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

IIA IIA-CIA-PART2 Online Questions & Answers

• Question 761:

  Which of the following describes an internal auditor's responsibilities to include audit procedures to detect fraud in audits of a multinational organization?

  A. International Accounting Standards require the internal auditor to include audit procedures which would detect fraud if it would cause a material misrepresentation of the financial statements.
  B. Internal auditors do not have any specific responsibilities with respect to including fraud-related audit procedures.
  C. Proper audit procedures, when carried out with due professional care, will guarantee that fraud, if present, will be detected.
  D. If significant control weaknesses are detected, additional tests should be directed toward other indicators of fraud.
  D. If significant control weaknesses are detected, additional tests should be directed toward other indicators of fraud.

• Question 762:

  Direct staff as a percentage of total staff is an example of which of the following types of efficiency measures?

  A. Productivity ratio.
  B. Productivity index.
  C. Operating ratio.
  D. Resource utilization rate.
  C. Operating ratio.

• Question 763:

  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
  C. I and II only

• Question 764:

  In the following risk control map risks have been categorized based on the level of significance and the associated level of control. Which of the following statements is true regarding Risk C?

  

  A. The level of control is appropriate given the level of risk
  B. The level of control is excessive given the level of risk
  C. The level of control is inadequate given the level of risk
  D. There is not enough of information to determine whether the controls are appropriate or not
  C. The level of control is inadequate given the level of risk

• Question 765:

  The following are potential sources of evidence regarding the effectiveness of a division's total quality management program. The least persuasive evidence would be a comparison of:

  A. Employee morale before and after program implementation.
  B. Scrap and rework costs before and after program implementation.
  C. Customer returns before and after program implementation.
  D. Manufacturing and distribution costs per unit before and after program implementation.
  A. Employee morale before and after program implementation.

• Question 766:

  When determining the nature, timing, and extent of follow up, the chief audit executive considers all of the following factors except:

  A. Significance of the reported observation or recommendation, degree of effort, and cost needed to correct the reported condition.
  B. Impact that may result should the corrective action fail.
  C. Authority and responsibility of the person required to take corrective action.
  D. Complexity of the corrective action and time period involved.
  C. Authority and responsibility of the person required to take corrective action.

• Question 767:

  During engagement planning, an internal auditor assessed risks related to achieving business objectives in the area under review. Next, the auditor will identify criteria for evaluating controls. What is the proper action for the auditor to take if such criteria has not been established by management or the board?

  A. The auditor must note the lack of criteria as a defficiency and include it in the audit report.
  B. The auditor must develop criteria aligned with the engagement objective.
  C. The auditor must identity criteria through discussion with management and the board.
  D. The auditor must not use criteria if they do not exist.
  B. The auditor must develop criteria aligned with the engagement objective.

• Question 768:

  The internal audit activity is planning an assurance engagement for a foreign subsidiary. According to IIA guidance, which of the following would be included in the preliminary communication to management of the area under review?

  A. The scope of the engagement, the estimated time frame, and the names of the auditors.
  B. The estimated time frame, the names of the auditors, and the resources and travel budget.
  C. The names of the auditors, the resources and travel budget, and the scope of the engagement.
  D. The resources and travel budget, the scope of the engagement, and the estimated time frame.
  A. The scope of the engagement, the estimated time frame, and the names of the auditors.

• Question 769:

  Which of the following is a justifiable reason for omitting advance client notice when planning an audit engagement?

  A. Advance notice may result in management making corrections to reduce the number of potential defficiencies.
  B. Previous management action plans addressing prior internal audit recommendations remain incomplete.
  C. The engagement includes audit assurance procedures such as sensitive or restricted asset Verifications.
  D. The audit engagement has already been communicated and approved through the annual audit plan.
  C. The engagement includes audit assurance procedures such as sensitive or restricted asset Verifications.

• Question 770:

  Which of the following are advantages of using statistical sampling?

  1.Statistical sampling provides a quantitative expression of the internal audit team's sampling results.

  2.Statistical sampling provides the internal audit team an opportunity to select a maximum sample size that satisfies the objective of the testing.

  3.Statistical sampling permits the internal auditor to inject a subjective judgment in determining the sample size in order to audit items of greatest value and highest risk.

  4.Statistical sampling supports extrapolation.

  A. 1 and 3 only
  B. 1 and 4 only
  C. 1, 2, and 3
  D. 2, 3, and 4
  B. 1 and 4 only