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The IIA IIA-CIA-Part2 exam is administered by the Institute of Internal Auditors (IIA), a global professional organization that is dedicated to advancing the internal audit profession. The IIA has been providing certification programs and training for internal auditors for over 70 years, and the IIA-CIA-Part2 exam is one of its most popular certification exams.
NEW QUESTION # 109
According to IIA guidance, which of the following factors should the auditor in charge consider when determining the resource requirements for an audit engagement?
- A. The number, experience, and availability of audit staff as well as the nature, complexity, and time constraints of the engagement.
- B. The appropriateness and sufficiency of resources and the ability to coordinate with external auditors.
- C. The number, proficiency, experience, and availability of audit staff as well as the ability to coordinate with external auditors.
- D. The appropriateness and sufficiency of resources as well as the nature, complexity, and time constraints of the engagement.
Answer: D
NEW QUESTION # 110
According to IIA guidance, organizations have the most influence on which element of fraud?
- A. Rationalization.
- B. Incentives.
- C. Opportunity.
- D. Pressure.
Answer: C
Explanation:
According to the Institute of Internal Auditors (IIA) guidance, organizations have the most influence over the
"opportunity" aspect of the fraud triangle. The fraud triangle consists of three elements: pressure, opportunity, and rationalization. While pressure and rationalization are largely influenced by personal and external factors beyond the organization's direct control, opportunity refers to the circumstances that allow fraud to occur, which can be directly managed and controlled by the organization through internal controls, policies, and procedures. References: = IIA's "Managing the Business Risk of Fraud: A Practical Guide" and the IIA's Practice Guide on "Internal Audit's Role in Preventing and Detecting Fraud".
NEW QUESTION # 111
Which of the following techniques could be used to evaluate the effectiveness of changes to the operation of a computer help line?
- A. Baseline measurements.
- B. Benchmarking.
- C. Quality circles.
- D. Walk-throughs.
Answer: A
Explanation:
Section: Volume B
NEW QUESTION # 112
An internal auditor notes that employees continue to violate segregation-of-duty controls in several areas of the finance department, despite previous audit recommendations. Which of the following recommendations is the most appropriate to address this concern?
- A. Recommend rotating finance staff in this area.
- B. Recommend additional segregation-of-duty reviews.
- C. Recommend that management address these concerns immediately.
- D. Recommend appropriate awareness training for all finance department staff.
Answer: D
NEW QUESTION # 113
Which of the following is true of engagement recommendations?
I. Specific suggestions for implementation must be included.
II. The internal auditor's observations and conclusions may serve as the basis.
III. Actions to correct existing conditions or improve operations may be included.
IV. Approaches to correcting or enhancing performance may be suggested.
- A. I only
- B. II, III, and IV only
- C. III only
- D. I, III, and IV only
Answer: B
NEW QUESTION # 114
Which of the following would cause a company's accounts receivable turnover ratio to decrease steadily over a three-year period?
- A. A more liberal credit policy.
- B. Invoices provided on a weekly rather than a monthly basis.
- C. An increase in the discount offered for early payment.
- D. Increased cash sales.
Answer: A
NEW QUESTION # 115
An auditor used a questionnaire during an interview to gather information about the nature
of credit sales processing. The questionnaire did not cover some pertinent information offered by the person being interviewed, and the auditor did not document the potential problems for further investigation.
The primary deficiency with the above process is that:
- A. The engagement program was incomplete.
- B. A questionnaire was used in a situation where a structured interview should have been used.
- C. Using a questionnaire precludes the auditor from documenting other information.
- D. The auditor failed to consider the importance of the information offered.
Answer: D
Explanation:
Topic 2, Volume B
NEW QUESTION # 116
After issuance of the engagement final communication for an audit of an organization's accounts payable function, which of the following should be sent satisfaction surveys?
I. Manager of disbursements.
II. Controller.
III. Chief operating officer.
IV. Audit committee members.
- A. I and II only
- B. I only
- C. II and III only
- D. II, III, and IV only
Answer: A
Explanation:
Section: Volume B
Explanation/Reference:
NEW QUESTION # 117
Management requested internal audit consulting services. During fieldwork significant control issues were identified by the internal audit team. Which of the following is an appropriate response from the chief audit executive?
- A. Mutually agree with the engagement client on corrective actions
- B. End the consulting engagement and report the results to management as planned
- C. Report the significant control issues to senior management and the board and recommend corrective action
- D. Focus on the consulting engagement and schedule an assurance engagement next to address the control issues
Answer: C
Explanation:
When significant control issues are identified during a consulting engagement, it is the responsibility of the chief audit executive to ensure that these issues are communicated to senior management and the board. This ensures that the organization is aware of the risks and can take corrective action. Consulting engagements should not overshadow the priority of addressing critical control issues that may affect the organization's risk profile. Reference:
"International Standards for the Professional Practice of Internal Auditing" (IIA Standards)
"Internal Auditing: Assurance & Advisory Services" (The Institute of Internal Auditors)
NEW QUESTION # 118
According to IIA guidance, which of the following strategies would add the least value to the achievement of the internal audit activity's (IAA's) objectives?
- A. Establish a format and frequency for IAA reporting that is appropriate and aligns with the organization's governance structure.
- B. Use the results of IAA engagement and advisory reporting to guide current and future internal audit activities.
- C. Establish a periodic review of monitoring and reporting processes to help ensure relevant IAA reporting.
- D. Align organizational activities to internal audit activities and measure according to the approved IAA performance measures.
Answer: D
Explanation:
While aligning organizational activities to internal audit activities and measuring according to approved IAA performance measures is important, it adds the least direct value to achieving the IAA's objectives compared to the other strategies. Establishing periodic reviews, using engagement results to guide future activities, and ensuring the format and frequency of IAA reporting align with the organization's governance structure are all more directly impactful strategies. References: = IIA Standard 1300 - Quality Assurance and Improvement Program and IIA Standard 1320 - Reporting on the Quality Assurance and Improvement Program.
NEW QUESTION # 119
During a systems development audit, software developers indicated that all programs were moved from the development environment to the production environment and then tested in the production environment. What should the auditor recommend?
1. Implement a test environment to ensure that testing is not performed in the production environment.
2. Require developers to move modified programs from the development environment to the test environment and from the test environment to the production environment.
3. Eliminate access by developers to the production environment.
- A. I only
- B. III only
- C. I and III only
- D. I and II only
Answer: C
NEW QUESTION # 120
According to the International Professional Practices Framework, which of the following statements is correct regarding the communication of audit results?
I.Summary reports may be issued separately from or in conjunction with the final report.
II.
Interim reports may be written or oral.
III.
Detailed reports should always be issued to the audit committee.
IV.
Interim reports should be used to communicate information which requires immediate attention.
- A. I and III only.
- B. II and IV only.
- C. I, II, III, and IV.
- D. I, II, and IV only.
Answer: D
NEW QUESTION # 121
Which of the following procedures would be most helpful in providing additional evidence when an auditor suspects that an unidentified employee is submitting and approving invoices for payment?
- A. Use generalized audit software to identify invoices from vendors with post office box numbers or other unusual features. Select a sample of those invoices and trace to supporting documents such as receiving reports.
- B. Select a sample of invoices paid during the past month and trace them to appropriate vendor accounts.
- C. Select a sample of payments made during the year and investigate each one for approval.
- D. Select a sample of receiving reports representative of the period under investigation and trace to approved payment. Note any items not properly processed.
Answer: A
NEW QUESTION # 122
According to IIA guidance which of the following statements is true regarding heat maps?
- A. A heat map sets impact to have higher priority than likelihood.
- B. A heat map sets likelihood to have higher priority than impact.
- C. A heat map recognizes that the priority of impact and likelihood can vary.
- D. A heat map recognizes impact and likelihood as equally important
Answer: C
Explanation:
According to IIA guidance, heat maps are tools used in risk assessment that visually represent the severity of risks by plotting them on a matrix based on their likelihood and impact. Heat maps are flexible and can be adjusted to prioritize either likelihood or impact depending on the specific context and the organization's risk appetite and tolerance. This recognition that the priority of impact and likelihood can vary allows for a more nuanced and tailored risk assessment approach.
Reference:
IIA Practice Guide: Assessing the Risk Management Process
IIA Standard 2120: Risk Management
NEW QUESTION # 123
Which role is not considered a change agent when an organization wants to implement structural changes?
- A. Shareholder.
- B. Independent consultant.
- C. Senior management.
- D. Line management.
Answer: A
NEW QUESTION # 124
Which of the following conditions is the strongest indicator of possible fraud?
- A. Independent reconciliations of subsidiary to general ledgers that are not always completed on a timely basis.
- B. A condition of excess manufacturing waste material.
- C. An assistant treasurer who refuses to take vacations.
- D. A manager who is often over budget at the end of a reporting period.
Answer: C
NEW QUESTION # 125
Upon concluding the engagement fieldwork an internal auditor discusses the audit findings with operational management There is a greater likelihood that the auditor will obtain a responsive action plan from management when both parties agree on which of the following attributes of the audit finding?
- A. Effect
- B. Condition
- C. Cause
- D. Criteria
Answer: A
Explanation:
To obtain a responsive action plan from management, the auditor is most likely to achieve this when both parties agree on the "Effect" attribute of the audit finding. The "Effect" refers to the impact or potential impact of the identified issue on the organization's operations, objectives, or risk profile. When management and the auditor agree on the significance and consequences of the finding, there is a shared understanding of the urgency and importance of addressing the issue. This alignment increases the likelihood that management will develop and commit to an effective action plan to remediate the finding.
References:
* IIA Practice Guide: "Formulating and Expressing Internal Audit Opinions"
* COSO Internal Control - Integrated Framework
NEW QUESTION # 126
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. Submission of fraudulent expense reports.
- B. An ineffective customer service department.
- C. Check tampering by an employee.
- D. Poor controls in the invoice approval processes.
Answer: C
Explanation:
Section: Volume A
NEW QUESTION # 127
Which of the following would be the most important reason for the chief audit executive (CAE) to use inputs from management strategy to update the audit universe?
- A. The CAE wants to cover management planned activities for the upcoming year in the audit plan.
- B. The CAE wants to determine internal audit resourcing requirements to cover the organization's major processes and activities over time.
- C. The audit charter requires the CAE to update the audit universe before embarking on the selection of potential audit engagements.
- D. The CAE wants to consider the organization's strategic plan including attitude toward risk and the degree of difficulty to achieving planned objectives.
Answer: D
Explanation:
Section: Volume D
NEW QUESTION # 128
An audit of an organization's fulfillment department discovered that problems in the order processing system led to a significant number of orders being fulfilled multiple times. During the exit conference, the head of the department informed the auditors that the processing system would be enhanced within six months to correct the problems. Which course of action should the chief audit executive follow?
- A. Adjust the scope of the next scheduled audit to determine that the problems have been resolved.
- B. Meet with the audit committee to determine the appropriate follow-up action.
- C. Assess the status of corrective action in a follow-up engagement in six months.
- D. Monitor the status of corrective action and schedule a follow-up engagement when appropriate.
Answer: D
Explanation:
Section: Volume C
NEW QUESTION # 129
An organization has an opening for an entry-level internal audit position. When interviewing for the position, which of the following is the least important skill for an entry-level internal auditor?
- A. Conflict resolution skills.
- B. Time management skills.
- C. Interpersonal skills.
- D. Communication skills.
Answer: A
Explanation:
Section: Volume D
NEW QUESTION # 130
While performing fieldwork for an assurance engagement, a member of the internal audit team identified a key control that was not identified during the planning phase of the engagement Which of the following actions by the internal auditor would be most appropriate?
- A. Discuss the control with management of the area under review and seek their approval prior to including the control in the current audit engagement
- B. Proceed with the current audit work program because the engagement scope has already been finalized but plan to address the newly identified control as part of the follow up engagement
- C. Promptly adjust the audit work program to include tests that address the newly identified control and notify the other audit team members of the change
- D. Adjust the audit work program to account for the new control, but only with approval from the engagement supervisor
Answer: D
NEW QUESTION # 131
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