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INTERNATIONAL PROFESSIONAL FINANCIAL CAREERS ACADEMY PVT LTD

MOCK TEST RESULT ANALYSYS

PART 1 CMA: INTERNAL CONTROL, SYSTEM CONTROL AND INT AUDIT
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Student name: RASHMI MAN

Level A : Easy
LEvel B : Moderate
LEvel C : Tough
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Questions # 1
Which component is the foundation of COSO framework?

A. Monitoring
b. Control activities
c. Control environment
d. Information and communication

You have answered : B

This is a Level A question

WRONG The COSO framework established the cntrol environment as its

foundation.
No of correct respondees to this question : 34 out of 66

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Questions # 2
Which would improve the control of cash?

a. The cashier reconciles bank account monthly

b. Checks are restrictively endorsed at the time of receipt
c. The person who authorizes checks also signs the checks
d. The cashier records cash receipts in customers' account
You have answered : A
This is a Level C question
WRONG A restrictive endorsement limits what may be done with the check. In
this case it is limited to being deposited only. This would improve
the control of cash because it limits the opportunity for the check to
be cashed for cash and money stolen.
No of correct respondees to this question : 26 out of 66
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Questions # 3
The internal audit activity of a large corporation has established its
operating plan and budget for the coming year. The operating plan is
restricted to the following categories: a priritized listing of all
engagements, staffing, a detailed expense budget, and the
commencement date of each engagement. Which of the following best
describes the major deficiency of this operating plan?

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a. Requests by management for special projects are not considered
b. Opportunities to achieve operating benefits are ignored
c. Measurability creteria and targeted dates of completion are not
provided
d. Knowledge, skill and disciplines required to perform work are
ignored
You have answered : C
This is a Level C question

CORRECT The goals of the internal audit activity, as stated in specific

operating plans and budgets, should include measurement criteria and
targeted dates of accomplishment.
No of correct respondees to this question : 42 out of 66

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Questions # 4
Which of the following best describes an internal auditor's purpose in
reviewing the organization's existing risk management, control and
governance process?

a. To help determine the nature, timing and extent of tests necessary

to achieve engagement objectives

b. To ensure that weakness in the internal control system are

corrected

c. To provide reasonable assurance that the processes will enable the

organization's objectives and goals to be met efficiently and
economically

d. To determine whether the processes ensure that the accounting

records are correct and that the financial statements are fairly
stated
You have answered : B
This is a Level A question
WRONG In a sense by definition, this is the purpose of reviewing the
organization's existing risk management, control, and governance
processes.

No of correct respondees to this question : 32 out of 66

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Questions # 5
The control that would most likely ensure that payroll checks are
written only for authorized amounts is to:

a. Conduct periodic floor verification of employees on the payroll

b. Require the return of undelivered checks to the cashier
c. Require supervisory approval of employee time cards
d. Periodically witness the distribution of payroll checks

You have answered : C

This is a Level B question

CORRECT The employee's supervisor would be in the best position to ensure

payment of the proper amount.
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No of correct respondees to this question : 41 out of 66

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Questions # 6
An auditor, experienced in air-quality issues, discovered a
significant lack of knowledge about legal requirements for controlling
air emissions while interviewing the manager of the environment,
health and safety (EHS) department. The auditor should

a. Alter the scope of the engagement to focus on activities associated

with air emissions
b. Share extensive personal knowledge with the EHS manager
c. Take note of the weakness and direct additional questions to
determine the potential weakness of lack of knowledge
d. Report potential violations in this area to the appropriate
regulatory authority

You have answered : C

This is a Level C question

CORRECT The auditor should ensure that the fieldwork is designed to identify
potential instances of noncompliance and, in the closing conference,
should recommend additional training for the EHS manager.
No of correct respondees to this question : 29 out of 66

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Questions # 7
As a means of controlling projects and avoiding time budget overruns,
decisions to revise time budget for an audit engagement should
normally be made:

a. Immediately after completing the preliminary survey

b. When a significant deficiency has been substantiated
c. When inexperienced audit staff members are assigned to an
engagement
d. Immediately after expanding tests to establish reliability of
observations

You have answered : A

This is a Level B question

CORRECT Time budgets should be appraised for revision after the preliminary
survey and preparation of the engagement program.
No of correct respondees to this question : 28 out of 66
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Questions # 8
Which of the one best describes an auditor's responsibility after
noting some indicators of fraud?

a. Expand activities to determine whether an investigation is

warranted.
b. Report the possibility of fraud to the senior management and ask
how to proceed.
c. Consult the external legal counsel to determine the course of
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action to be taken.
d. Report the matter to the audit committee and request funding for
outside specialists to help investigate the possible fraud.

You have answered : B

This is a Level B question
WRONG The auditor should first expand work to determine the existence of
fraud before reporting the matter to senior management. At this point,
the auditor only has suspicions of fraud. More work should be
performed before consulting with management, external legal counsel,
or audit committee.
No of correct respondees to this question : 23 out of 66

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Questions # 9
During a review of the purchasing operations, an auditor found that
procedures in use did not agree with the stated company procedured.
However, audit tests revealed that the procedures in use represented
an increase in efficiency and a decrease in processing time without a
discerible decrease in control. The auditor should:

a. Report the lack of adherence to the documented procedures as an

operational deficiency
b. Develop a flowchart of the new procedure and include it in the
report to management
c. Report the change and suggest that the change in procedures be
documented
d. Suspend the completion of the engagement until the engagement
client documents the new procedures

You have answered : C

This is a Level B question

CORRECT This represents a change in process that should be brought to the

attention of management and documented.

No of correct respondees to this question : 34 out of 66

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Questions # 10
A hospital is evaluating the purchase of software to integrate a new
cost accounting with its existing financial accounting system. Which
of the following describes the most effective way for the internal
audit activity be involved in the procurement process?

a. The internal audit activity evaluates whether performance

specifications are consistent with the hospital's needs

b. The internal audit activity evaluates whether the application

design meets internal development and documentation standards

c. The internal audit activity determines whether the prototyped model

is validated and reviewed with use begins
d. The internal audit activity has no involvement as the system has
already been developed externally

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You have answered : A
This is a Level C question

CORRECT The internal audit activity should be involved to ensure the exitence
of performance specifications consistent with the hospital's needs
because incomplete or erroneous specifications may result in the
acquisition of unusuable software or enenforceable contact terms with
the software vendor.

No of correct respondees to this question : 26 out of 66

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Questions # 11
Which of the following best describes the internal audit functions
responsibility for follow-up activities related to a previous
engagement?

a. Internal auditors should determine if corrective actions have been

taken and is achieving the desired results or if management has
assumed the risk of not taking the corrective actions
b. Internal auditors should determine if management has initiated
corrective actions, but they have no responsibility to determine if
the action is achieving the desired results. That determination is
management's responsibility.

c. The chief audit executive is responsible for scheduling follow-up

activities only if directed to do so by senior management or audit
committee. Otherwise, follow-up is entirely descretionary

d. None of the above

You have answered : A
This is a Level B question

CORRECT Statement 'A' is correct

No of correct respondees to this question : 34 out of 66

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Questions # 12
Which of the following would indicate that fraud may be taking place
in marketing department?

a. There is no documentation for fairly large expenditures to a new

vendor
b. A manager appears to be living a lifestyle highly disproportionate
to his salary
c. The control environment can be described as 'very loose'. However,
this attitude is justified by management on grounds that it is needed
for creativity.
d. All of the above

You have answered : D

This is a Level C question

CORRECT Unsupported transactions, lavish lifestyles, and weak control

environment are all fraud symptoms that should heighten the auditor's
awareness of potential fraud.
No of correct respondees to this question : 37 out of 66
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Questions # 13
The primary responsibility of maintaining a system of internal control
rests with the company's

a. Lawyers
b. Management
c. Accountants
d. Internal auditors

You have answered : B

This is a Level A question

CORRECT Though every member of the organization has a role in functioning of

internal controls, primary responsibility for the maintenance of the
internal control system restys with the management.
No of correct respondees to this question : 46 out of 66
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Questions # 14
Which of the following is not a preventive control?

a. The general ledger master file is locked in a safe each night

b. All bills are marked 'paid' to prevent duplicate payment
c. The account receivable subsidiary ledger is reconciled against the
general ledger account receivable control total
d. Customer numbers are verified by the computer before a sale order
is accepted to ensure the sale order is from an established company.

You have answered : B

This is a Level C question
WRONG A preventive control is one that prevents the error from occurring in
the first place. The reonciliation will only provide evidence that an
error has occured.

No of correct respondees to this question : 28 out of 66

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Questions # 15
Seperation or Segregation of duties will provide reasonable protection
against all of the followings except:

a. Unintentional errors of an individuals

b. Intentional errors of an individual
c. Failure to post an entry to the general ledger
d. Collusion

You have answered : D

This is a Level B question

CORRECT Collusion occurs when two or more people work together to get around
the control system in place. In this case even the separation of
duties will not provide resonable protection from wrongdoings.

No of correct respondees to this question : 34 out of 66

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Questions # 16
The most important fundamental concept behind a company's internal
control system is:

a. The individual employees operate the internal controls and are

responsible for their implementations

b. The reliability of the annual report and other financial reporting

c. Effectiveness and efficiency of operation
d. Compliance with the relevant and applicable laws and regulations

You have answered : C

This is a Level A question
CORRECT The effectiveness and efficiency of operations is the fundamental
concept behind internal controls. Compliance with laws and regulations
and the reliability of external reporting are important goals of
internal controls, but not the underlying concept.
No of correct respondees to this question : 24 out of 66

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Questions # 17
A limitation of scope in the audit can be addressed by

a. Moving audit procedures to prior to the end-year or earlier in the

period to be tested
b. Obtaining more internal evidence and less external evidence
c. Selecting larger audit samples for audit tests
d. Selecting smaller audit samples for audit tests
You have answered : C
This is a Level A question
CORRECT A scope limitation occurs when the auditor is unable to test something
that they would like to test. If this occurs, one of the ways it may
be addressed by the auditor is to increase the sample size of other
documements or items to be tested.
No of correct respondees to this question : 21 out of 66

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Questions # 18
Which of the following is a general control activity that is used by
companies and can be observed by the auditors?

a. Segregation of duties
b. Management philosophy and style of operation
c. open and direct lines of communication to the audit committe and
board of directors
d. external influences such as govenrnmental oversights or outside
audits
You have answered : A
This is a Level A question

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CORRECT Segregation of duties is a general control activity and it is
something that is able to be viewed by the auditor. The other choices
are all relevant to internal controlsm but are not able to be viewed
by the auditor.
No of correct respondees to this question : 53 out of 66
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Questions # 19
A control activity is:
a. An action taken by an auditor to obtain evidence
b. An activity undertaken by the client to prevent, detect and correct
errors and frauds in transactions
c. A method of recording, summerizing and reporting financial
information
d. The support that board of directors provide to the audit committee
You have answered : B
This is a Level A question
CORRECT By definition, a control activity is activity undertaken by the client
staff to prevent, detect and correct errors and frauds in
transactions.

No of correct respondees to this question : 39 out of 66

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Questions # 20
The control objectives that reduces the probability of a fictitous
transaction being recorded in the accounting records is:
a. Completeness
b. Authorization
c. Proper period
d. Validity
You have answered : B
This is a Level A question
WRONG Validity means that all the events that are recorded in the financial
statements actually occured. This would reduce the probability of a
fictitious (non-existent) transaction from being recorded.

No of correct respondees to this question : 13 out of 66

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Questions # 21
The control objective that reduces the probability of a credit sale
being recorded as a cash sale instead of a receivable is:

a. Validity
b. Classification
c. Accuracy
d. Completeness

You have answered :

This is a Level A question

U Hv not Answered this Classification is the control that relates to an item being
reported
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in the correct area of the financial statements.
No of correct respondees to this question : 32 out of 66
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Questions # 22
When planning an audit, the auditor's prior knowledge, understanding
and experience of the client's internal control system may be used to

a. Assess the efficiency of the operations of the internal controls

for the period being audited
b. Find evidence of collusion or other frauds by the management
c. Identify the possible errors or frauds that could occur in the
business
d. Prepare the working papers supporting the level of control risk
assessed by the auditor
You have answered : C
This is a Level B question
CORRECT The prior experience and knowledge can only be used to guide the
auditor during the work of the current audit. It can only be used to
identify potential problem areas.

No of correct respondees to this question : 26 out of 66

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Questions # 23
Totals of amounts in computer recorded data that are not usually added
together for acounting purposes but are used for data processing
control purposes are called

a. Record total
b. Hash total
c. Processing data total
d. Field total

You have answered :

This is a Level A question

U Hv not Answered this A Hash total is the sum of the amounts that has no
accounting purpose.
For example, the account numbers of customers may be added
together
and compared to the entry data to ensure that the
transactions
processed include all entered transactions
No of correct respondees to this question : 29 out of 66
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Questions # 24
Which of the following descriptions are the best description of a
validity check transaction processing control?

a. The client's computer is programmed to detect if the monetary

amount of a transaction exceeds a preset limit
b. The system prints the list of errors that were identified and
subsequently corrected
c. The computer automatically prints a record listing all instanes of
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an account number not matching an account in the master file
d. The computer resends information back to the data entry terminal to
compare what the computer will process with what was input as the
terminal
You have answered : D
This is a Level A question
WRONG A validity check determines that the amount is within a specific range
or that it includes a reasonable number. If the amount entered is
outside of the preset range, that would be a validity check.
No of correct respondees to this question : 18 out of 66
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Questions # 25
Which of the following is not true about a Trojan horse?
a. A Trojan horse replicates like a virus
b. A Trojan horse appears to be something desirable
c. A Trojan horse contains malicious code
d. A Trojan horse can indave a computer only if it is invited

You have answered : A

This is a Level A question

CORRECT A Trojan horse does not replicate itself, whereas a virus does
replicate itself. This is a very important distinction between a
trojan horse and a virus.

No of correct respondees to this question : 23 out of 66

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Questions # 26
An auditor made the following observations in a system audit

I. System Analyst's job responsibilities are rotated regularly with

programmer's duties
II. Programmers do not have access to the computers that are used for
processing data
III. Each batch of input data are required to be accompanied by a
signed authorization form
IV. The data control group reconciles the input and output and follow
up on errors

Which of the above observations represent(s) a control weakness?

a. I
b. I and III
c. II and III
d. I and IV

You have answered : A

This is a Level C question

WRONG System analysts should not have programming responsibilities, and

programmers should not have system analysis responsibilities.
Therefore, system analyst's job responsibilities should not be rotated
with programmers' responsibilities. Furthermore, the signature on the
data input authorization form should be verified by the data control
group before the input is given to the computer operator, not by the
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computer operator. Otherwise, a computer operator might be able to
process a salary increase for himself or herself.

No of correct respondees to this question : 11 out of 66

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***********************************YOUR SCORE
REPORT********************************************

Correct Answer : 16
Incorect answer : 8
Unanswered : 2
Percentage correct : 62
Status: Sorry! you have failed to receive a passing score
************************** Our understanding of the
student**********************************
Dear RASHMI MAN
You have answered 50 percentage of Level A questions
and hence your basic understanding of the concepts needs improvement. Less than 85%

proficiency in this area is not acceptable. You need to view the class Videoes more
often and study the IMA textbooks followed by fast rehersal of the Participant
Guide
and the IPFC classnotes.

I further see that your sore is below 50% in this area. You need to double your
commitment, time and you can not afford to miss any class. You need more attention
and counselling from me. Your focus as a CMA student has sill not come for the exam.

YOu have correctly answered 86 %age of Level B

questions and hence, you are doing well with Level B questions. A score below 75% in

level B can be risky if you do not perform well in Level C and Esay areas

YOu have correctly answered 57 %age of Level C

questions and hence you are NOT doing well with Level C questions. A score below 70%
in
level C can be risky if you do not perform well in Essay area.
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This Exam Rank : 11/66
Percentage correct : 62
Percentile position : 83
Last Exam Rank : NOT Applicable
Last Exam %correct : NOT Applicable
Last Exam Percentile: NOT Applicable
FIRST 5 Results
----------------
Name Rank Correct Percentile Percentage
--------------------------------------------------
Manoj Chal 1 23 98.5 88.5
Domini 2 23 97.0 88.5
Laxman 3 23 95.5 88.5
Ananta Muk 4 22 93.9 84.6
Namrata Ga 5 19 92.4 73.1
Last 3 results
64 5 3.0 19.2
65 4 1.5 15.4
66 2 0.0 7.7
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Area-wise strength-weakness report
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Area No of Questions Correct Wrong %age correct
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Int Aud 9 8 1 89
Intl Control 7 5 2 71
COSO Frmwrk 1 0 1 0
General Control 6 2 4 33
System Control 3 1 2 33
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********************************** BE WATCHFUL ABOUT UNANSWERED QUESTIONS
***********
You must answer all question by prudent guessing. Wrong answer has no -ve marking.
Your score would have at least improved by 1 had you
answered all unanswered questions with a common guess, say C
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**

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