Certified Internal Auditor (CIA) Practice Test

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Study for the Certified Internal Auditor Test. Ace the exam with our robust set of flashcards and multiple choice questions. Each question includes hints and explanations. Prepare effectively for your CIA exam!

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Which method would be least effective in assessing the adequacy of current fixed asset records?

Regular reconciliation of asset records.
Comparison with purchase history.
Analysis of depreciation schedules.
Random sampling of invoices.

The correct answer is: Random sampling of invoices.

The least effective method in assessing the adequacy of current fixed asset records is random sampling of invoices. This approach focuses on selecting a few invoices at random to review, which can provide limited insight into the overall accuracy and completeness of fixed asset records. Invoices may not cover all relevant aspects of the fixed assets, such as their classification, depreciation, or changes in status over time. On the other hand, regular reconciliation of asset records involves systematically ensuring that the asset records match the physical assets and accounting records, providing a thorough verification process. Comparison with purchase history allows for validating that the recorded assets correspond with actual purchases, giving insight into completeness and accuracy. Analyzing depreciation schedules can help in understanding whether fixed assets are being accurately represented in financial records over time. In contrast, the random sampling method lacks breadth and can miss systemic issues or discrepancies that might be present in the overall asset records. Hence, it would not be as effective as the other methods in providing a comprehensive assessment of fixed asset adequacy.