QUESTION: 165 Exam Topic: 2, Volume B

Which of the following conclusions would be appropriate for a beginning auditor performing an audit of a payroll department?

Employee taxes have been deducted at the correct rates, and the taxes have been forwarded to the appropriate government agency.
Although there is insufficient segregation of duties, the impact is mitigated by compensating controls.
The payroll computer system should be replaced.
The payroll department staff has the appropriate level of skills.

Answer(s): A

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QUESTION: 166 Exam Topic: 2, Volume B

An audit of customer accounts receivable found that outstanding receivables as a percentage of revenue had increased significantly during the past two years. The increase was attributed to the extension of credit, at the urging of the marketing department, to a number of companies that were not creditworthy. Which of the following would be least useful in monitoring the disposition of this finding?

Responses from the manager of accounts receivable regarding collection of outstanding receivables.
Periodic updates from the controller regarding the status of corrective actions.
Information from the credit and marketing personnel assigned the responsibility for reevaluating credit policies.
Updates from the information technology division regarding implementation of a new accounts receivable system.

Answer(s): D

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QUESTION: 167 Exam Topic: 2, Volume B

During an audit of a major metropolitan museum, an auditor was unable to locate selected items from the museum's collection. The director of the museum informed the auditor that the upcoming replacement of the museum's inventory tracking system would address the auditor's concerns.
What follow-up activity should the auditor propose?

Receive periodic feedback from museum staff regarding the status of the system implementation.
Monitor the system implementation and schedule a follow-up review once the new system is in place.
Determine whether the items are indeed missing and assess the ability of the new system to remedy the problem.
Schedule an audit of the museum's security systems to determine if theft is a problem.

Answer(s): C

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QUESTION: 168 Exam Topic: 2, Volume B

An audit of a Web-based third-party payment processor determined that a programming error enabled customers to create multiple accounts for each mailing address. This caused problems
during the processing of credit card transactions. Management agreed to correct the program and notify customers with multiple accounts that the accounts would be consolidated. What should the auditor do in response?

Amend the scope of the subsequent audit to verify that the program was corrected and that accounts were consolidated.
II. Evaluate the adequacy and effectiveness of the corrective action proposed by management.
III. Schedule a follow-up review to verify that the program was corrected and the accounts were consolidated.
IV. Do nothing because management has agreed to address the problem.
III only
IV only
I and II only
II and III only

Answer(s): D

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QUESTION: 165 Exam Topic: 2, Volume B

QUESTION: 166 Exam Topic: 2, Volume B

QUESTION: 167 Exam Topic: 2, Volume B

QUESTION: 168 Exam Topic: 2, Volume B