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Exam IIA-CIA-Part2 topic 3 question 43 discussion

Actual exam question from IIA's IIA-CIA-Part2
Question #: 43
Topic #: 3
[All IIA-CIA-Part2 Questions]

A major insurance company provides a discount on automobile insurance if the vehicle meets certain safety criteria. Which of the following audit tests would provide an internal auditor with the best evidence that all qualifying insured automobiles are receiving the discount?

  • A. Compare the percentage of automobiles receiving discounts this year to that of last year.
  • B. Ask managers whether they are aware of the discount criteria and whether they are providing the discount to all qualifying automobiles.
  • C. Select a sample of automobiles that are not receiving the discount and determine if they have been properly excluded.
  • D. Select a sample of automobiles receiving the discount and determine that the required discount criteria are being met.
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Suggested Answer: C 🗳️

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nitaa
4 months ago
I think D is the correct answer
upvoted 2 times
Prossyn
1 month, 3 weeks ago
The objective is to assess that "qualifying insured automobiles are receiving the discount" not "the correct criteria is followed when applying the discount", one has to therefore select a sample of those that did not receive the discount to confirm that these actually did not qualify for one
upvoted 4 times
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