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IIA-CIA-Part2 certification is an important credential for internal auditors who want to advance their careers and demonstrate their commitment to the profession. It is recognized globally as a mark of excellence in the field of internal auditing and is highly valued by employers. Practice of Internal Auditing certification provides internal auditors with the knowledge and skills they need to be effective in their roles and to contribute to the success of their organizations.
NEW QUESTION # 198
While performing a follow-up of a concern about equipment-inventory tracking, which course of action is not necessary for the auditor to take?
- A. Ensure that the inherent risk has been eliminated as a result of resolving the issue.
- B. Ensure that the entity has begun to experience benefits as a result of resolving the issue.
- C. Ensure that the steps being taken resolve the condition disclosed by the initial finding.
- D. Ensure that controls have been implemented to prevent the issue from occurring again.
Answer: A
NEW QUESTION # 199
Monetary-unit sampling is most useful when the internal auditor:
- A. Expects to find several material errors in the sample.
- B. Is concerned with overstatements.
- C. Cannot cumulatively arrange the population items.
- D. Is testing the accounts payable balance.
Answer: B
NEW QUESTION # 200
Which of the following is true regarding the monitoring of internal audit activities?
- A. The board of directors is responsible for the establishment of monitoring polities
- B. The form and content of monitoring policies could vary by industry
- C. Both large and small audit departments must have written policies on monitoring.
- D. The chief audit executive must develop all monitoring policies related to the activity
Answer: B
NEW QUESTION # 201
An internal auditor notes that employees continue to violate segregation-of-duty controls in several areas of the finance department, despite previous audit recommendations. Which of the following recommendations is the most appropriate to address this concern?
- A. Recommend appropriate awareness training for all finance department staff.
- B. Recommend that management address these concerns immediately.
- C. Recommend rotating finance staff in this area.
- D. Recommend additional segregation-of-duty reviews.
Answer: A
Explanation:
Section: Volume E
NEW QUESTION # 202
An internal auditor is evaluating controls over the purchasing function. The function includes the material control department, the purchasing department, and the receiving department. Which of the following is true regarding the presentation of the process flow among the three departments?
- A. A vertical flowchart of each department, showing inputs at the top and outputs at the bottom, would be most useful.
- B. Flowcharts are not useful for documenting process flow.
- C. Both a flowchart and narratives are needed due to the number of departments involved.
- D. A horizontal flowchart, with the departments described across the top and the process flowing horizontally, would be most useful.
Answer: D
NEW QUESTION # 203
While reviewing the draft report of an audit engagement, the chief audit executive (CAE) is not in agreement with management's acceptance of the potential risk exposure resulting from an observed key control weakness.
Which of the following actions by the CAE would be appropriate for addressing this concern?
* Meet with the auditor-in-charge.
* Discuss with senior management.
* Monitor the result of the accepted risk.
* Report the matter to the board.
- A. 2, 3, and 4 only
- B. 1, 3, and 4 only
- C. 1, 2, and 3 only
- D. 1, 2, and 4 only
Answer: D
NEW QUESTION # 204
Which of the following is a detective control for managing the risk of fraud?
- A. Verification of currency exchange rates.
- B. Receipts for employee expenses.
- C. Contractor non-disclosure agreements.
- D. Awareness of prior incidents of fraud.
Answer: A
Explanation:
Section: Volume E
NEW QUESTION # 205
During the development of a purchasing system, an auditor reviewed the payment authorization program.
Which of the following actions should the auditor recommend for a situation in which the quantity invoiced is greater than the quantity received?
- A. Pay the amount billed and adjust the inventory account for the difference.
- B. Return the invoice to the vendor for correction.
- C. Issue an exception report.
- D. Authorize payment of the full invoice, but maintain an open purchase order record for the missing goods.
Answer: C
NEW QUESTION # 206
To effectively communicate the acceptance of risk in an organization a chief audit executive must first consider which of the following?
- A. The organization's view on risk tolerance
- B. The organization's major control activities
- C. The organization's principal risk events.
- D. The organization's risk response strategies
Answer: A
NEW QUESTION # 207
During an interview with a manager in a company's claims department, an auditor noted that the manager became nervous and changed the subject whenever the auditor raised questions about certain types of claims.
The manager's answers were consistent with company policies and procedures. When documenting the interview, the auditor should:
- A. Document the manager's answers, noting the nature of the nonverbal communication.
- B. Conclude that the nonverbal communication is persuasive and that sufficient evidence exists to begin a fraud investigation.
- C. Document the manager's answers but not the nonverbal communication because it is subjective and is not corroborated.
- D. Disregard the interview entirely because the verbal and nonverbal communications were contradictory.
Answer: A
Explanation:
Section: Volume A
NEW QUESTION # 208
Recommendations should be included in the audit report in order to:
- A. Ensure that audit findings are addressed by management.
- B. Ensure that audit findings are resolved in the manner suggested by the auditor.
- C. Minimize the amount of time required to correct audit findings.
- D. Provide management with options for addressing audit findings.
Answer: D
Explanation:
Section: Volume B
NEW QUESTION # 209
During the quarterly review of the internal audit activity's performance, the chief audit executive (CAE) notes that actual engagement hours consistently exceed the budget. Which of the following strategies would most likely help the CAE address this problem?
----
The budget should consider time spent on similar engagements.
The budget should consider the proficiency of the assigned auditors.
The budget estimate should provide for unexpected delays.
The budget should be specific as to time for each work assignment.
- A. 3 and 4 only.
- B. 2 and 3 only.
- C. 1 and 2 only.
- D. 1 and 4 only.
Answer: D
Explanation:
Topic 5, Volume E
NEW QUESTION # 210
Which of the following would be an appropriate and effective control self-assessment approach in an organization with an authoritative culture?
I. Facilitated meeting
II. Survey
III.
Management-produced analysis
- A. II and III only
- B. I and III only
- C. I only
- D. I, II, and III
Answer: A
NEW QUESTION # 211
An IT auditor is reviewing the access controls in an organization's accounting application. The auditor intends to deploy a tool that can help test the logical controls embedded in the system to ensure employee access is granted according to need. Which of the following would help achieve this objective?
- A. Audit expert systems.
- B. Utility software
- C. integrated test facility
- D. Generalized audit software
Answer: D
NEW QUESTION # 212
An auditor plans to analyze customer satisfaction, includinG.(1) customer complaints recorded by the customer service department during the last three months; (2)
merchandise returned in the last three months; and (3) responses to a survey of customers who made purchases in the last three months. Which of the following statements regarding this audit approach is correct?
- A. The survey would not consider customers who did not make purchases in the last three months.
- B. Steps 1 and 2 of the analysis are not necessary or cost-effective if the customer survey is comprehensive.
- C. Analysis of three months' activity would not evaluate customer satisfaction.
- D. Although useful, such an analysis does not address any risk factors.
Answer: A
NEW QUESTION # 213
The most common motivation for management fraud is the existence of:
- A. Vices, such as a gambling habit.
- B. Job dissatisfaction.
- C. The challenge of committing the perfect crime.
- D. Financial pressures on the organization.
Answer: D
NEW QUESTION # 214
An internal auditor submitted a report containing recommendations for management to enhance internal controls related to investments. To follow up, which of the following is the most appropriate action for the internal auditor to take?
- A. Follow up during the next scheduled audit.
- B. Observe corrective measures.
- C. Seek a management assurance declaration.
- D. Conduct appropriate testing to verify management responses.
Answer: D
Explanation:
Section: Volume E
NEW QUESTION # 215
According to IIA guidance, which of the following are the most important objectives for helping to ensure the appropriate completion of an engagement?
1. Coordinate audit team members to ensure the efficient execution of all engagement procedures.
2. Confirm engagement workpapers properly support the observations, recommendations, and conclusions.
3. Provide structured learning opportunities for engagement auditors when possible.
4. Ensure engagement objectives are reviewed for satisfactory achievement and are documented properly.
- A. 2, 3, and 4
- B. 1, 2, and 4
- C. 1, 2, and 3
- D. 1, 3, and 4
Answer: B
Explanation:
Section: Volume E
NEW QUESTION # 216
An internal auditor is planning an assurance engagement. The auditor first reviews the department's business objectives. What is the next step?
- A. Evaluate potential risks.
- B. Set the scope of the engagement.
- C. Review control activities.
- D. Establish risk management roles.
Answer: A
NEW QUESTION # 217
Which of the following is not a primary reason for outsourcing a portion of the internal audit activity?
- A. To provide the organization with appropriate contingency planning for the internal audit function.
- B. To complement existing expertise with a required skill and competency for a particular audit engagement.
- C. To gain access to a wider variety of skills, competencies and best practices.
- D. To focus on and strengthen core audit competencies.
Answer: A
NEW QUESTION # 218
According to IIA guidance, which of the following should be considered when creating policies and procedures for the internal audit activity (IAA)?
- A. Number of auditors, complexity of audit activities, and structure of the IA
- B. Number of auditors, complexity of audit activities, and audit staff skills and competencies.
- C. Number of auditors, structure of the IAA, and audit staff skills and competencies.
- D. Complexity of audit activities, structure of the IAA, and audit staff skills and competencies.
Answer: A
NEW QUESTION # 219
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