Act now and download your IIA IIA-CIA-Part2 test today! Do not waste time for the worthless IIA IIA-CIA-Part2 tutorials. Download Improve IIA Certified Internal Auditor - Part 2, Conducting the Internal Audit Engagement exam with real questions and answers and begin to learn IIA IIA-CIA-Part2 with a classic professional.
Q181. Which of the following might alert an auditor to the possibility of fraud in a division?
I. The division is not scheduled for an external audit this year.
II. Sales have increased by 10 percent.
III.
A significant portion of management's compensation is directly tied to reported net income of the division.
A.
I only
B.
III only
C.
I and II only
D.
I, II, and III
Answer: B
Q182. A report prepared by the internal audit activity contains several observations that disclose proprietary information regarding the organization's manufacturing process. According to the International Professional Practices Framework, which of the following is the appropriate treatment for this report?
A. Distribute the report only to the board to protect disclosure.
B. Disclose and distribute this information in a separate report.
C. Remove the observations and report verbally to senior management.
D. Require a separate non-disclosure statement from each recipient.
Answer: B
Q183. Which of the following audit techniques provides for continuous monitoring and analysis of
computer transactions for detailed auditing?
A. Integrated test facility.
B. Parallel simulation.
C. Test data.
D. Embedded audit routines.
Answer: D
Q184. Which of the following is not a direct benefit of control self-assessment (CSA)?
A. CSA allows management to have input into the audit plan.
B. CSA allows process owners to identify, evaluate, and recommend improving control deficiencies.
C. CSA can improve the control environment.
D. CSA increases control consciousness.
Answer: A
Q185. An internal auditor and engagement client are deadlocked over the auditor's differing opinion with management on the adequacy of access controls for a major system. Which of the following strategies would be the most helpful in resolving this dispute?
A. Conduct a joint brainstorming session with management.
B. Ask the chief audit executive to mediate.
C. Disclose the client's differing opinion in the final report.
D. Escalate the issue to senior management for a decision.
Answer: A
Q186. The chief audit executive's responsibility regarding control processes includes:
A. Assisting senior management and the audit committee in the development of an annual
assessment about internal control.
B. Overseeing the establishment of internal control processes.C. Maintaining the organization's governance processes.
D. Ensuring that the internal audit activity assesses all control processes annually.
Answer: A
Q187. A company has recently incurred significant cost overruns on one of its construction projects. Management suspects that these overruns were caused by the contractor improperly accounting for costs related to contract change orders. Which of the following procedures would be appropriate for testing this suspicion?
I. Verify that the contractor has not charged change orders with costs that have already been billed to the original contract.
II. Determine if the contractor has billed for original contract work that was canceled as a result of change orders.
III.
Verify that the change orders were properly approved by management.
A.
I only
B.
III only
C.
I and II only
D.
I and III only
Answer: C
Q188. Which of the following tasks is typically performed in the analysis phase of a benchmarking consulting engagement?
A. Identifying business capabilities.
B. Developing data collection tools.
C. Determining benchmarked process attributes.
D. Determining sample size.
Answer: C
Q189. Given the scarcity of internal audit resources, a chief audit executive (CAE) decides not to schedule a follow-up of audit recommendations when developing engagement work schedules. Why does the CAE’s decision violate the Standards?
A. It is not the CAE's responsibility to establish a process for a follow-up.
B. Lack of resources is not a sufficient reason to forgo a follow-up.
C. Follow-up actions should take priority over new engagements in scheduling.
D. When resources are scarce, the follow-up can be incorporated into the next engagement.
Answer: B
Q190. Which characteristic of risk assessment makes it a useful tool for audit planning?
A. It provides a list of auditable activities in the organization.
B. It ranks the severity of potentially adverse effects on the organization.
C. It provides a process for identifying and analyzing potentially adverse effects.
D. It evaluates the probability that an event or action may adversely affect the organization.
Answer: C
Q191. Which of the following would provide the greatest assurance of the accuracy of a computer
program's computation of freight charges for catalog sales?
A. Use discovery sampling, selecting transactions from invoices which should have freight charges added to them.
B. Use either test data or parallel simulation to test the computer application.
C. Use difference estimation, selecting transactions from invoices which should have freight
charges added to them.
D. Use generalized audit software to select a monetary-unit sample of invoices that have been
billed to customers.
Answer: B
Q192. Which of the following is an appropriate role for the internal audit activity with regard to the organization's risk management program?
A. Identify and manage risks in line with the organization's risk appetite.
B. Ensure that a proper and effective risk management process exists.
C. Attain an adequate understanding of the organization's key risk mitigation strategies.
D. Identify and ensure that appropriate controls exist to mitigate risks.
Answer: C
Q193. According to IIA guidance, which of the following actions might place the independence of the internal audit function in jeopardy?
A. Having no active role or involvement in the risk management process.
B. Auditing the risk management process for reasonableness.
C. Coordinating and managing the risk management process.
D. Participating with management in identifying and evaluating risks.
Answer: C
Q194. An internal auditor is planning an assurance engagement. The auditor first reviews the department's business objectives. What is the next step?
A. Review control activities.
B. Evaluate potential risks.
C. Establish risk management roles.
D. Set the scope of the engagement.
Answer: B
Q195. An internal auditor is conducting an assessment of the purchasing department. She has worked the full amount of hours budgeted for the engagement; however, the audit objectives are not yet complete. According to IIA guidance, which of the following are appropriate options available to the chief audit executive?
1.
Allow the auditor to decide whether to extend the audit engagement.
2.
Determine whether the work already completed is sufficient to conclude the engagement.
3.
Provide the auditor feedback on areas of improvement for future engagements.
4.
Provide the auditor with instructions and directions to complete the audit.
A. 1, 2, and 3
B. 1, 2, and 4
C. 1, 3, and 4
D. 2, 3, and 4
Answer: D