Improve Your Knowledge with IIA-CIA-Part2 Exam Dumps

1. As part of internal audit's assistance with an annual external audit, the internal auditors are required to do a preliminary analytical review of an bank account balances. This involves verifying the current year end balances as web as comparing the current year end balances with previous year end balances to highlight significant changes.

Which of the following is the most reliable source for verification of the current year end bank balances?

2. To compete in the global market, an organization is restructuring and consolidating many of its divisions. Prior to the consolidation, senior management requested assistance from tie internal audit activity.

Which of the following consulting services would be most appropriate in this situation?

3. The audit plan is aligned with the organization's goals.

4. In which of the following ways can the internal audit activity new engagement opportunities?

5. Which of the following should be the focus of the effect section of the preliminary observations document?

6. An internal auditor observes a double payment transaction on a supplier invoice during an accounts payable engagement.

Which of the following steps would be the most effective in helping the auditor determine whether fraud exists?

7. An internal auditor is asked to determine why the production line for a large manufacturing organization has been experiencing shutdowns due to unavailable pacts The auditor learns that production data used for generating automatic purchases via electronic interchange is collected on personal computers connected by a local area network (LAN) Purchases are made from authorized vendors based on both the production plans for the next month and an authorized materials requirements plan (MRP) that identifies the parts needed per unit of production The auditor suspects the shutdowns are occurring because purchasing requirements have not been updated for changes in production techniques.

Which of the following audit procedures should be used to test the auditor's theory?

8. According to HA guidance, which of the following statements regarding audit workpapers is true?

9. Acceding to MA guidance, when of the Mowing strategies would like provide the most assurance to the chief audit executive (CAE) that the internal audit activity's recommendations are being acted upon?

10. In a health care organization the internal audit activity provides overall assurance on governance, risk and control. The chief audit executive advises and influences senior management, and the audit strategy leverages the organization's management of risk According to HA guidance which of the following stages of internal audit maturity best describes this organization?

11. Which of the following would be the most helpful to a chief audit executive when developing a talent management strategy?

12. Provide assurance that the internal audit activity conforms with the IIA Code of Ethics.

13. Which of the following best describes external benchmarking using trend analysis for a subsidiary of an international company?

14. An internal auditor uses a data query tool in the purchasing process to review the vendor master file for authorizations.

Which of the following describes the control objective likely being tested?

15. According to IIA guidance, which of the following reflects a characteristic of sufficient and reliable information?

16. During an assurance engagement, an internal auditor discovered that a sales manager approved numerous sales contracts for values exceeding his authorization limit. The auditor reported the finding to the audit supervisor, noting that the sales manager had additional new contracts under negotiation.

According to IIA guidance, which of the following would be the most appropriate next step?

17. An internal auditor is analyzing sates records and is concerned whether a transaction is recorded in the coned period. The accounting manager explains that the external auditor approved the records and produces an email from the external audit team leader.

How should tie internal auditor respond?

18. A chief audit executive (CAE) following up on action plans from previously completed audits identifies that management has determined that certain action plans are no longer necessary.

If the CAE disagrees with management's decision, which of the following is the most appropriate next step for the CAE to take?

19. An internal auditor has been assigned to facilitate a risk and control self-assessment for the finance group.

Which of the following is the most appropriate role that she should assume when facilitating the workshop?

20. An internal auditor has suspicions that the management of a department splits me number of planned purchases to avoid the approval process required for larger purchases.

Which of the following would be the most efficient technique to help the auditor identify the seventy of this malpractice?

21. A chief audit executive (CAE) determined that management chose to accept a high-level risk that may be unacceptable lo the organization.

Which is the best course of action for the CAE to Follow?

22. An organization has a mature control environment but limited internal audit resources Given this scenario, on which of the following should the internal auditors focus their testing?

23. Which of the following information is most appropriate for the chief audit executive to share when coordinating audit plans with other internal and external assurance providers?

24. According to IIA guidance, which of the following actions might place the independence of the internal audit function in jeopardy?

25. The amount of fuel purchased.

26. An audit identified a number of weaknesses in the configuration of a critical client/server system. Although some of the weaknesses were corrected prior to the issuance of the audit report, correction of the rest will require between 6 and 18 months for completion. Consequently, management has developed a detailed action plan, with anticipated completion dates, for addressing the weaknesses.

What is the most appropriate course of action for the chief audit executive to take?

27. An internal auditor determines that certain information from the engagement results is not appropriate for disclosure to all report recipients because it is privileged.

In this situation, which of the following actions would be most appropriate?

28. Which of the following constitutes supervisory activity undertaken during the planning phase of an assurance engagement?

29. What is the primary purpose of issuing a preliminary communication to management of the area under review?

30. Provide the auditor with instructions and directions to complete the audit.

31. The head of customer service asked the chief audit executive (CAE) whether internal auditors could assist her staff with conducting a risk self-assessment in the customer service department The CAE promised to meet with customer service managers analyze relevant business processes and come up with a proposal.

Who is most likely to be the final approver of the engagement objectives and scope?

32. According to IIA guidance, which of the following individuals should receive the final audit report on a compliance engagement for the organization's cash disbursements process?

33. 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?

34. As part of the preliminary survey, an internal auditor sent an internal control questionnaire to the accounts payable function Based on the questionnaire responses, the auditor determines that there is no established procedure for adding and approving new vendors.

What would the auditor do next?

35. Which of the following statements concerning workpapers is the most accurate?

36. Which of the following is an inherent risk of issuing an opinion on the overall effectiveness of internal control?

37. According to the Standards, which of the following is least important in determining the adequacy of an annual audit plan?

38. Which of the following situations is most critical for the chief audit executive to report to the board?

39. Which of the following should management action plans include at a minimum?

40. The following is a list of major findings in the executive summary report for an audit of the contract management process

- Noncompliance with contract provisions requiring vendors to obtain insurance policies with indemnity value of not less than $1 million

- Compliance with contract obligations and deliverables is not monitored

- No contract agreement with five vendors providing core services

Which of the following is an appropriate conclusion that can be drawn from these findings?

41. The cost of modifying the sales system to include a preventive control is less than

S100.000

42. An internal auditor is planning an engagement at a financial institution. Toe engagement objective is to identify whether loans were granted in accordance with the organization's policies.

When of the following approaches would provide the auditor with the best information?

43. An engagement work program o of greatest value to audit management when which of the following is true?

44. While conducting a review of the logistics department the internal audit team identified a crucial control weakness. The chief audit executive (CAE) decided to prepare an audit memorandum for management of the logistics department followed by an informal meeting.

What is the most likely reason the CAE decided to prepare the audit memorandum?

45. It is close to the fiscal year end for a government agency, and the chief audit executive (CAE) has the following items to submit to either the board or the chief executive officer (CEO) for approval.

According to IIA guidance, which of the following items should be submitted only to the CEO?

46. To which of the following aspects should the chief audit executive give the most consideration while communicating an identified unacceptable risk to management?

47. Which statistical sampling approach would an internal auditor typically utilize if she wishes to test for fraud and the expected deviation rate is very low?

48. A preliminary observation document contains more detail than tie observation description in the engagement workpapers

49. Which of the following statements accurately describes the Standards requirement for ret internal audit records?

50. An internal auditor developed a list of internal and external risk considerations across the organization's processes, developed a scale to assess each risk and allocated the relative importance of each risk. When of the following approaches did the auditor take?

51. Which of the following is the primary purpose of financial statement audit engagements?

52. The chief audit executive of an international organization is planning an audit of the treasury function located at the organization's headquarters. The current internal audit team at headquarters lacks expertise in the area of financial markets which is needed tor the engagement.

When of the following would be the most approbate solution considering the time constraint?

53. For an action plan to be effective, it should be designed primarily to address which of the following elements of an observation?

54. CORRECT TEXT

Which of the following is one of the five basic tnanoal statement assertions when an internal auditor evaluates controls over financial reporting?

55. Which of the following factors would the auditor in charge be least likely to consider when assigning tasks to audit team members for an engagement?

56. Which of the following statements is false regarding roles and responsibilities pertaining to risk management and control?

57. During follow-up. the internal auditor discovered that operational management did not implement effective actions to address a significant control breach If the issue is left unresolved it may result in regulatory sanctions and damage the organization's reputation What is the most appropriate next step for the chief audit executive to lake?

58. Submit management's plan of action to the external auditors for additional review.

59. As a result of server managements assumption of risk there is residual risk that exceeds me organisation's risk appetite.

Which of the following actions would be most appropriate for the chief audit executive to take?

60. Which of the following engagement techniques would be best to meet the objective of denting a personal conflict -of -interest situation affecting an organization’s procurement function?

61. Which of the following sampling techniques is typically used when an internal auditor wants to test a large sample for fraud?

62. Which of the following is an appropriate role for the internal audit activity with regard to the organization's risk management program?

63. During the filework phase of an assurance engagement the internal auditor decides that she wants to adjust the audit work program.

Which of the following is the most appropriate next step for the auditor to take9

64. A toy manufacturer receives certain components from an overseas supplier and uses them to assemble final products Recently quality reviews have identified numerous issues regarding the components' compliance with mandatory quality standards.

Which type of engagement would be most appropriate to assess the root causes of the quality issues?

65. An internal auditor wants to compare performance information from one quarter to another.

Which analytics procedure would the auditor use?

66. An internal auditor develops an engagement observation related to an organization's accumulation of large travel advances. The auditor observes that the organization's procedures do not require justification for travel advances greater than a specific amount.

Which of the following best describes the organization's procedures?

67. A chief audit executive's report to the board showed a significant trend of recent aud4s going over planned budgeted hours.

Which of the following factors could cause this trend?

68. According to MA guidance, which of the following factors should an internal auditor consider when assessing the likelihood of fraud risk1?

69. Which of the following internal audit procedures commonly involves sampling?

70. 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?

71. Which of the following statements is true regarding internal control questionnaires?

72. At a construction company, an internal auditor is planning an audit of the company's process for designing and building grid connections.

The process involves customers making payments m three parts

• The first payment of 10% after approval of the customer s application

• The second payment of 70% prior to construction

• The third payment of 20% after construction is complete

Which of the following key controls should the auditor test to ensure that the company is not taking any unwanted credit risks?

73. An internal audit manager is planning a contract compliance audit.

Which of the following should be done prior to developing the audit work program?

74. Which of the following engagement supervision activities should be performed first?

75. An internal auditor has been asked to join a project team to help design controls in a software application to address specific risks that have been identified by the team.

Which of the following actions is most appropriate for the internal auditor to perform?

76. In which of following scenarios is the internal auditor performing benchmarking?

77. Flowcharts highlight the control points to help internal auditors evaluate control design

78. For which of the following fraud engagement activities would it be most appropriate to involve a forensic auditor?

79. Which of the following would most likely prompt special notification from the chief audit executive to same management?

80. According to an internal audit observation, the organization’s rules of record management require all contracts to be registered and stored in a specific electronic system. One subsidiary has thousands of client contracts on paper, which are kept in the office because there are not enough assistants to scan the contracts into the system.

Which of the following component should be added to this observation?

81. An internal auditor is conducting a financial audit.

Which of the following audit procedures is most appropriate when existing internal controls are weak?

82. According to IIA guidance which of the following best describes reliable information?

83. Which of the following reasonably represents best practices regarding what should be the level of internal audit resource investment in monitoring and following up on engagement outcomes?

84. Management has taken immediate action to address an observation received during an audit of the organization's manufacturing process.

Which of the following is true regarding the validity of the observation closure?

85. Which of the following best describes the manual audit procedure known as vouching?

86. The board has asked the internal audit activity (IAA) to be involved in the organization's enterprise risk management process.

Which of the following activities is appropriate for IAA to perform without safeguards?

87. An internal auditor is asked to perform an assurance engagement in the organization's newly acquired subsidiary.

When developing the objectives tor the engagement which ot the following statements describes the most important items that the auditor needs to consider?

88. A corporate merger decision prompts the chief audit executive (CAE) lo propose interim changes to the existing annual audit plan to account for emerging risks.

Which of the following is the most appropriate action for the CAE to take regarding the changes made to the audit plan''

89. During an assurance engagement, an internal auditor noted that the time staff spent accessing customer information in large Excel spreadsheets could be reduced significantly through the use of macros. The auditor would like to train staff on how to use the macros.

Which of the following is the most appropriate course of action for the internal auditor to take?

90. An organization's finance manager plans to implement a state-of-the-art management system to better manage the organization's receivables. The finance manager consulted the chief audit executive (CAE) and asked for her assistance in determining whether the organization is able to accommodate this system.

How would the CAE proceed to determine the objectives of this engagement?

91. During the planning phase of an assurance engagement, an internal auditor seeks to gam an understanding of now when the area under review is accomplishing its objectives.

When of the Following information-gathering techniques is the auditor most likely to use?

92. The internal audit activity (IAA) wants to measure its performance related to the quality of audit recommendations.

Which of the following client survey questions would best help the IAA meet this objective?

93. Which of the following statements regarding the risk management process' support of the internal audit activity is true?

94. According to IIA guidance, which of the following are appropriate actions for the chief audit executive regarding management's response to audit recommendations?

95. Which of the following is not a primary reason for outsourcing a portion of the internal audit activity?

96. While performing fieldwork for an assurance engagement, a member of the internal audit team identified a key control that was not identified during the planning phase of the engagement.

Which of the following actions by the internal auditor would be most appropriate?

97. Communicate to senior management a summary report on the status and adequacy of audit resources.

98. When setting the scope for the identification and assessment of key risks and controls in a process, which of the following would be the least appropriate approach?

99. An internal auditor is preparing an internal control questionnaire for the procurement department as part of a preliminary survey.

Which of the following would provide the best source of information for questions?

100. When forming an opinion on the adequacy of management's systems of internal control, which of the following findings would provide the most reliable assurance to the chief audit executive?

• During an audit of the hiring process in a law firm, it was discovered that potential employees' credentials were not always confirmed sufficiently. This process remained unchanged at the following audit.

• During an audit of the accounts payable department, auditors calculated that two percent of accounts were paid past due. This condition persisted at a follow up audit.

• During an audit of the vehicle fleet of a rental agency, it was determined that at any given time, eight percent of the vehicles were not operational. During the next audit, this figure had increased.

• During an audit of the cash handling process in a casino, internal audit discovered control deficiencies in the transfer process between the slot machines and the cash counting area. It was corrected immediately.

101. An internal auditor suspects that employee turnover is unusually high at the organization's primary manufacturing plant.

To investigate this potential issue which of the following analytical approaches is the auditor likely to use?

102. According to IIA guidance which of the following represents sufficient information?

103. In which of the following situations would an internal control questionnaire best suit the internal auditor's purpose?

104. Which of the following would present the most critical external risk to an organization?

105. An internal auditor was assigned to review controls in the accounts payable function. Most of tie accounts payable processes are performed by a third-party service provider. The auditor included in the audit report a number of control deficiencies involving processes performed by the service provider. The service provider requested a copy of the report.

Which of Vie following would be the most appropriate response from the chief audit executive (CAE)?

106. Which of The following best describes a risk that is deemed "unacceptable" to the organization?