[Oct-2021] Verified IIA Exam Dumps with IIA-CIA-Part2 Exam Study Guide
Best Quality IIA IIA-CIA-Part2 Exam Questions DumpExam Realistic Practice Exams [2021]
NEW QUESTION 158
Which of the following statements describes an engagement planning best practice?
- A. If the engagement subject matter is not unique, it is not necessary to outline specific testing procedures during the planning phase.
- B. Engagement planning activities include setting engagement objectives that align with audit client's business objectives.
- C. The engagement plan includes the expected distribution of the audit results, which should be kept confidential until the audit report is final.
- 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 159
Which of the following would most likely contribute to discrepancies between receiving reports and the number of units in a shipment?
- A. Failing to compare the quality of goods received with specifications.
- B. Accepting improper authorization for purchases.
- C. Using inadequate vendor selection procedures.
- D. Indicating the quantities ordered on the receiving department's copy of the purchase order.
Answer: D
NEW QUESTION 160
Which of the following statements regarding the use of external contracted services by the chief audit executive (CAE) is false?
- A. The CAE's responsibility is not impaired by engaging an external expert.
- B. The expert should be directed by the objectives and scope of work.
- C. The external expert could have a prior relationship with the audit client.
- D. The audit report should not disclose the use of contracted services.
Answer: D
Explanation:
Section: Volume D
NEW QUESTION 161
Which of the following is an effective approach for internal auditors to take to improve collaboration with audit clients during an engagement?
1. Obtain control concerns from the client before the audit begins so the internal auditor can tailor the scope accordingly.
2. Discuss the engagement plan with the client so the client can understand the reasoning behind the approach.
3. Review test criteria and procedures where the client expresses concerns about the type of tests to be conducted.
4. Provide all observations at the end of the audit to ensure the client is in agreement with the facts before publishing the report.
- A. 1 and 2 only
- B. 3 and 4 only
- C. 2 and 3 only
- D. 1 and 4 only
Answer: A
NEW QUESTION 162
According to the Standards, which of the following is an attribute when applied to the observations and recommendations contained in the audit report?
- A. Client accomplishments.
- B. Scope statements.
- C. Supportive information.
- D. Effect.
Answer: D
NEW QUESTION 163
Confirmation would be most effective in addressing the existence assertion for:
- A. Inventory held on consignment.
- B. The addition of a milling machine to a machine shop.
- C. The granting of a patent for a special process developed by the organization.
- D. Sales of merchandise during the regular course of business.
Answer: A
NEW QUESTION 164
In a client satisfaction survey for an internal audit engagement, client management should be asked to assess which of the following factors?
I. Audit team's knowledge of the audited area.
II. Usefulness of the audit results.
III. Quality of management of the internal audit activity.
IV.
Clarity of the scope and objectives of the audit engagement.
- A. I and II only
- B. I, III, and IV only
- C. I, II, and IV only
- D. II and IV only
Answer: C
NEW QUESTION 165
Which of the following is a justifiable reason for omitting advance client notice when planning an audit engagement?
- A. Previous management action plans addressing prior internal audit recommendations remain incomplete.
- B. Advance notice may result in management making corrections to reduce the number of potential deficiencies.
- C. The audit engagement has already been communicated and approved through the annual audit plan.
- D. The engagement includes audit assurance procedures such as sensitive or restricted asset verifications.
Answer: D
Explanation:
Section: Volume E
NEW QUESTION 166
During a routine audit of a customer service hotline, an internal auditor noticed that an unusually high number of customer complaints pertained to payments not being applied to the customers' accounts. Which of the following would most likely be the reason for the high volume of complaints?
- A. Check tampering by an employee.
- B. Poor controls in the invoice approval processes.
- C. Submission of fraudulent expense reports.
- D. An ineffective customer service department.
Answer: A
NEW QUESTION 167
Due to a recent system upgrade, an audit is planned to test the payroll process. Which of the following audit objectives would be most important to prevent fraud?
- A. Verify that amounts are correct.
- B. Verify that benefits deductions are accurate.
- C. Verify that recipients are valid employees.
- D. Verify that payments are on time.
Answer: C
NEW QUESTION 168
An organization has adopted an enterprise-wide risk management process and has appointed a chief risk officer (CRO) to manage the process. The board has requested that the audit committee have oversight over the risk management function. Which of the following statements is not true regarding this situation?
- A. The audit committee should get assurance on the adequacy and effectiveness of the risk management process from the CRO.
- B. The audit committee, on behalf of the board, has overall responsibility for the risk management process in the organization.
- C. Senior management is accountable to the board for monitoring the system of internal controls.
- D. The chief audit executive has the mandate to conduct risk assessments and give assurance to the audit committee.
Answer: A
Explanation:
Section: Volume D
NEW QUESTION 169
After the team member who specialized in fraud investigations left the internal audit team, the chief audit executive decided to outsource fraud investigations to a third party service provider on an as needed basis. Which of the following is most likely to be a disadvantage of this outsourcing decision?
- A. Independence.
- B. Familiarity.
- C. Flexibility.
- D. Cost.
Answer: B
NEW QUESTION 170
The most effective way for internal auditors to enhance the reliability of computerized financial and operating information is by:
- A. Determining if information systems provide management with timely information.
- B. Determining if controls over record keeping and reporting are adequate and effective.
- C. Determining if information systems provide complete information.
- D. Reviewing data provided by information systems to test compliance with external requirements.
Answer: B
NEW QUESTION 171
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. Horizontal analysis.
- B. Trend analysis.
- C. Ratio analysis.
- D. Regression analysis.
Answer: D
NEW QUESTION 172
Which of the following conclusions would be appropriate for a beginning auditor performing an audit of a payroll department?
- A. The payroll computer system should be replaced.
- B. The payroll department staff has the appropriate level of skills.
- C. Employee taxes have been deducted at the correct rates, and the taxes have been forwarded to the appropriate government agency.
- D. Although there is insufficient segregation of duties, the impact is mitigated by compensating controls.
Answer: C
NEW QUESTION 173
A manufacturing process could create hazardous waste at several production stages, from raw materials handling to finished goods storage. If the objective of a pollution prevention audit engagement is to identify opportunities for minimizing waste, in what order should the following opportunities be considered?
I. Recycling and reuse.
II. Elimination at the source.
III. Energy conservation.
IV.
Recovery as a usable product Treatment.
- A. IV, II, I, III, V.
- B. I, III, IV, II, V.
- C. V, II, IV, I, III.
- D. III, IV, II, V, I.
Answer: A
NEW QUESTION 174
During an assurance engagement, an internal auditor noted that the time staff spent accessing customer information in large Excel spreadsheets could be reduced significantly through the use of macros. The auditor would like to train staff on how to use the macros. Which of the following is the most appropriate course of action for the internal auditor to take?
- A. The auditor must not perform the training, because any task to improve the business process could impact audit independence.
- B. The auditor must create a new, separate consulting engagement with the business process owner prior to performing the improvement task.
- C. The auditor may proceed with the improvement task without obtaining formal approval, because the task is voluntary and not time-intensive.
- D. The auditor should get permission to extend the current engagement, and with the process owner's approval, perform the improvement task.
Answer: D
NEW QUESTION 175
An organization contracted a third party to construct a new facility that was estimated to cost $25 million. Which of the following is the most pertinent reason for the organization to audit the contractor's records?
- A. The contractor will be paid on a cost-plus basis.
- B. The contract includes a right-to-audit clause.
- C. The estimated cost is high.
- D. The contractor has subcontracted much of the work.
Answer: A
NEW QUESTION 176
Due to the expanded role of internal audit in the organization, the chief audit executive (CAE) of a construction company decides to employ the services of an outsourced audit service provider to augment the internal audit staff. What does the CAE need to consider in determining whether the outsourced audit service provider possesses the necessary knowledge, skills and other competencies to perform an audit engagement?
- A. Specific matters expected to be covered in the engagement communications.
- B. The financial interest that the external service provider may have in the organization.
- C. The extent of other ongoing services the external service provider may be performing for the organization.
- D. The reputation of the external service provider.
Answer: D
Explanation:
Section: Volume D
Explanation/Reference:
NEW QUESTION 177
While preparing the annual audit plan, the newly assigned chief audit executive (CAE) learns that the organization has not yet implemented a risk framework. Which of the following would be the most appropriate action for the CAE to take regarding potential engagements?
- A. Prioritize the engagements that were not done in previous years and schedule them for the upcoming year.
- B. Review all outstanding recommendations from prior audit engagements and focus on them in the upcoming year.
- C. Consult with senior management and the board and make adjustments regarding risk.
- D. Use the previous three-year audit plan to extrapolate potential engagements for the upcoming year's schedule of engagement.
Answer: C
Explanation:
Section: Volume D
NEW QUESTION 178
---
Which of the following would be included in an internal audit department's quality assurance and improvement program?
Ongoing internal assessments of the performance of the internal audit department.
Periodic internal reviews through self-assessments.
Assessments conducted by a qualified external reviewer at least once every five
years.
- A. 2 and 3 only.
- B. 1 only.
- C. 1 and 2 only.
- D. 1, 2, and 3.
Answer: D
NEW QUESTION 179
During a routine audit of a customer service hotline, an internal auditor noticed that an unusually high number of customer complaints pertained to payments not being applied to the customers' accounts.
Which of the following would most likely be the reason for the high volume of complaints?
- A. Check tampering by an employee.
- B. Poor controls in the invoice approval processes.
- C. Submission of fraudulent expense reports.
- D. An ineffective customer service department.
Answer: A
NEW QUESTION 180
Access control software on an organization's mainframe computer records detailed information concerning both successful and unsuccessful log-on attempts to applications. Which of the following audit tools would be best suited to review the access information that has been recorded?
- A. Integrated test facility.
- B. Test data.
- C. Flowcharting.
- D. Generalized audit software.
Answer: D
NEW QUESTION 181
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