IIA IIA-CIA-PART2 Online Practice Questions and Exam Preparation

IIA IIA-CIA-PART2 Online Questions & Answers

• Question 1011:

  A chief audit executive (CAE) is following up on a significant audit observation that was discovered during an engagement a few months prior. The operating manager initially agreed to implement remedial actions to mitigate the risk. However, the manager now states that she has decided to accept the risk and will not implement any additional controls. If the CAE believes that the risk acceptance is not within the risk tolerance of the organization, what is his most appropriate next step?

  A. Document management's decision to accept the risk and close the open audit observation.
  B. Lower the risk rating of the audit observation, as the manager no longer believes remedial action is necessary.
  C. Escalate the matter to senior management.
  D. Immediately report the matter to the board for resolution.
  C. Escalate the matter to senior management.

• Question 1012:

  An internal audit activity plans its engagements based on an organization-wide risk assessment. According to IIA guidance, which of the following statements is true regarding the required frequency of the risk assessment?

  A. The risk assessment must be performed at least quarterly.
  B. The risk assessment must be performed at least annually.
  C. The risk assessment must be performed at least once every five years, in alignment with the internal audit activity's quality assurance and improvement program.
  D. There is no specific requirement; a risk assessment should be performed as needed to account for changes in the business environment.
  D. There is no specific requirement; a risk assessment should be performed as needed to account for changes in the business environment.

• Question 1013:

  Management has asked the internal audit activity to perform an operational audit of a division that recently reported an increase in expenditures in addition to a decrease in profits. However, existing internal audit resources are currently engaged in a legal compliance audit. Which factor would be considered least important in deciding whether resources should be removed from the legal compliance audit to the operational audit?

  A. The increase in expenditures at the division over the past year.
  B. The probability that the legal compliance audit will detect fraud.
  C. The results of the external auditor's most recent financial audit.
  D. The potential for regulatory fines associated with the legal compliance audit.
  C. The results of the external auditor's most recent financial audit.

• Question 1014:

  A newly appointed chief audit executive (CAE) of a small organization is developing a resource management plan. Which of the following approaches would be most beneficial to help the CAE obtain details of the internal audit activity's collective knowledge, skills, and other competencies?

  A. Review or establish a documented skills assessment of the internal audit staff and gather information from post-audit surveys.
  B. Obtain from the human resources department the job descriptions and position requirements for all internal audit staff.
  C. Conduct an objective written test of the internal audit staff to assess their knowledge and skills related to core internal audit competencies.
  D. Request the internal audit staff to submit a document that summarizes their most recent performance appraisals and post audit reviews.
  A. Review or establish a documented skills assessment of the internal audit staff and gather information from post-audit surveys.

• Question 1015:

  Which of the following is a primary reason for an internal auditor to use a risk and control questionnaire when auditing financial processes?

  A. To gain an understanding of the control environment.
  B. To collect as much financial data as possible before engagement fieldwork begins.
  C. To test the effectiveness of financial controls in an efficient and relatively inexpensive way.
  D. To facilitate the quantification of financial data obtained.
  A. To gain an understanding of the control environment.

• Question 1016:

  The chief audit executive (CAE) uses the results of all engagements from the past year to provide an overall assessment on the current maturity level of internal control systems. Which of the following objectives is the CAE most likely pursuing?

  A. Optimizing the balance between the costs and Benefits of controls
  B. Maximizing the effectiveness and efficiency of controls
  C. Improving the degree of compliance with controls
  D. Promoting the continuous improvement of controls
  D. Promoting the continuous improvement of controls

• Question 1017:

  An auditor for a major retail company suspects that inventory fraud is occurring at three stores which have high costs of goods sold. Which of the following audit activities would provide the most persuasive evidence that fraud is occurring?

  A. Use an integrated test facility (ITF) to compare individual sales transactions with test transactions submitted through the ITF and investigate all differences.
  B. Interview the three individual store managers to determine if their explanations about the observed differences are the same, and then compare their explanations to that of the section manager.
  C. Schedule a surprise inventory audit to include a physical inventory and investigate areas of inventory shrinkage.
  D. Select a sample of individual store prices and compare them with the sales entered on the cash register for the same items.
  C. Schedule a surprise inventory audit to include a physical inventory and investigate areas of inventory shrinkage.

• Question 1018:

  A senior internal auditor is hired within the internal audit activity for a period of two years before advancing to an operations manager role within the business operations team. Which staffing arrangement is being used in this scenario?

  A. Center of competence.
  B. Career model.
  C. Rotational model.
  D. Cosourcing agreement.
  B. Career model.

• Question 1019:

  A chief audit executive wants to improve the quality and relevance of professional judgements made by new internal audit staff. Which of the following actions would be most appropriate to achieve this goal?

  A. Implement a formal education program that covers all aspects of the internal audit activity.
  B. Work with senior audit staff to implement a mentoring program.
  C. Provide a variety of engagement assignments to build new auditor's experience.
  D. Appraise the judgements made by new internal auditors after each engagement.
  B. Work with senior audit staff to implement a mentoring program.

• Question 1020:

  An internal audit activity has to confirm the validity of the activities reported by a grantee that received a charitable contribution from the organization. Which of the following methods would best help meet this objective?

  A. Visiting the grantee to assess whether the execution of the project was in line with the defined grant scope.
  B. Verifying that the grantee's final report is in line with what was depicted in the initial budget request.
  C. Reconciling general ledger accounts used by management of the area under review for reflecting expenses on charitable contributions.
  D. Interviewing employees of the corporate affairs department, which is responsible for charitable activities.
  A. Visiting the grantee to assess whether the execution of the project was in line with the defined grant scope.