IIA-CIA-Part2 Practice Exam Questions with Answers Practice of Internal Auditing Certification

When me internal audit activity does not have sufficient time to complete its usual root cause analysis which c4 the following is most appropriate?

To compete in the global market, an organization is restructuring and consolidating many of its divisions. Prior to the consolidation, senior management requested assistance from tie internal audit activity. Which of the following consulting services would be most appropriate in this situation?

In which of the following situations has an internal audit of obtained physical evidence?

An internal auditor suspects that employee turnover is unusually high at the organization's primary manufacturing plant To investigate this potential issue which of the following analytical approaches is the auditor likely to use?

An internal auditor receives a document displaying all the steps of a process and the path taken as transactions flow between each step of the process How is the internal auditor most likely to use This document during the engagement?

An internal audit activity is planning its first audit of IT shared services. Which of the following controls would typically be evaluated first?

Which of the following is least likely to help ensure that risk is considered in a work program?

Which of the following is true about surveys?

A code of business conduct should include which of the following to increase its deterrent effect?

1. Appropriate descriptions of penalties for misconduct.

2. A notification that code of conduct violations may lead to criminal prosecution.

3. A description of violations that injure the interests of the employer.

4. A list of employees covered by the code of conduct.

While conducting an audit of a third party's Web-based payment processor, an internal auditor discovers that a programming error allows customers to create multiple accounts for a single mailing address. Management agrees to correct the program and notify customers with multiple accounts that the accounts will be consolidated. Which of the following actions should the auditor take?

1. Schedule a follow-up review to verify that the program was corrected and the accounts were consolidated.

2. Evaluate the adequacy and effectiveness of the corrective action proposed by management.

3. Amend the scope of the subsequent audit to verify that the program was corrected and that accounts were consolidated.

4. Submit management's plan of action to the external auditors for additional review.

An internal auditor recommended that an organization implement computerized controls in its sales system in order to prevent sales representatives from executing contracts in excess of their delegated authority levels A follow-up review found that the sales system had not been modified, but a process had been implemented to obtain written approval by the vice president of sales for all contracts in excess of S1 million The chief audit executive (CAE) would be justified in reporting this situation to the organization's board under which of the tollowing circumstances'?

1. In the opinion of the CAE the level of residual risk assumed by senior management is too high

2. Testing of compliance with the new process finds that all new contracts in excess of $1 million have been approved by the vice president of sales

3. The cost of modifying the sales system to include a preventive control is less than S100.000

Acceding to IIA guidance, which of the following statements is true regarding the risk assessment process performed by the internal audit activity?

Which of the following items, included in the preliminary audit communication would be most useful for management to formulate action plans in response to audit recommendations?

According to IIA guidance, which of re following actions should the internal auditor take immediately after having considered fraud scenarios and identified and prioritized fraud risks?

The internal audit activity has become aware of public complaints regarding the sales practices of telephone marketing personnel in a large organization. The internal auditors decide to review a sample of all complaints within the last three months to ensure they are reflective of current marketing practices. Which of the following best describes this sampling technique?

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.

In an organization with a large internal audit activity that has several audit teams performing engagements simultaneously which of the following tasks is an engagement supervisor most likely to perform during the planning phase of a new engagement?

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.

What is the purpose of an internal control questionnaire?

A chief audit executive (CAE) is determining which engagements to include on the annual audit plan. She would like to consider the organization's attitude toward risk and the degree of difficulty in achieving objectives. Which of the following resources should the CAE consult?

According to IIA guidance, which of the following reflects a valid principle for the internal audit activity to rely on the work of internal or external assurance providers?

The chief audit executive (CAE) of a small internal audit activity (IAA) plans to test conformance with the Standards through a quality assurance review. According to the Standards, which of the following are acceptable practice for this review?

1. Use an external service provider.

2. Conduct a self-assessment with independent validation.

3. Arrange for a review by qualified employees outside of the IAA.

4. Arrange for reciprocal peer review with another CAE.

Which of the following should be included in a privacy audit engagement?

1. Assess the appropriateness of the information gathered.

2. Review the methods used to collect information.

3. Consider whether the information collected is in compliance with applicable laws.

4. Determine how the information is stored.

An organization s inventory is stored m multiple warehouses. During an inventory audit which of the following activities would most benefit from the use of computerized audit tools?

According to an internal audit observation, the organization’s rules of record management require all contracts to be registered and stored in a specific electronic system. One subsidiary has thousands of client contracts on paper, which are kept in the office because there are not enough assistants to scan the contracts into the system. Which of the following component should be added to this observation?

An organization has a health and safety division that conducts audits to meet regulatory requirements. The chief health and safety officer reports directly to the CEO. Which of the following describes an appropriate role for the chief audit executive (CAE) with regard to the organization's health and safety program?

An internal auditor for a regional bank suspects that the head of commercial lending has been granting loans without the required collateral Which of the following sampling techniques will be most effective for investigating the auditor's suspicion?

According to IIA guidance which of the following best describes reliable information?

An organization is experiencing a significant risk that threatens its financial well-being Senior management requested that the chief audit executive (CAE) meet with them to discuss the risk. Which of the following would best describe the CAE's responsibility at the meeting?

The engagement supervisor would like lo change the audit program's scope poor to beginning fieldwork According to IIA guidance before any change is implemented what is the most important action that should be undertaken?

According to IIA guidance which of the following statements is true regarding the annual audit plan?

Management testimony of improper segregation of duties in the cash receipt process can be considered which of the following?

An internal audit manager is planning a contract compliance audit Which of the following should be done prior to developing the audit work program?

Which of the following is a disadvantage of using flowcharts during a risk assessment?

If observed during fieldwork by an internal auditor, which of the following activities is least important to communicate formally to the chief audit executive?

According to IIA guidance which of the following represents sufficient information?

Which of the following situations would justify the removal of a finding from the final audit report?

According to IIA guidance, which of the following statements are true regarding the internal audit plan?

1. The audit plan is based on an assessment of risks to the organization.

2. The audit plan is designed to determine the effectiveness of the organization's risk management process.

3. The audit plan is developed by senior management of the organization.

4. The audit plan is aligned with the organization's goals.

The head of customer service asked the chief audit executive (CAE) whether internal auditors could assist her staff with conducting a risk self-assessment in the customer service department The CAE promised to meet with customer service managers analyze relevant business processes and come up with a proposal Who is most likely to be the final approver of the engagement objectives and scope?

The following is a list of major findings in the executive summary report for an audit of the contract management process

- Noncompliance with contract provisions requiring vendors to obtain insurance policies with indemnity value of not less than $1 million

- Compliance with contract obligations and deliverables is not monitored

- No contract agreement with five vendors providing core services

Which of the following is an appropriate conclusion that can be drawn from these findings?

An engagement work program o of greatest value to audit management when which of the following is true?

Where should internal auditor focus their attention when identify and assessing key risks during the planning stage of an assurance engagement?

An internal auditor is analyzing sates records and is concerned whether a transaction is recorded in the coned period. The accounting manager explains that the external auditor approved the records and produces an email from the external audit team leader. How should tie internal auditor respond?

An internal auditor develops an engagement observation related to an organization's accumulation of large travel advances. The auditor observes that the organization's procedures do not require justification for travel advances greater than a specific amount Which of the following best describes the organization's procedures?

A chief audit executive (CAE) reviews the supervision of an internal audit engagement Which of the following would most likely assure the CAE that the engagement had adequate supervision?

An organization's board would like to establish a formal risk management function and has asked the chief audit executive (CAE) to be involved in the process. According to IIA guidance, which of the following roles should the CAE not undertake?

Which of the following describes (he primary reason why a preliminary risk assessment is conducted during engagement planning?

According to the IIA guidance, which of the following foes the engagement work test in a review in a review of an organization al process?

An organization recently acquired a subsidiary in a new industry, and management asked the chief audit executive (CAE) to perform a comprehensive audit of the subsidiary prior to recommencing operations The CAE is unsure her team has the necessary skills and knowledge to accept the engagement According to IIAguidance, which of the following responses by the CAE would be most appropriate?