Updated Jan-2022 Test Engine to Practice Test for IIA-CIA-Part2 Exam Questions and Answers!
Practice of Internal Auditing Certification Sample Questions and Practice Exam
IIA IIA-CIA-Part2 Exam Syllabus Topics:
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NEW QUESTION 136
According to the Standards, which of the following is applicable to the internal audit activity's quality assurance and improvement program?
- A. Periodic monitoring of the internal audit activity should be done.
- B. All aspects of the internal audit activity should be evaluated.
- C. An external assessment should be obtained every three years.
- D. The review of assurance services should be the primary focus.
Answer: B
Explanation:
Section: Volume D
NEW QUESTION 137
Which role is not considered a change agent when an organization wants to implement structural changes?
- A. Senior management.
- B. Independent consultant.
- C. Shareholder.
- D. Line management.
Answer: C
NEW QUESTION 138
Once an audit report is drafted, the auditor's supervisor should review it primarily to ensure that all:
- A. Processes within the audited area were reviewed.
- B. Sample sizes appear appropriate for any issues found.
- C. Statements are supported and can be authenticated.
- D. Recommendations for corrective action are clear.
Answer: C
NEW QUESTION 139
Which of the following documents should the chief audit executive review and approve?
1. Workpaper retention policy.
2. Audit committee meeting minutes.
3. Internal audit handbook.
4. Quarterly financial statements.
- A. 1 and 3 only
- B. 1, 3, and 4 only
- C. 2 and 4 only
- D. 1 and 2 only
Answer: A
NEW QUESTION 140
According to the Standards, which of the following would have the least direct interest in the draft report of a compliance review of the purchasing function?
- A. Purchasing manager.
- B. Audit committee.
- C. Purchasing staff.
- D. Director of finance.
Answer: B
Explanation:
Section: Volume D
NEW QUESTION 141
If an auditor expects to find numerous discrepancies between recorded values and audited values of sample selections, which sampling technique would be most appropriate?
- A. Discovery sampling.
- B. Difference estimation sampling.
- C. Attributes sampling.
- D. Probability-proportional-to-size sampling.
Answer: B
NEW QUESTION 142
The chief audit executive (CAE) of an organization has established an internal audit activity (IAA) quality assessment program. According to IIA guidance, which of the following would be part of this program?
- A. Compliance with a checklist of required audit procedures, and identified areas of improvement reviewed at the end of the year.
- B. Assessment of the IAA conducted independently of client feedback, and the review of individual audits to determine the quality and timeliness of supervision.
- C. Compliance with a checklist of required audit procedures, and review of individual audits to determine the quality and timeliness of supervision.
- D. Assessment of the IAA conducted independently of client feedback, and identified areas of improvement reviewed at the end of the year.
Answer: C
Explanation:
Section: Volume C
NEW QUESTION 143
According to the Standards, which of the following describes the condition attribute when applied to the observations and recommendations contained in the audit report?
- A. The reason for the difference between the expected state and the actual state.
- B. The risk or exposure the organization encounters because the actual state is not consistent with the criteria.
- C. The factual evidence that the internal auditor found in the course of the examination.
- D. The standards, measures, or expectations used in making an evaluation or verification.
Answer: C
Explanation:
Section: Volume C
NEW QUESTION 144
A chief audit executive is preparing interview questions for the upcoming recruitment of a senior internal auditor. According to IIA guidance, which of the following attributes shows a candidate's ability to probe further when reviewing incidents that have the appearance of misbehavior?
- A. Curiosity.
- B. Integrity.
- C. Flexibility.
- D. Initiative.
Answer: A
NEW QUESTION 145
Many questionnaires are made up of a series of different questions that use the same response categories (for example: strongly agree, agree, neither, disagree, strongly disagree). Some designs will have different groups of respondents answer alternate versions of the questionnaire that present the questions in different orders and reverse the orientation of the endpoints of the scale (for example: agree on the right and disagree on the left). The purpose of such questionnaire variations is to:
- A. Eliminate intentional misrepresentations.
- B. Reduce the effects of pattern response tendencies.
- C. Test whether respondents are reading the questionnaire.
- D. Make it possible to get information about more than one population parameter using the same questions.
Answer: B
NEW QUESTION 146
According to the Standards, which of the following would least likely be considered a red flag when evaluating the risk for fraud?
- A. It is alleged that an employee is receiving vendor kickbacks.
- B. Cash receipts appear to be lower than expected from an employee's cash drawer.
- C. Health benefits are detected to be claimed for a deceased employee.
- D. An employee did not approve an internal report detailing expenses for the month.
Answer: D
Explanation:
Section: Volume D
NEW QUESTION 147
Questions used to interrogate individuals suspected of fraud should:
- A. Move from general to specific.
- B. Adhere to a predetermined order.
- C. Cover more than one subject or topic.
- D. Direct the individual to a desired answer.
Answer: A
NEW QUESTION 148
An engagement team is being assembled to audit of one of the organization's vendors Which of the following statements best applies to this scenario?
- A. The engagement team should include internal auditors who have expertise in investigating vendor fraud
- B. To preserve independence and objectivity, an auditor who worked for the vendor two years prior may not participate on the engagement team
- C. The engagement team may include an auditor who lacks knowledge of the industry in which the vendor operates
- D. The engagement team should be composed of certified accountants who are proficient In financial statement analysis and local accounting principles
Answer: A
NEW QUESTION 149
Which of the following activities would be performed during a benchmarking consulting engagement?
I.Collect data relevant to the benchmarking process.
II.
Review all business processes.
III.
Define critical success factors.
IV.
Identify performance gaps.
- A. I and III only.
- B. II and IV only.
- C. I, III, and IV only.
- D. I, II, and III only.
Answer: C
NEW QUESTION 150
Due to the expanded role of internal audit in the organization, the chief audit executive (CAE) of a construction company decides to employ the services of an outsourced audit service provider to augment the internal audit staff. What does the CAE need to consider in determining whether the outsourced audit service provider possesses the necessary knowledge, skills and other competencies to perform an audit engagement?
- A. The financial interest that the external service provider may have in the organization.
- B. Specific matters expected to be covered in the engagement communications.
- C. The extent of other ongoing services the external service provider may be performing for the organization.
- D. The reputation of the external service provider.
Answer: D
NEW QUESTION 151
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?
- A. A risk assessment
- B. A fraud investigation
- C. An operational audit
- D. A third-party audit
Answer: D
NEW QUESTION 152
When determining the nature, timing, and extent of follow up, the chief audit executive considers all of the following factors except:
- A. Complexity of the corrective action and time period involved.
- B. Significance of the reported observation or recommendation, degree of effort, and cost needed to correct the reported condition.
- C. Impact that may result should the corrective action fail.
- D. Authority and responsibility of the person required to take corrective action.
Answer: D
Explanation:
Section: Volume C
NEW QUESTION 153
A large retail organization, which sells most of its products online, experiences a computer hacking incident. The chief IT officer immediately investigates the incident and concludes that the attempt was not successful. The chief audit executive (CAE) learns of the attack in a casual conversation with an IT auditor. Which of the following actions should the CAE take?
1. Meet with the chief IT officer to discuss the report and control improvements that will be implemented as a result of the security breach, if any.
2. Immediately inform the chair of the audit committee of the security breach, because thus far only the chief IT officer is aware of the incident.
3. Meet with the IT auditor to develop an appropriate audit program to review the organization's Internet-based sales process and key controls.
4. Include the incident in the next quarterly report to the audit committee.
- A. 3 and 4
- B. 2 and 4
- C. 1 and 3
- D. 1 and 2
Answer: D
NEW QUESTION 154
According to the Standards, which of the following should be the basis for scheduling follow-up of engagement recommendations?
- A. The internal audit charter.
- B. The agreement made between internal auditors and management.
- C. The risks and exposures involved.
- D. The follow-up manual procedures.
Answer: C
NEW QUESTION 155
A chief audit executive (CAE) suspects that several employees have used desktop computers for personal gain. In conducting an investigation, the primary reason that the CAE would choose to engage a forensic information systems auditor rather than using the organization's information systems auditor is that a forensic information systems auditor would possess:
- A. Knowledge of what constitutes evidence acceptable in a court of law.
- B. Knowledge of the computing system that would enable a more comprehensive assessment of the computer use and abuse.
- C. Superior analytical skills that would facilitate the identification of computer abuse.
- D. Superior documentation and organization skills that would facilitate in the presentation of findings to senior management and the board.
Answer: A
NEW QUESTION 156
An audit engagement objective at a manufacturer is to determine the quality of raw materials purchased. Which of the following actions would best enable an internal auditor to satisfy this objective?
- A. Analyze the provision for sales allowances.
- B. Research the rationale for customer returns.
- C. Analyze the percentage of scrap incurred during production.
- D. Evaluate the volume and characteristics of products rejected during processing.
Answer: D
NEW QUESTION 157
Which of the following items should be addressed in an organization's privacy statement?
I.Intended use of collected information.
II.
Data storage and security.
III.
Network/infrastructure authentication controls.
IV.
Data retention policy of the organization.
Parties authorized to access information.
- A. II, III, IV, and V only.
- B. I, II, and V only.
- C. I and II only.
- D. I and IV only.
Answer: B
NEW QUESTION 158
An organization's internal audit plan includes a recurring assurance review of the human resources (HR) department. Which of the following statements is true regarding preliminary communication between the auditor in charge (AIC) and the HR department?
1. The AIC should notify HR management when the draft audit plan is being developed, as a courtesy.
2. The AIC should notify HR management before the planning stage begins.
3. The AIC should schedule formal status meetings with HR management at the start of the engagement.
4. The AIC should finalize the scope of the engagement before communicating with HR management.
- A. 1 and 4
- B. 2 and 4
- C. 1 and 3
- D. 2 and 3
Answer: D
NEW QUESTION 159
An internal auditor has been assigned to perform a quality audit on a manufacturing plant. Which course of action should the auditor perform first?
- A. Compare the planned outputs with the actual outputs.
- B. Review the levels of scrap and rework.
- C. Evaluate the plant's ability to meet production quotas.
- D. Ascertain the costs of materials purchased.
Answer: B
NEW QUESTION 160
An internal auditor has completed an audit of an organization's activities and is ready to issue a report.
However, the client disagrees with the internal auditor's conclusions. The auditor should:
- A. Issue the audit report and omit the client's conclusion as it is not the opinion of the internal auditor.
- B. Withhold the issuance of the audit report until agreement on the issues is obtained.
- C. Perform additional work, with the client's concurrence, to resolve the areas of disagreement and delay the issuance of the report until agreement is reached.
- D. Issue the audit report and state both the auditor and client positions and the reasons for the disagreement.
Answer: D
Explanation:
Section: Volume C
NEW QUESTION 161
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