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Exam Name: Certified Internal Auditor - Part 3, Business Analysis and Information Technology
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Exam Name: Certified Internal Auditor - Part 2, Conducting the Internal Audit Engagement
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NO.1 Which of the following is not required by ISO 9000 standards?
A. Consistent high quality products.
B. Onsite inspections by a registrar.
C. Creation of an internal audit system.
D. Establishment of a quality management system.
Answer: A
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Explanation:
ISO 9000 is a set of generic standards for establishing and maintaining a quality system within an
entity. The standards provide no basis forjudging the quality of the end product. The marketplace
makes this determination. The objective of ISO 9000 standards is to ensure consistent quality.
NO.2 A company with many branch stores has decided to use its best-performing store as a
benchmark organization for the purpose of analyzing the accuracy and reliability of branch store
financial reporting.
Which one of the following is the most likely measure to be included in a financial benchmark?
A. High amount of bad debt write-offs.
B. High turnover of employees.
C. High number of suppliers.
D. High level of employee participation in setting budgets.
Answer: A
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Explanation:
Internal benchmarking is the application of best practices in one part of the organization (e.g., a
high-performing branch store) to its other parts (other branches). This process requires, among
other things, use of quantitative and qualitative measures. A key indicator for financial performance
measurement is the amount of bad debt write-offs. A high level of bad debt write-offs could
indicate fraud, which would compromise the accuracy and reliability of financial reports. Bad debt
write-offs may result from recording fictitious sales.
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