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Exam IIA-CIA-Part1 All Questions

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Exam IIA-CIA-Part1 topic 5 question 4 discussion

Actual exam question from IIA's IIA-CIA-Part1
Question #: 4
Topic #: 5
[All IIA-CIA-Part1 Questions]

An internal auditor for a large retail chain suspects that a store manager has been stealing money from cash sales by listing the sales as accounts receivable and then writing off the accounts as bad debts. Which of the following irregularities is the most likely cause of the auditor's suspicion?

  • A. A much higher bad debt expense as a percentage of sales than that of previous years.
  • B. A much higher bad debt expense as a percentage of sales than that of other stores.
  • C. A much higher percentage of past-due accounts receivable than that of other stores.
  • D. A much higher percentage of past-due accounts receivable than that of previous years.
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Suggested Answer: B 🗳️
by chachae at Aug. 13, 2021, 11:17 a.m.

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chachae
11 months, 1 week ago
Why not A?
upvoted 1 times
John1237
1 month, 2 weeks ago
Because he is an internal auditor for a large retail chain. He can therefore evaluate the trends that deviate during the different seasons.
upvoted 1 times
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