It is impossible to pass IIA IIA-CIA-Part2 exam without any help in the short term. Come to Ucertify soon and find the most advanced, correct and guaranteed IIA IIA-CIA-Part2 practice questions. You will get a surprising result by our Up to date Certified Internal Auditor - Part 2, Conducting the Internal Audit Engagement practice guides.
Q91. A company's policy requires that all customers be treated in a fair and consistent manner. Which of the following audit procedures would provide the most persuasive evidence that the policy was followed?
A. Compare the aging of outstanding receivables due from each customer.
B. Compare credit reports with annual sales for a sample of customers.
C. Compare the ratio of outstanding receivables to the authorized credit limit for each customer.
D. Compare the sales discounts offered to each customer.
Answer: D
Q92. When interviewing an individual suspected of fraud, what type of questions would be asked after the introductory questions?
A. Informational questions.
B. Admission-seeking questions.
C. Assessment questions.
D. Closing questions.
Answer: A
Q93. An organization has recently incurred significant cost overruns on one of its construction projects.
Management suspects that these overruns were caused by the contractor improperly charging for
costs related to contract change orders. Which of the following procedures are appropriate for
testing this suspicion?
1.
Determine if the contractor has received proper approval of change orders from management.
2.
Determine if the contractor has billed for original contract work cancelled by the change orders.
3.
Determine if the contractor has charged change orders with costs already billed to the original
contract.
4.
Determine if the contractor has been paid for change orders that have not yet been completed.
A. 1 and 2 only
B. 1 and 3 only
C. 2 and 3 only
D. 3 and 4 only
Answer: C
Q94. While preparing the annual audit plan, the newly assigned chief audit executive (CAE) learns that the organization has not yet implemented a risk framework. Which of the following would be the most appropriate action for the CAE to take regarding potential engagements?
A. Prioritize the engagements that were not done in previous years and schedule them for the upcoming year.
B. Consult with senior management and the board and make adjustments regarding risk.
C. Review all outstanding recommendations from prior audit engagements and focus on them in the upcoming year.
D. Use the previous three-year audit plan to extrapolate potential engagements for the upcoming year's schedule of engagement.
Answer: B
Q95. Which of the following behaviors could represent a significant ethical risk if exhibited by an organization's board?
1.
Intervening during an audit involving ethical wrongdoing.
2.
Discussing periodic reports of ethical breaches.
3.
Authorizing an investigation of an unsafe product.
4.
Negotiating a settlement of an employee claim for personal damages.
A. 1 and 2
B. 1 and 4
C. 2 and 3
D. 3 and 4
Answer: B
Q96. Which of the following factors should a chief audit executive consider when determining the audit universe?
1.
Components of the organization's strategic plan.
2.
Inputs from senior management and the board.
3.
Views of competitors and business associates.
4.
Results of exit interviews with departing employees.
A. 1 and 2 only
B. 2 and 4 only
C. 1, 2, and 4
D. 2, 3, and 4
Answer: A
Q97. An organization has a health and safety division that conducts audits to meet regulatory requirements. The chief health and safety officer reports directly to the CEO. Which of the following describes an appropriate role for the chief audit executive (CAE) with regard to the organization's health and safety program?
A. The CAE has no role to play, because the chief health and safety officer reports to a senior executive.
B. The CAE should coordinate with, and review the work of, the chief health and safety officer to gain an understanding of whether risks related to health and safety are managed properly.
C. The CAE should give periodic reports directly to the regulator regarding health and safety issues, as it is the appropriate regulatory oversight body.
D. The CAE should hire an independent external specialist to conduct an annual assessment and provide assurance over the effectiveness of the health and safety program and the reliability of its reports.
Answer: B
Q98. Which of the following best describes the four components of a balanced scorecard?
A. Customers, innovation, growth, and internal processes.
B. Business objectives, critical success factors, innovation, and growth.
C. Customers, support, critical success factors, and learning.
D. Financial measures, learning and growth, customers, and internal processes.
Answer: D
Q99. While conducting an audit of a third party's Web-based payment processor, an internal auditor discovers that a programming error allows customers to create multiple accounts for a single mailing address. Management agrees to correct the program and notify customers with multiple accounts that the accounts will be consolidated. Which of the following actions should the auditor take?
1.
Schedule a follow-up review to verify that the program was corrected and the accounts were consolidated.
2.
Evaluate the adequacy and effectiveness of the corrective action proposed by management.
3.
Amend the scope of the subsequent audit to verify that the program was corrected and that accounts were consolidated.
4.
Submit management's plan of action to the external auditors for additional review.
A. 1 and 2
B. 1 and 4
C. 2 and 3
D. 3 and 4
Answer: A
Q100. Which of the following audit planning activities adds the least value in understanding the current risk exposures facing the corporation?
A. Review of organizational strategic plans and operational plans.
B. Consultation with senior management and the audit committee.
C. Review of the external auditor's risk assessment.
D. Review of corporate performance reporting and benchmarking.
Answer: D
Q101. The chief executive officer has requested that the chief audit executive (CAE) coordinate the establishment of an enterprise risk management (ERM) program for the organization. Which of the following would be the most appropriate action for the CAE?
A. Accept the request as the role of coordinating ERM is a core function of internal audit.
B. Decline the request as this role compromises the CAE's objectivity.
C. Accept the request after consulting with the board and adhering to proper safeguards.
D. Decline the request as internal audit has limited knowledge and experience of risk at the
enterprise level to undertake the assignment.
Answer: C
Q102. Persuasive evidence indicates that a member of senior management has been involved in insider trading that would be considered fraudulent. However, the evidence was encountered during an operational audit and is not considered relevant to the audit. Which of the following is the most appropriate action for the chief audit executive to take?
A. Report the evidence to external legal counsel for investigation. Report the legal counsel findings to management.
B. Report the evidence to the chairperson of the audit committee and recommend an investigation.
C. Conduct sufficient audit work to conclude whether fraudulent activity has taken place, then report the findings to the chairperson of the audit committee and to government officials if appropriate action is not taken.
D. Discontinue audit work associated with the insider trading since it is not relevant to the existing audit.
Answer: B
Q103. Which of the following would be a legitimate action for the internal auditor to take when monitoring audit engagement results?
1.
Disregard a certain risk because management and the board accepted the risk in the past.
2.
Abdicate the responsibility for a particular risk because it is not part of the audit plan.
3.
Obtain agreement from senior management that unresolved audit issues will be reported to the board. Request corrective action from management in writing.
A. 1 and 3 only
B. 2 and 3 only
C. 3 and 4 only
D. 1, 2, and 4 only
Answer: C
363. Which of the following statements is not true about the oversight and review of working papers by the chief audit executive (CAE)?
A. The CAE has ultimate responsibility for reviewing working papers and remains accountable for the achievement of objectives and the quality of work.
B. The need for CAE review depends on the proficiency and experience of the internal auditor and the complexity of the task.
C. The CAE is responsible for all significant professional judgments made during the audit process and should therefore personally review working papers to ensure conclusions were professionally arrived at.
D. The CAE, although having overall responsibility for reviewing work completed, can delegate such task to appropriately experienced internal audit staff.
Answer: C
Q104. Which of the following would be a red flag that indicates the possibility of inventory fraud?
I. The controller has assumed responsibility for approving all payments to certain vendors.
II. The controller has continuously delayed installation of a new accounts payable system, despite a corporate directive to implement it.
III. Sales commissions are not consistent with the organization's increased levels of sales.
IV.
Payments to certain vendors are supported by copies of receiving memos, rather than originals.
A. I and II only
B. II and III only
C. I, II, and IV only
D. I, III, and IV only
Answer: C
Q105. The internal audit activity of an investment company received a request to provide assurance on the risk management process. Preliminary discussion with senior management revealed that separate functions within the organization perform some form of risk management activities. Which of the following is the most effective tool for ensuring that risk management activities are coordinated among these functions?
A. Delphi technique.
B. Assurance map.
C. Facilitated workshop.
D. Analytical reviews.
Answer: B