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In order to prepare for the IIA-CIA-Part2 exam, candidates should review the exam content outline provided by the IIA and study relevant materials, such as the IIA's Practice Advisory series and other industry publications. Additionally, candidates may consider attending training courses or workshops offered by the IIA or other professional organizations.
NEW QUESTION # 99
Which of the following best describes the primary concern of the audit manager upon review of engagement working papers of an auditor?
- A. To ensure that the work papers create background for subsequent reviews.
- B. To ensure that as part of the documentation the auditor collected original documents that can corroborate the audit findings.
- C. To ensure adequate control over the custody of working papers is exercised by the auditor.
- D. To ensure that the audit programs are followed by the auditor.
Answer: D
Explanation:
Section: Volume C
NEW QUESTION # 100
White planning an audit engagement of a procurement card activity. which of the following actions should an internal auditor take to denary relevant risks and controls?
- A. Develop the scope and objectives of the engagement
- B. Meet with the procurement card program administrator
- C. Determine how many cardholders exceeded their daily limit.
- D. Compare card transaction types against procurement card policy guidelines.
Answer: B
NEW QUESTION # 101
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.
- A. III only.
- B. I only.
- C. I and III only.
Verify that the change orders were properly approved by management. - D. I and II only.
Answer: D
NEW QUESTION # 102
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. Discovery sampling
- C. Probability-proportional-to-size sampling
- D. Haphazard sampling
Answer: B
NEW QUESTION # 103
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. Evaluate risk management processes.
- B. Coach management in responding to risks.
- C. Develop risk management strategies for board approval.
- D. Facilitate identification and evaluation of risks.
Answer: A
NEW QUESTION # 104
A key to effective benchmarking in a consulting engagement is identifying the issues that can be:
- A. Measured and controlled by the engagement client.
- B. Discussed with the board or audit committee.
- C. Reviewed by all internal audit staff members.
- D. Shared with all internal audit customers.
Answer: A
NEW QUESTION # 105
According to IIA guidance, which of the following is true when the internal audit activity is asked to investigate potential ethics violations in a foreign subsidiary?
- A. Communication of any internal ethics violations to external parties may occur with appropriate safeguards.
- B. Local law enforcement should be involved as they are more familiar with the applicable local laws.
- C. Cultural impacts are less critical where the organization practices uniform polices around the globe.
- D. Cross-cultural differences should always be handled by the staff of the same cultural background.
Answer: A
Explanation:
Section: Volume E
NEW QUESTION # 106
Which of the following is not likely to be included as an audit step when assessing vendor performance policies?
- A. Determine whether the quality of the goods purchased from the vendors has been satisfactory.
- B. Determine whether the balances owed to vendors are correct.
- C. Determine whether agreed-upon lot sizes were sent by vendors.
- D. Determine whether only authorized items were received from vendors.
Answer: B
NEW QUESTION # 107
According to the Standards, which of the following would have the least direct interest in the draft report of a compliance review of the purchasing function?
- A. Audit committee.
- B. Purchasing manager.
- C. Director of finance.
- D. Purchasing staff.
Answer: A
NEW QUESTION # 108
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 corporate performance reporting and benchmarking.
- D. Review of the external auditor's risk assessment.
Answer: C
NEW QUESTION # 109
Which of the following would cause a company's accounts receivable turnover ratio to decrease steadily over a three-year period?
- A. Invoices provided on a weekly rather than a monthly basis.
- B. A more liberal credit policy.
- C. An increase in the discount offered for early payment.
- D. Increased cash sales.
Answer: B
NEW QUESTION # 110
The scope of a consulting engagement performed by internal auditors should:
- A. Exclude areas that might be the subject of subsequent assurance engagements.
- B. Be sufficient to address the objectives agreed upon with the client.
- C. Be limited to activities within the current operating period.
- D. Be preapproved in conjunction with the annual plan of consulting engagements.
Answer: B
NEW QUESTION # 111
Which of the following statements describes an engagement planning best practice?
- A. The engagement plan includes the expected distribution of the audit results, which should be kept confidential until the audit report is final.
- B. Engagement planning activities include setting engagement objectives that align with audit client's business objectives.
- C. If the engagement subject matter is not unique, it is not necessary to outline specific testing procedures during the planning phase.
- D. It is best to determine planning activities on a case-by-case basis because they can vary widely from engagement to engagement.
Answer: B
NEW QUESTION # 112
An auditor decides to vouch a sample of ledger entries back to their original documentation. In terms of whether all transactions had been recorded, this test would be:
- A. Irrelevant to the completeness objective.
- B. A more timely test of completeness than evidence from interviews.
- C. A more biased test of completeness than evidence from interviews.
- D. Relevant to the completeness objective.
Answer: A
NEW QUESTION # 113
When conducting a performance appraisal of an internal auditor who has been a below-average performer, it is not appropriate to:
- A. Use generalizations.
- B. Notify the internal auditor of the upcoming appraisal several days in advance.
- C. Document the appraisal.
- D. Use objective, impartial language.
Answer: A
NEW QUESTION # 114
An internal auditor is conducting tests to determine if an organization is in compliance with its payment approval policies. After reviewing a sample of vouchers selected, the internal auditor concluded that there were indicators of fraud. Which of the following would be the most appropriate method to expand the audit test to achieve the audit objective?
I.Validate the completeness of the accounts payable files.
II.
Examine the sample of vouchers in greater detail.
III.
Increase the number of vouchers in the sample.
IV.
Broaden the scope of the examination to include credits received by accounts payable.
- A. I, II, and IV only.
- B. II and III only.
- C. I and II only.
- D. I, III, and IV only.
Answer: B
NEW QUESTION # 115
Which of the following performance criteria would be most useful when measuring the performance of a customer service desk?
- A. The percentage of customer issues resolved within 24 hours.
- B. The number of customer complaints recorded per day.
- C. The percentage of total customers served per day.
- D. The number of customer inquiries recorded per day.
Answer: A
Explanation:
Section: Volume A
NEW QUESTION # 116
Which of the following data sources would provide the least valid data for an audit of a retail store's customer service?
- A. Interviews of randomly selected service personnel regarding the quality of service that they provide.
- B. A graph of customer service training across stores, comparing training with overall levels of service satisfaction.
- C. A random survey of customer satisfaction given to customers as they leave the store.
- D. A graph that compares staffing levels for selected times with store traffic (number of customers) over the same time period.
Answer: A
Explanation:
Section: Volume C
NEW QUESTION # 117
Which of the following will be an appropriate course of action when an auditor disagrees with a client about a well-documented audit finding?
- A. Address the issue with senior management and the board for resolution prior to issuing the final report.
- B. Include both the audit finding and the client's position in the audit report.
- C. Defer reporting the item and plan to perform more detailed work during the next audit.
- D. Change the finding so that it is acceptable to the client.
Answer: B
NEW QUESTION # 118
An auditor decides to perform an inventory turnover analysis for both raw materials inventory and finished goods inventory. The analysis would be potentially useful in:
1. Identifying products for which management has not been attuned to changes in market demand.
2. Identifying potential problems in purchasing activities.
3. Identifying obsolete inventory.
- A. I and II only
- B. III only
- C. II and III only
- D. I, II, and III
Answer: D
NEW QUESTION # 119
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