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

IIA IIA-CIA-PART2 Online Questions & Answers

• Question 131:

  When reviewing workpapers, engagement supervisors may ask for additional evidence or clarification via review notes. According to IIA guidance, which of the following statements is true regarding the engagement supervisor's review notes?

  A. The review notes may be cleared from the final documentation once the engagement supervisor's concerns have been addressed.
  B. Management of the area under review must address the engagement supervisor's review notes before the audit report can be finalized.
  C. The chief audit executive must initial or sign the engagement supervisor's review notes to provide evidence of appropriate engagement supervision.
  D. Review notes provide documented proof that the engagement is supervised properly and must be retained for the quality assurance and improvement program.
  A. The review notes may be cleared from the final documentation once the engagement supervisor's concerns have been addressed.

• Question 132:

  A company owns a machine that will produce 100 light switches in four hours. Due to increased demand, a second machine capable of producing 100 light switches in three hours has been added. Approximately how many hours will it take to produce 100 light switches using both machines working together?

  A. 7.0
  B. 3.5
  C. 1.7
  D. 0.58
  C. 1.7

• Question 133:

  An auditor is scheduled to audit payroll controls for a company which has recently outsourced its processing to an information service bureau. What action should the auditor take, considering the outsourcing decision?

  A. Review the controls over payroll in both the company and the service bureau.
  B. Review only the company's controls over data sent to and received from the service bureau.
  C. Review only the controls over payments to the service bureau based on the contract.
  D. Cancel the engagement because the processing is being performed outside of the organization.
  A. Review the controls over payroll in both the company and the service bureau.

• Question 134:

  As part of the planning process during an internal audit of the organization's vendor management process, an internal auditor administers a risk and control questionnaire to a few major vendors. What is the primary purpose of administering this type of questionnaire?

  A. To verify records from one source to subsequently prepared records about the process.
  B. To ascertain whether certain control procedures are in existence regarding the process.
  C. To obtain testimonial information about certain controls within the process.
  D. To validate control information through outside parties independent of the process.
  B. To ascertain whether certain control procedures are in existence regarding the process.

• Question 135:

  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.
  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.

• Question 136:

  An audit observation states the following:

  "Internal policy prohibits employees from entering into contracts with financial obligations without proper approval. A project manager signed a change to an important service agreement without obtaining the proper approval. As a result: the

  organization is receiving $5,000 per month less for its services."

  Which of the following should be added to the observation?

  A. The reason for not following the internal policy.
  B. A description of what constitutes proper approval.
  C. The annual impact of the changed agreement on cash flows.
  D. Details regarding when the change to the agreement was signed.
  B. A description of what constitutes proper approval.

• Question 137:

  The internal audit activity is reviewing a banking network of eight branches, which is expected to take several months. The engagement involves comparing the operation of each branch against the organization's documented standards. With several branches still left to review, the internal auditors have noted deviations from operating standards at some branches where reviews have already been completed. How should the internal auditors proceed?

  A. At the end of the engagement, ensure that the issues are adequately detailed in an audit report and in-depth discussions are held with senior management at the audit exit meeting
  B. Document the observations noted upon completion of each branch review and issue interim reports, including the findings and recommendations.
  C. For the deviations observed at the previously reviewed branches, determine whether similar breaches have been found at other locations and compile in one audit report.
  D. Complete the review for the first four branches and extrapolate the findings noted to the remaining branches, properly documenting them in an overall audit report.
  B. Document the observations noted upon completion of each branch review and issue interim reports, including the findings and recommendations.

• Question 138:

  A governmental auditor was assigned to determine reasons why the students in one region scored significantly higher on education evaluation tests than did the students in another region. Previous research showed that there is a direct

  correlation between public Financial support and student results.

  Which of the following is most likely to explain the difference in the regional results?

  A. The more successful region spends 30 percent more money on education than does the other region.
  B. A higher percentage of the general tax fund is spent on education in the more successful region than in the other region.
  C. The more successful region spends more money per student on education than does the other region.
  D. The more successful region has increased educational spending by an average of 10 percent each year for the last three years, whereas the other region's
  C. The more successful region spends more money per student on education than does the other region.

• Question 139:

  An audit of management's quality program includes testing the accuracy of the cost-of-quality reports provided to management. Which of the following internal control objectives is the focus of this testing?

  A. To ensure compliance with policies, plans, procedures, laws, and regulations.
  B. To ensure the accomplishment of established objectives and goals for operations or programs.
  C. To ensure the reliability and integrity of information.
  D. To ensure the economical and efficient use of resources.
  C. To ensure the reliability and integrity of information.

• Question 140:

  Upon concluding the engagement fieldwork, an internal auditor discusses the audit findings with operational management. There is a greater likelihood that the auditor will obtain a responsive action plan from management when both parties agree on which of the following attributes of the audit finding?

  A. Criteria
  B. Condition
  C. Cause
  D. Effect
  D. Effect