IIA Exam IIA-CHAL-QISA Topic 3 Question 8 Discussion

Actual exam question for IIA's IIA-CHAL-QISA exam

Question #: 8
Topic #: 3

An internal auditor is asked to determine why the production line for a large manufacturing organization has been experiencing shutdowns due to unavailable parts The auditor learns that production data used for generating automatic purchases via electronic interchange is collected on personal computers connected by a local area network (LAN) Purchases are made from authorized vendors based on both the production plans for the next month and an authorized materials requirements plan (MRP) that identifies the parts needed per unit of production. The auditor suspects the shutdowns are occurring because purchasing requirements have not been updated for changes in production techniques. Which of the following audit procedures should be used to test the auditor's theory?

ACompare purchase orders generated from test data Input into the LAN with purchase orders generated from production data for the most recent period.

BDevelop a report of excess inventory and compare the inventory with current production volume.

CCompare the parts needed based on current production estimates and the MRP for the revised production techniques with the purchase orders generated from the system for the same period

DSelect a sample of production estimates and MRPs for several periods and trace them into the system to determine that input is accurate

Show Suggested Answer

Suggested Answer: D

Testing Valuation: The valuation of trading securities requires comparing their carrying value with current market prices to ensure accuracy.

Market Quotations: Current market quotations provide the most reliable and up-to-date information on the fair value of securities.

Accounting Standards: This approach is consistent with accounting standards that require securities to be reported at fair value, reflecting any unrealized gains or losses.

Verification Process: Comparing the carrying value with market quotations helps verify that the securities are appropriately valued on the financial statements.

International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP) regarding fair value measurement.

by Rueben at Jul 17, 2024, 11:48 AM

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Precious

2 months ago

Is there an option to just walk up to the production line, yell 'Hey, where are the parts?', and call it a day? Might be quicker than all this auditing business.

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Han

2 months ago

Option B? Really? Checking for excess inventory when the issue is about unavailable parts? That's like trying to put out a fire with gasoline.

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Trinidad

1 months ago

D) Select a sample of production estimates and MRPs for several periods and trace them into the system to determine that input is accurate

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Maricela

2 months ago

C) Compare the parts needed based on current production estimates and the MRP for the revised production techniques with the purchase orders generated from the system for the same period

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Janae

2 months ago

A) Compare purchase orders generated from test data Input into the LAN with purchase orders generated from production data for the most recent period.

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Suzi

2 months ago

I'm leaning towards option A. Comparing the test data inputs against the actual purchase orders could shed some light on where the system is going wrong.

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Antione

1 months ago

It's important to ensure that the system is accurately reflecting the production needs. Option A could definitely help in pinpointing any discrepancies.

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Irving

1 months ago

That's a good point. We should also compare the parts needed based on current estimates with the purchase orders to see if there are any mismatches.

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Effie

1 months ago

But wouldn't it also be helpful to check for excess inventory compared to current production volume?

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Kate

1 months ago

I agree, comparing the test data with actual purchase orders seems like a good way to find discrepancies.

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Felicitas

2 months ago

I agree, comparing the purchase orders generated from test data with the production data could reveal if there are any issues with updating purchasing requirements.

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Ula

2 months ago

Option A seems like a good choice. It would help identify any discrepancies between the test data and actual purchase orders.

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Ling

3 months ago

Option D seems like a good place to start. Tracing the production estimates and MRPs into the system would help us understand if the underlying data is accurate.

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Kayleigh

30 days ago

User 4: Tracing the production estimates and MRPs will give us a better understanding of the situation.

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Joanne

1 months ago

User 3: We should definitely make sure the data going into the system is correct.

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Rickie

2 months ago

User 2: That sounds like a good idea. It will help us determine if the input is accurate.

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Davida

3 months ago

User 1: Let's start by tracing the production estimates and MRPs into the system.

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Hobert

3 months ago

I think option C is the way to go. Comparing the parts needed based on the new production techniques with the actual purchase orders would help identify the disconnect that's causing the shutdowns.

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