IIA-CIA-Part2 Exam Dumps Pass with Updated Mar-2022 Tests Dumps
IIA-CIA-Part2 exam questions for practice in 2022 Updated 600 Questions
IIA IIA-CIA-Part2 Exam Syllabus Topics:
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NEW QUESTION 49
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 potential for regulatory fines associated with the legal compliance audit.
- B. The results of the external auditor's most recent financial audit.
- C. The increase in expenditures at the division over the past year.
- D. The probability that the legal compliance audit will detect fraud.
Answer: B
Explanation:
Section: Volume C
NEW QUESTION 50
Which of the following types of contracts would provide the least incentive for a contractor to achieve economy and efficiency?
- A. Indefinite delivery contract.
- B. Lump-sum contract.
- C. Cost-plus contract.
- D. Unit-price contract.
Answer: C
Explanation:
Section: Volume C
NEW QUESTION 51
Which of the following tests must an internal auditor perform in order to ensure that inbound electronic data interchange (EDI) transactions are received and translated accurately?
I. Computerized tests to assess transaction reasonableness and validity.
II. Review of log books to ensure that transactions are logged upon receipt.
III. Edit checks to identify unusual transactions.
IV.
Verification of limitations on the authority of users to initiate specific EDI transactions.
- A. I, II, and III only
- B. II and III only
- C. I and IV only
- D. I, II, III, and IV.
Answer: A
NEW QUESTION 52
While investigating a compromised Web server, an auditor found that the Web server logs had been deleted. The auditor should recommend that the Web server logs be:
- A. Generated and maintained on a separate secure server.
- B. Accessible by administrative users only.
- C. Encrypted to ensure that the logs cannot be deleted.
- D. Restored automatically to the Web server from backup files.
Answer: A
NEW QUESTION 53
Which of the following would be the least desirable criteria against which to judge current operations of an organization's treasury function?
- A. Company policies and procedures delegating authority and assigning responsibilities.
- B. The operations of the treasury function as documented during the last audit engagement.
- C. Finance textbook illustrations of generally accepted good treasury function practices.
- D. Codification of best practices of the treasury function in relevant industries.
Answer: B
NEW QUESTION 54
Which of the following is least likely to vary when conducting audit engagements in different regions of an international organization?
- A. Availability of technology and technical support.
- B. Work schedules and holidays of the individual regions.
- C. Level of workpaper documentation needed to support audit observations.
- D. Application of governmental regulations to business activities.
Answer: C
NEW QUESTION 55
Which of the following documents should the chief audit executive review and approve?
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Workpaper retention policy.
Audit committee meeting minutes.
Internal audit handbook.
Quarterly financial statements.
- A. 1 and 2 only.
- B. 1 and 3 only.
- C. 2 and 4 only.
- D. 1, 3, and 4 only.
Answer: B
NEW QUESTION 56
Which of the followings statements describes a best practice regarding assurance engagement communication activities?
- A. A detailed escalation process should be developed during the planning stage of an assurance engagement.
- B. During the "communicate" phase of an assurance engagement, it is best to define the methods and timing of engagement communications.
- C. All assurance engagement observations should be communicated to the audit committee.
- D. All assurance engagement observations should be included in the main section of the engagement communication.
Answer: A
Explanation:
Explanation/Reference:
NEW QUESTION 57
Which of the following would not be characteristic of control self-assessment implemented by an audit department?
- A. An auditor usually facilitates the discussion during the workshop phase while another records comments for subsequent use.
- B. Auditors and business-unit employees work as a team.
- C. Auditors perform traditional audit tests to identify control weaknesses.
- D. Participants discuss the control weaknesses that hinder the achievement of objectives.
Answer: C
NEW QUESTION 58
If an organization's chief audit executive wants to implement continuous auditing, what is the appropriate order in which key steps should be undertaken?
I. Identify business applications that require access.
II. Implement steps to continuously assess risks and controls.
III. Define objectives of continuous auditing.
IV. Manage and report results.
- A. III, I, II, IV.
- B. II, III, I, IV.
- C. II, I, III, IV.
- D. III, I, IV, II.
Answer: A
Explanation:
Section: Volume A
NEW QUESTION 59
A manager of one of a retailer's several retail outlets is stealing cash from cash sales, recording the sales as accounts receivable, and subsequently writing off the fictitious accounts receivable as bad debts. Which of the following comparisons would be most effective in signaling the possibility of such a fraud?
- A. Bad debt expense as a percentage of sales, compared to that of previous years.
- B. Percentage of past-due accounts receivable, compared to that of previous years.
- C. Percentage of past-due accounts receivable, compared to that of the other outlets.
- D. Bad debt expense as a percentage of sales, compared to that of the other outlets.
Answer: D
NEW QUESTION 60
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. Cross-cultural differences should always be handled by the staff of the same cultural background.
- B. Cultural impacts are less critical where the organization practices uniform polices around the globe.
- C. Local law enforcement should be involved as they are more familiar with the applicable local laws.
- D. Communication of any internal ethics violations to external parties may occur with appropriate safeguards.
Answer: D
Explanation:
Section: Volume E
NEW QUESTION 61
When interviewing an individual suspected of fraud, what type of questions would be asked after the introductory questions?
- A. Assessment questions.
- B. Closing questions.
- C. Informational questions.
- D. Admission-seeking questions.
Answer: C
NEW QUESTION 62
The chief audit executive of a large publicly held bank is using a risk based approach to update the annual audit plan. Which of the following sources of information will have the least impact on the plan?
- A. Regulatory changes impacting capitalization for all publicly traded banks.
- B. Continuous changes in the prime lending rate set by the country's central bank.
- C. The 12 month forecast of commercial property values.
- D. Recent changes to the bank's strategic plan.
Answer: B
NEW QUESTION 63
Which of the following would be the best audit procedure to use to determine if a division's unusually high sales and gross margin for November and December were the result of fraudulently recorded sales?
- A. Compare sales and gross margin totals with those of the previous ten months and the first month of the following year.
- B. Confirm accounts receivable balances with customers.
- C. Trace a sample of shipping documents to related sales invoices to verify proper billing.
- D. Use regression analysis techniques to estimate the sales and cost of goods sold for November and December.
Answer: B
Explanation:
Section: Volume B
NEW QUESTION 64
Which role is not considered a change agent when an organization wants to implement structural changes?
- A. Line management.
- B. Shareholder.
- C. Independent consultant.
- D. Senior management.
Answer: B
NEW QUESTION 65
An organization has a large number of vendors supplying goods to its various branches across the region. The code of conduct statements signed by the employees specify that the employees or their families will not sell goods to the organization. However, during the internal audit of a branch, the internal auditor suspected that some of the employees may be supplying goods to the organization contrary to the code of conduct. The chief audit executive has requested that a thorough review be completed to identify the potential employee vendors.
Of the following tests, it would be least useful to compare [List A] with [List B].
[List A]
[List B]
- A. Addresses of vendors from the vendor database
Addresses of employees from the employee database
D .Vendor names
Employee names - B. Vendor bank account numbers
Employee bank account numbers - C. Dates of payments to vendors
Dates of salary payments to employees
Answer: C
NEW QUESTION 66
In a health care organization the internal audit activity provides overall assurance on governance, risk and control The chief audit executive advises and influences senior management, and the audit strategy leverages the organization's management of risk According to HA guidance which of the following stages of internal audit maturity best describes this organization?
- A. Emerging.
- B. Managed.
- C. Initial.
- D. Infrastructure.
Answer: B
NEW QUESTION 67
An internal audit activity is participating in the due diligence work for an acquisition that a
company is considering. One engagement objective is to determine if the acquisition's accounts payable contain all outstanding liabilities. Which of the following audit procedures would not be relevant for this objective?
- A. Trace receiving reports issued before the period end to the related vendor invoices and accounts payable list.
- B. Select a sample of accounts payable from the accounts payable list and verify the supporting receiving reports, purchase orders, and invoices.
- C. Examine supporting documentation of subsequent (after-period) cash disbursements and verify period of liability.
- D. Send confirmations, including zero-balance accounts, to vendors with whom the company normally does business.
Answer: B
NEW QUESTION 68
The chief audit executive (CAE) notes during review of the final report of an assurance engagement that management has decided to accept the risks of two significant exposures identified by the audit. Which of the following actions by the CAE would be least prudent in these circumstances?
- A. Implement follow-up procedures to monitor the potential impact of those risks.
- B. Meet with the auditor-in-charge to review the conclusions.
- C. Meet with senior management to consider their reasoning for the decision.
- D. Review the working papers and conclusions as to the perceived residual risk.
Answer: A
NEW QUESTION 69
Management requested the chief audit executive (CAE) to include an audit of the organization'shealth and safety program in next year's annual audit plan. However, the internal audit department has no expertise in this area. Which of the following would be the most appropriate action by the CAE?
- A. Meet with management to explain that the audit cannot be undertaken and discuss alternative strategies that can be implemented until internal audit can develop its capability in the area.
- B. Accept the request provided management has conducted a thorough risk assessment prior to the engagement to help guide the audit.
- C. Advise management that compliance audits of this type should only be conducted by the corresponding regulatory agency to ensure independence.
- D. With management's agreement, amend the scope of the audit to ensure that areas examined do not require specialized knowledge and expertise.
Answer: A
NEW QUESTION 70
Which of the following factors should a chief audit executive consider when determining the audit universe?
1. Components of the organization's strategic plan.
2. Inputs from senior management and the board.
3. Views of competitors and business associates.
4. Results of exit interviews with departing employees.
- A. 1, 2, and 4
- B. 2, 3, and 4
- C. 1 and 2 only
- D. 2 and 4 only
Answer: C
Explanation:
Section: Volume E
NEW QUESTION 71
A chief audit executive (CAE) of a major retailer has engaged an independent firm of information security specialists to perform specialized internal audit activities. The CAE can rely on the specialists' work only if it is:
- A. Performed in accordance with the terms of the contract.
- B. Carried out in accordance with the Standards.
- C. Performed under the supervision of the information technology department.
- D. Carried out using standard review procedures for retailers.
Answer: B
Explanation:
Section: Volume B
NEW QUESTION 72
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