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

IIA IIA-CIA-PART2 Online Questions & Answers

• Question 981:

  An internal auditor for a financial institution has just completed an audit of loan processing. Of the 81 loans approved by the loan committee, the auditor found seven loans which exceeded the approved amount. Which of the following actions would be inappropriate on the part of the auditor?

  A. Examine the seven loans to determine if there is a pattern. Summarize amounts and include in the engagement final communication.
  B. Report the amounts to the loan committee and leave it up to them to correct. Take no further follow-up action at this time and do not include the items in the engagement final communication.
  C. Follow up with the appropriate vice president and include the vice president's acknowledgment of the situation in the engagement final communication.
  D. Determine the amount of the differences and make an assessment as to whether the dollar differences are material. If the amounts are not material, not in
  B. Report the amounts to the loan committee and leave it up to them to correct. Take no further follow-up action at this time and do not include the items in the engagement final communication.

• Question 982:

  When auditing the account receivables for the first time, an internal auditor noted that the finance team had not -- over many accounting periods -- reviewed the accounts receivables for debts that could no longer be collected. How should the auditor proceed?

  A. Escalate the finding to the board, due to the significance of the risk.
  B. Recommend that management review the receivables for debts that can no longer be collected and remove them from the cash flow statement.
  C. Recommend that management review the receivables for debts that can no longer be collected and write them off.
  D. Document the finding and conclude that no immediate action is warranted, as bad debt allowances are merely estimates.
  C. Recommend that management review the receivables for debts that can no longer be collected and write them off.

• Question 983:

  What type of analysis is performed when an auditor tests for unusual variations in information by comparing the number of employees working at a factory site with the direct cost of production each month over a period of one year?

  A. Trend analysis.
  B. Ratio analysis.
  C. Regression analysis.
  D. Horizontal analysis.
  C. Regression analysis.

• Question 984:

  An internal auditor has just undertaken an organization-wide risk assessment. In identifying potential audit engagements, the internal auditor should consider least:

  A. Focusing on the high risk areas as sources of potential engagements.
  B. Focusing in areas not audited last year.
  C. Factoring in management requests.
  D. Focusing on those risks highlighted by the external auditor.
  B. Focusing in areas not audited last year.

• Question 985:

  An auditor analyzed a payroll system's data files for unusual activity, such as excessive overtime hours, unusual fluctuations in pay rates, and excessive vacation time. The application controls being verified by this analysis are:

  A. Edit and validation controls.
  B. Rejected and suspense item controls.
  C. Controls over update access to the database.
  D. Programmed balancing controls.
  A. Edit and validation controls.

• Question 986:

  When establishing a quality assurance and improvement program, the chief audit executive should ensure the program is designed to accomplish which of the following objectives?

  1.Add value.

  2.Improve operations.

  3.Provide assurance that the internal audit activity conforms with the Standards.

  4.Provide assurance that the internal audit activity conforms with the IIA Code of Ethics.

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

• Question 987:

  The board has asked the internal audit activity (IAA) to be involved in the organization's enterprise risk management process. Which of the following activities is appropriate for IAA to perform without safeguards?

  A. Coach management in responding to risks.
  B. Develop risk management strategies for board approval.
  C. Facilitate identification and evaluation of risks.
  D. Evaluate risk management processes.
  D. Evaluate risk management processes.

• Question 988:

  Which of the following sampling techniques is typically used when an internal auditor wants to test a large sample for fraud?

  A. Stratified sampling.
  B. Haphazard sampling.
  C. Probability-proportional-to-size sampling.
  D. Discovery sampling.
  A. Stratified sampling.

• Question 989:

  When performing a preliminary process risk assessment, which action should be taken to determine the likelihood of an employee paying unapproved invoices?

  A. Discuss the accounts payable process with the organization's external auditor.
  B. Review supporting documentation of paid invoices for evidence of approval to pay.
  C. Review benchmarks related to the accounts payable process in similar organizations.
  D. Discuss the accounts payable process with the accounts payable manager.
  B. Review supporting documentation of paid invoices for evidence of approval to pay.

• Question 990:

  Which of the following internal audit activities is performed in the design evaluation phase?

  A. The internal auditor reviews prior audits and workpapers.
  B. The internal auditor identifies the controls over segregation of duties.
  C. The internal auditor checks a process for completeness.
  D. The internal auditor communicates the audit results to management.
  B. The internal auditor identifies the controls over segregation of duties.