Latest IIA-CIA-Part2 Actual Free Exam Questions Updated 360 Questions
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NEW QUESTION # 77
Monetary-unit sampling is most useful when the internal auditor:
- A. Expects to find several material errors in the sample.
- B. Cannot cumulatively arrange the population items.
- C. Is concerned with overstatements.
- D. Is testing the accounts payable balance.
Answer: C
Explanation:
Section: Volume A
NEW QUESTION # 78
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?
- A. Document the observation for further follow up when testing the operating effectiveness of controls
- B. Interview the personnel associated with this observation.
- C. Determine that this situation is acceptable and focus on more significant issues
- D. Document the issue m the draft audit report
Answer: A
NEW QUESTION # 79
According to the Standards, which of the following best describes what must be agreed upon to establish an understanding with clients prior to starting a consulting engagement?
- A. The engagement scope, opportunities for making significant improvements, and client expectations.
- B. The engagement objectives, scope, and time frame to complete the engagement.
- C. The engagement objectives, scope, respective responsibilities, and other client expectations.
- D. The engagement objectives, access to clients records, and expectations.
Answer: C
NEW QUESTION # 80
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. Return the invoice to the vendor for correction.
- B. Issue an exception report.
- C. Authorize payment of the full invoice, but maintain an open purchase order record for the missing goods.
- D. Pay the amount billed and adjust the inventory account for the difference.
Answer: B
NEW QUESTION # 81
Which of the following risks assumes an absence of compensating controls in the area being reviewed?
- A. Detection risk.
- B. Control risk.
- C. Sampling risk.
- D. Inherent risk.
Answer: D
NEW QUESTION # 82
Which of the following situations justifies the release of an interim report to management and the board?
- The internal auditor is convinced that the audit observations require immediate attention. - The internal auditor would like to communicate a change in engagement scope for the activity under review. - The internal auditor notes that the engagement may extend over a longer time period. - The audit supervisor believes that issuing interim reports eases supervisory review and controls over working papers.
- A. 2, 3, and 4 only.
- B. 1 and 3 only.
- C. 2 and 3 only.
- D. 1, 2, and 3 only.
Answer: D
NEW QUESTION # 83
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?
- A. A condition of the organization's accumulation of large travel advances
- B. A consequence of the organization's accumulation of large travel advances
- C. A cause of the organization's accumulation of large travel advances
- D. A criterion of the organization's accumulation of large travel advances
Answer: C
NEW QUESTION # 84
After issuance of the engagement final communication for an audit of an organization's accounts payable function, which of the following should be sent satisfaction surveys?
I. Manager of disbursements.
II. Controller.
III. Chief operating officer.
IV. Audit committee members.
- A. I only
- B. II, III, and IV only
- C. II and III only
- D. I and II only
Answer: D
Explanation:
Section: Volume B
Explanation/Reference:
NEW QUESTION # 85
Which of the following best describes the primary concern of the audit manager upon review of engagement working papers of an auditor?
- A. To ensure that the audit programs are followed by the auditor.
- B. To ensure that the work papers create background for subsequent reviews.
- C. To ensure adequate control over the custody of working papers is exercised by the auditor.
- D. To ensure that as part of the documentation the auditor collected original documents that can corroborate the audit findings.
Answer: A
NEW QUESTION # 86
Direct staff as a percentage of total staff is an example of which of the following types of efficiency measures?
- A. Productivity ratio.
- B. Productivity index.
- C. Operating ratio.
- D. Resource utilization rate.
Answer: C
Explanation:
Section: Volume A
NEW QUESTION # 87
Which of the following statements about internal audit's follow-up process is true?
- A. The nature, timing, and extent of follow-up for assurance engagements is standardized to ensure quality performance.
- B. Internal auditors have responsibility for determining if management and the board have implemented the recommended action or otherwise accepted the risk.
- C. The actions of external auditors and other external assurance providers is not encompassed by internal audit's follow-up process.
- D. The follow-up process must be complete and documented in the working papers in order to conclude the engagement.
Answer: B
NEW QUESTION # 88
Management requested internal audit consulting services. During fieldwork significant control issues were identified by the internal audit team. Which of the following is an appropriate response from the chief audit executive?
- A. End the consulting engagement and report the results to management as planned
- B. Mutually agree with the engagement client on corrective actions
- C. Focus on the consulting engagement and schedule an assurance engagement next to address the control issues
- D. Report the significant control issues to senior management and the board and recommend corrective action
Answer: B
NEW QUESTION # 89
In an organization with a large internal audit activity that has several audit teams performing engagements simultaneously which of the following tasks is an engagement supervisor most likely to perform during the planning phase of a new engagement?
- A. Establish a means for resolving any professional judgment differences over ethical issues that may arise during the engagement.
- B. Review the sample testing results for exceptions.
- C. Evaluate whether the testing and results support the engagement results and conclusion
- D. Approve the engagement work program to ensure the program is designed to achieve the engagement objectives
Answer: D
NEW QUESTION # 90
Which of the following attribute sampling methods would be most appropriate to use to measure the total misstatement posted to an accounts payable ledger?
- A. Discovery sampling
- B. Probability to proportional size sampling
- C. Classical variable sampling
- D. Stop-or-go sampling
Answer: C
NEW QUESTION # 91
The external auditor has identified a number of production process control deficiencies involving several departments. As a result, senior management has asked the internal audit activity to complete internal control training for all related staff. According to IIA guidance, which of the following would be the most appropriate course of action for the chief audit executive to follow?
- A. Accept the engagement even if the audit engagement staff was previously responsible for operational areas being trained.
- B. Collaborate with the external auditor to ensure the most efficient use of resources.
- C. Accept the engagement but hire an external training specialist to provide the necessary expertise.
- D. Refuse to accept the consulting engagement because it would be a violation of independence.
Answer: A
NEW QUESTION # 92
Which of the following is true of engagement recommendations?
I. Specific suggestions for implementation must be included.
II. The internal auditor's observations and conclusions may serve as the basis.
III. Actions to correct existing conditions or improve operations may be included.
IV.
Approaches to correcting or enhancing performance may be suggested.
- A. I, III, and IV only
- B. I only
- C. III only
- D. II, III, and IV only
Answer: D
NEW QUESTION # 93
Which of the following audit procedures is most suitable for verifying that all sales transactions have been recorded?
- A. Tracing.
- B. Observation.
- C. Recomputation.
- D. Vouching.
Answer: A
NEW QUESTION # 94
An internal auditor is assigned to conduct an audit of security for a local area network (LAN) in the finance department of the organization. Investment decisions, including the use of hedging strategies and financial derivatives, use data and financial models which run on the LAN. The LAN is also used to download data from the mainframe to assist in decisions. Which of the following should be considered outside the scope of this security audit engagement?
- A. The ability of the LAN application to identify data items at the field or record level and implement user access security at that level.
- B. Interviews with users to determine their assessment of the level of security in the system and the vulnerability of the system to compromise.
- C. The level of security of other LANs in the company which also utilize sensitive data.
- D. Investigation of the physical security over access to the components of the LAN.
Answer: C
NEW QUESTION # 95
Which of the following is a responsibility of the internal auditor once a fraud investigation has been concluded?
- A. Ascertain the extent to which fraud has been perpetrated.
- B. Implement controls to prevent future occurrences.
- C. Determine if controls need to be implemented or strengthened to reduce future vulnerability.
- D. Notify the appropriate regulatory authorities regarding the outcome of the investigation.
Answer: C
NEW QUESTION # 96
What decision-making approach should a facilitator initiate if a group addresses an unfamiliar situation during a control self-assessment session?
- A. Compromise.
- B. Consensus building.
- C. Spontaneous agreement.
- D. Majority voting.
Answer: B
NEW QUESTION # 97
An audit observation noted that annual inventory counts of biofuel was not being performed appropriately Fuel yards were not visited and physical amounts of biofuel were not reconciled with accounting data Management of the division understood the issue and promised to resolve the problem When should the internal auditor schedule a follow-up review?
- A. Before financial year end
- B. When management has indicated that the issue has been resolved
- C. When convenient for both parties
- D. As soon as possible, no later than two months after the audit
Answer: B
NEW QUESTION # 98
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?
- A. The internal audit budget and resource plan for the coming fiscal year.
- B. The internal audit risk assessment and audit plan for the next fiscal year.
- C. The evaluation and compensation of the internal audit team.
- D. A request for an increase of the CAE's salary for the next fiscal year.
Answer: C
NEW QUESTION # 99
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To be eligible to take the IIA-CIA-Part2 exam, candidates must have a minimum of two years of experience in internal auditing or a related field. They must also have completed the IIA-CIA-Part1 (Essentials of Internal Auditing) exam. Candidates who pass the IIA-CIA-Part2 exam and meet the other requirements for certification will earn the CIA designation, which is recognized globally as a mark of excellence in the field of internal auditing.
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