
support actual accounting record entries.
Ordinarily, what source of information should most affect the internal auditor's conclusions?
, A. External.
B. Inquiry.
C. Oral.
D. Informal. Correct Answ_Answer (A) is correct.
External information is ordinarily more reliable than the other types of information listed
because it is generated from sources independent of the engagement client. The internal auditor
should select the strongest information available to support engagement observations,
conclusions, and recommendations.
An internal auditor's objective is to determine the cause of inventory shortages shown by the
physical inventories taken by an independent service organization that used some engagement
client personnel. The internal auditor addresses this objective by reviewing the count sheets,
inventory printouts, and memos from the last inventory. The source of information and the
sufficiency of this information are
A. Internal and not sufficient.
B. External and sufficient.
C. Both external and internal and sufficient.
D. Both external and internal and not sufficient. Correct Answ_Answer (D) is correct.
