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Free IIA-CIA-Part2 Exam Braindumps (page: 54)

Page 19 of 128
PDF with 937 Questions

Which of the following does not represent a difficulty in using red flags as fraud indicators?

  1. Many common red flags are also associated with situations where no fraud exists.
  2. Some red flags are difficult to quantify or to evaluate.
  3. Red flag information is only gathered in extraordinary circumstances.
  4. The red flags literature is not well enough established to have a positive impact on auditing.

Answer(s): D



Which of the following might alert an auditor to the possibility of fraud in a division?

  1. The division is not scheduled for an external audit this year.
    II. Sales have increased by 10 percent.
    III. A significant portion of management's compensation is directly tied to reported net income of the division.
  2. I only
  3. III only
  4. I and II only
  5. I, II, and III

Answer(s): B



The most common motivation for management fraud is the existence of:

  1. Vices, such as a gambling habit.
  2. Job dissatisfaction.
  3. Financial pressures on the organization.
  4. The challenge of committing the perfect crime.

Answer(s): C



Which of the following conditions is the strongest indicator of possible fraud?

  1. An assistant treasurer who refuses to take vacations.
  2. Independent reconciliations of subsidiary to general ledgers that are not always completed on a timely basis.
  3. A condition of excess manufacturing waste material.
  4. A manager who is often over budget at the end of a reporting period.

Answer(s): A






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