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Question 108

An organization buys crude oil on the open market and refines it into a high-quality gasoline. The price of crude oil is extremely volatile. Which of the following is the most appropriate risk management technique to protect the organization against these price fluctuations?

Options:

A.

Enter into long-term gasoline purchase agreements with end customers.

B.

Trade crude oil derivatives at financial markets in order to benefit from price fluctuations

C.

Purchase crude oil-related derivatives such as futures or options

D.

Stock as much raw materials as possible and consider Investing into additional facilities

Question 109

A senior IT auditor is performing an audit of inventory valuation. The auditor misinterprets the sampling results. Which of the following best describes this situation?

Options:

A.

Sampling risk.

B.

Control risk.

C.

Nonsampling risk.

D.

Residual risk.

Question 110

An engagement supervisor reviewed a staff internal auditor's documentation and noted that several edits should be made. The internal audit activity uses an electronic workpaper database and does not maintain paper files for its system of record. A system error prevents the engagement supervisor from adding her electronic signature to any workpaper in the database Given this situation which is the most appropriate response to provide evidence of supervisory review?

Options:

A.

The engagement supervisor should print sign and date each workpaper after the review is complete and scan the document into the database as evidence of review

B.

Because the engagement supervisor called the help desk to correct the IT problem, he should upload the support-request ticket from the help desk to serve as evidence of the review

C.

The engagement supervisor should ask another manager-level internal auditor not associated with the project to sign the workpaper on his behalf

D.

The engagement supervisor should instruct the staff internal auditor to add a note in the workpaper on his behalf indicating that the workpaper was reviewed and feedback was provided

Question 111

In order to obtain background information on an assigned audit of data center operations an internal auditor administers control questionnaires to select individuals who have primary responsibilities within the process. Which of the following is a drawback of this approach?

Options:

A.

It will be difficult to quantify the information obtained through this approach

B.

This approach does not help the auditor learn about the existence of controls

C.

It takes the auditor a long time to assess the relevant controls using this approach

D.

Information on control functionality is limited

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Exam Code: IIA-CIA-Part2
Exam Name: Practice of Internal Auditing
Last Update: Dec 22, 2024
Questions: 482
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