[Oct-2026] Pass IIA-CIA-Part2 Exam in First Attempt Updated IIA-CIA-Part2 Exam Questions
Certified Internal Dumps IIA-CIA-Part2 Exam for Full Questions - Exam Study Guide
What are the requirements to take an IIA CIA Part 2 Exam?
To take the IIA CIA Part 2 Exam, you must:
Have a bachelor's degree or greater from an accredited institution OR have three years (36 months) of professional business experience in internal auditing. You can also qualify for one of the IIA certifications if you're a member of a partner association.
Pass the required certification exam(s).
Be able to complete the certification application and attest to your eligibility requirements.
Apply for and obtain endorsement from your local IIA Institute chapter.
NEW QUESTION # 220
An internal auditor discovered a control weakness that needs to be communicated to management. Which of the following is the best method for first communicating the weakness?
- A. Final report, after review by audit management.
- B. Verbal communication during the engagement, followed by the final report issuance.
- C. Draft report, to be reviewed by management just prior to final report issuance.
- D. Preliminary observation document, discussed during the engagement.
Answer: B
Explanation:
* A. Draft report:Delays action on the weakness, which could be addressed sooner.
* B. Preliminary observation document:While helpful, this is not as immediate as verbal communication.
* C. Final report:Waiting until the final report would unnecessarily delay corrective action.
* D. Verbal communication during the engagement, followed by the final report issuance:Correct.
Verbal communication allows immediate management action, with documentation to follow.
CIA Exam Syllabus Reference:
Domain V: Performing Internal Audit Services - Effective Communication of Findings.
NEW QUESTION # 221
An engagement work program o of greatest value to audit management when which of the following is true?
- A. The work program provides more detailed support for the audit report
- B. The work program helps determined the required amount of audit resources
- C. The work program assists the auditor n developing and managing audit tests
- D. The work program helps ensure tie achievement of the engagement objectives
Answer: D
Explanation:
An engagement work program is of greatest value to audit management when it helps ensure the achievement of the engagement objectives. The work program outlines the audit procedures and tests that need to be performed to gather sufficient and appropriate evidence to support the audit findings and conclusions. By aligning the work program with the engagement objectives, auditors can focus their efforts on the most critical areas, ensure that all necessary steps are taken, and ultimately achieve the intended outcomes of the audit.
Reference:
Institute of Internal Auditors (IIA), International Standards for the Professional Practice of Internal Auditing (Standards), Standard 2240 - Engagement Work Program.
NEW QUESTION # 222
To furnish useful and timely information and promote improvements in operations, internal auditors should provide:
- A. Operating management with reports that emphasize general concerns and risks.
- B. Reports that meet the expectations of both operational and senior management.
- C. Senior management with reports that emphasize the operational details of defective conditions.
- D. Information in written form before it is discussed with the engagement client.
Answer: B
Explanation:
Section: Volume C
NEW QUESTION # 223
Which of the following recommendations made by the internal audit activity (IAA) is most likely to help prevent fraud?
- A. A review of password policy compliance found that employees frequently use the same password more than once during a year. The IAA recommends that the access control software reject any password used more than once during a 12-month period.
- B. A review of customer service-level agreements found that orders to several customers are frequently delivered late. The IAA recommends that the organization extend the expected delivery time advertised on its website.
- C. A vacation policy compliance review found that employees frequently leave on vacation before their leave applications are signed by their manager. The IAA recommends that the manager attend to the leave applications in a more timely fashion.
- D. A review of internal service-level agreement compliance in financial services found that requests for information frequently are fulfilled up to two weeks late. The IAA recommends that the financial services unit be eliminated for its ineffectiveness.
Answer: A
Explanation:
Section: Volume E
NEW QUESTION # 224
Management has taken immediate action to address an observation received during an audit of the organization's manufacturing process Which of the following is true regarding the validity of the observation closure?
- A. Valid closure requires assurance from management that the original problem will not recur in the future
- B. Valid closure requires the client lo address not only the condition, but also the cause of the condition
- C. Valid closure of an observation ensures it will be included in the final engagement report
- D. Valid closure requires evidence that ensures the corrected process will function as expected in the future
Answer: D
Explanation:
Valid closure of an audit observation requires evidence that the corrected process will function as expected in the future. This involves not just addressing the immediate condition but also ensuring that the root cause has been addressed and that the implemented corrective actions are sustainable and effective in preventing recurrence. This ensures that the underlying issue has been resolved comprehensively. References:
* The IIA's International Standards for the Professional Practice of Internal Auditing (Standards), Standard 2500 - Monitoring Progress.
* The IIA's Practice Guide on Audit Follow-up.
NEW QUESTION # 225
During the planning phase of an assurance engagement, the internal audit engagement team identifies and evaluates the inherent fraud risks within the procurement function. What should be the engagement team's next step?
- A. Select the appetite level for each inherent fraud risk
- B. Identify and map existing controls to their relevant inherent fraud risks
- C. Detect fraudulent activities in the activity under review for the audited period
- D. Evaluate and respond to residual fraud risks that need to be mitigated
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
The risk assessment process in planning begins with identifying inherent risks (risks without considering controls). The next logical step is to identify and map existing controls to those inherent risks to determine whether they mitigate them effectively. Only after this step can residual risk be assessed. Detecting actual fraud (Option B) is not part of planning. Risk appetite (C) is a management responsibility, not audit's. Option D occurs later after evaluating controls.
NEW QUESTION # 226
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?
- A. The supervisor reviews weekly progress reports from the audit team members
- B. The supervisor reviews and initials internal audit workpapers for the engagement
- C. The supervisor meets periodically with management in the reviewed area to get feedback during the engagement.
- D. The engagement supervisor has an open door pokey for audit team members to discuss concerns
Answer: B
Explanation:
Reviewing and initialing internal audit workpapers ensures that the engagement has adequate supervision. This practice demonstrates that the supervisor has reviewed the work performed by the audit team, verified the accuracy and completeness of the documentation, and provided necessary guidance. It is a critical step in the quality assurance process, ensuring that the audit findings and conclusions are supported by sufficient and appropriate evidence.References:
* Institute of Internal Auditors (IIA), International Standards for the Professional Practice of Internal Auditing (Standards), Standard 2340 - Engagement Supervision.
NEW QUESTION # 227
A senior internal auditor is hired within the internal audit activity for a period of two years before advancing to an operations manager role within the business operations team. When staffing arrangement is being used in this scenario?
- A. Rotational model
- B. Cosourcing agreement
- C. Comer of competence
- D. Career model
Answer: A
Explanation:
The rotational model refers to a staffing arrangement where employees, such as internal auditors, are rotated into different roles within the organization, often for a fixed period. In this scenario, a senior internal auditor is hired within the internal audit activity for two years before transitioning to an operations manager role. This model helps in developing a deeper understanding of the organization, broadening skill sets, and fostering cross-functional expertise. It benefits both the internal audit activity and the broader organization by facilitating knowledge transfer and career development.
The Institute of Internal Auditors (IIA) Practice Guide on " Implementing a Rotational Internal Audit Program
"
IIA Standard 1210 - Proficiency: " Internal auditors must possess the knowledge, skills, and other competencies needed to perform their individual responsibilities. "
NEW QUESTION # 228
An internal audit activity plans its engagements based on an organization-wide risk assessment. According to IIA guidance, which of the following statements is true regarding the required frequency of the risk assessment?
- A. The risk assessment must be performed at least annually.
- B. The risk assessment must be performed at least quarterly.
- C. There is no specific requirement; a risk assessment should be performed as needed to account for changes in the business environment.
- D. The risk assessment must be performed at least once every five years, in alignment with the internal audit activity's quality assurance and improvement program.
Answer: C
Explanation:
According to IIA guidance, there is no specific frequency mandated for conducting organization-wide risk assessments. Instead, the internal audit activity should perform risk assessments as necessary to reflect significant changes in the organization's business environment, risk profile, and operations. This flexibility allows the internal audit activity to remain responsive and relevant in a dynamic risk landscape.
IIA Reference:
IIA Standard 2010: Planning requires the CAE to establish risk-based plans to determine the priorities of the internal audit activity, consistent with the organization's goals. The frequency and timing of risk assessments should be adapted to the organization's changing conditions.
The IIA Practice Guide on Risk Assessment in Audit Planning emphasizes that risk assessments should be updated as needed, particularly when there are significant changes in the organization or external environment.
NEW QUESTION # 229
Productivity statistics are provided quarterly to a company's board of directors. An auditor checked the ratios and other statistics in the four most recent reports. The auditor used scratch paper and copies of the board reports to verify the accuracy of computations and compared the data used in the computations with supporting documents. The auditor wrote a note describing this work for the workpapers and then discarded the scratch paper and report copies. The auditor's note stated:
"The ratios and other statistics in the quarterly board reports were checked for the last four quarters, and appropriate supporting documents were examined. All amounts appear to be appropriate."
In this situation:
- A. The auditor's workpapers are not sufficient to facilitate an efficient review of the auditor's work.
- B. The auditor should have included the scratch paper in the workpapers.
- C. The auditor should have considered whether the information in the board report was compiled efficiently.
- D. Four quarters is not a large enough sample on which to base a conclusion.
Answer: A
NEW QUESTION # 230
According to IIA guidance, which of the following is the least appropriate role for the internal audit activity in the organization's risk management program?
- A. Monitoring the organization's whistle-blower hotline.
- B. Conducting full investigations of suspected fraud.
- C. Assessing the risk of fraudulent activity in the organization.
- D. Providing ethics training sessions to organization staff.
Answer: C
NEW QUESTION # 231
Management testimony of improper segregation of duties in the cash receipt process can be considered which of the following?
- A. Sufficient
- B. Analytical
- C. Relevant
- D. Reliable
Answer: D
NEW QUESTION # 232
An examination of the accounts payable function evidenced multiple findings with respect to segregation of duties. After management's response and action plan are received and documented in the final report, which of the following is most appropriate?
- A. Include the items in the scope of the next scheduled audit of the accounts payable function.
- B. Because management agreed with the findings, no further action is deemed necessary.
- C. Follow up after the applicable changes have been incorporated to validate management's response.
- D. Have an internal audit staff member placed into the accounting department until corrections are made.
Answer: C
Explanation:
After management responds to audit findings and provides an action plan, it is crucial for the internal audit activity to follow up to validate that the promised changes have been implemented and are effective. This follow-up ensures that the issues identified, such as those related to segregation of duties in accounts payable, have been appropriately addressed.
* IIA Standard 2500 - Monitoring Progress:
* This standard requires the internal audit activity to monitor the implementation of management's corrective actions. Following up on audit findings is essential to ensure that the actions taken effectively mitigate the identified risks.
* Validation of Corrective Actions:
* By conducting a follow-up review, the internal audit activity can verify that the changes have been made as planned and assess whether these changes are sufficient to resolve the issues. This process helps maintain the integrity and effectiveness of the internal audit function.
* IIA Practice Advisory 2500-1:
* The advisory emphasizes the importance of follow-up activities to confirm that management's responses to audit recommendations have been implemented as intended.
* Option B (Include in the next scheduled audit): While this is a backup plan, it may delay the validation of corrective actions, allowing potential risks to persist.
* Option C (No further action): This approach is inappropriate because it assumes the problem is resolved without verification, which could lead to unmitigated risks.
* Option D (Placing an auditor in the department): This could compromise the independence of the internal audit function and is not a standard practice.
Detailed Explanation:Why Not Other Options?Conclusion: Option A is correct because it ensures that the internal audit activity fulfills its responsibility to validate that management's corrective actions have been implemented and are effective, aligning with IIA standards on monitoring progress.
NEW QUESTION # 233
An audit observation noted that annual inventory counts of biofuel was not being performed appropriately Fuel yards were not visited and physical amounts of biofuel were not reconciled with accounting data Management of the division understood the issue and promised to resolve the problem When should the internal auditor schedule a follow-up review?
- A. When convenient for both parties
- B. When management has indicated that the issue has been resolved
- C. As soon as possible, no later than two months after the audit
- D. Before financial year end
Answer: C
Explanation:
Strategic sourcing would best assist the CAE in balancing the internal audit activity's needs for technical audit skills, budget efficiency, and staff development opportunities. Strategic sourcing involves using a mix of internal resources, co-sourcing, and outsourcing to optimize the audit function. This approach allows the CAE to leverage external expertise for specialized skills, manage costs effectively, and provide growth opportunities for internal staff.
IIA Standards: 2030 - Resource Management
IIA Practice Guide: Developing the Internal Audit Strategic Plan
NEW QUESTION # 234
An internal auditor was assigned to conduct an inventory control and stock room area engagement. During the audit, the auditor observed that there were some items that have a shelf life expiration date requirement based on a certificate of conformance received with the product. The certificates of conformance are kept on file in the inventory area office and the expiration date is verified at the time the item is taken from stock. The auditor reviewed the items in the stock room and also on the production floor for the expiration dates to see if there was any expired product. All items with a shelf life requirement were found to be within the expiration date requirement. Which of the following recommendations would be appropriate?
- A. Determine the cost of inventory for the items that have a shelf life and apply a new policy regarding inventory levels to be maintained (i.e., minimums, maximums, reorder points etc.).
- B. Take no action, because all the items were within the expiration date requirement, and no corrective action is needed.
- C. Add to the product label a "use by date" line, enter the expiration at the time of receipt, and perform periodic inventory checks.
- D. Permit production staff the access to files where the certificates of conformity are kept, so they can choose the items with the closest expiration date.
Answer: C
NEW QUESTION # 235
Which of the following is the most appropriate approach for the internal audit activity to follow up on management action plans?
- A. Create a tracking system for follow up
- B. Ensure that follow-up activities are performed by the most senior auditor on staff
- C. Delegate follow-up activities to qualified administrative staff within the business unit
- D. Ensure that follow-up activities are performed at least weekly.
Answer: A
NEW QUESTION # 236
Confirmation would be most effective in addressing the existence assertion for:
- A. The addition of a milling machine to a machine shop.
- B. Inventory held on consignment.
- C. Sales of merchandise during the regular course of business.
- D. The granting of a patent for a special process developed by the organization.
Answer: B
Explanation:
Section: Volume C
Explanation/Reference:
NEW QUESTION # 237
According to IIA guidance, which of the following strategies would be the least effective in helping a chief audit executive build a stronger relationship with the board?
- A. Avoid making presumptuous comments without sufficient facts.
- B. Consider formality and tone of communications to ensure they are appropriate.
- C. Minimize instances of ad hoc communications with board members.
- D. Consider the possible repercussions created by commentary on deficiencies.
Answer: C
NEW QUESTION # 238
When a significant finding is noted early during a review of the accounts payable function, which next course of action is best for communicating the issue?
- A. Note the item in the workpapers for inclusion in the final audit report
- B. Call a meeting and discuss me issue with the audit committee
- C. Intern accounting management via an interim memorandum update
- D. Alert the CEO as soon as the issue is discovered
Answer: C
Explanation:
When a significant finding is noted early during a review of the accounts payable function, the best course of action for communicating the issue is to inform internal accounting management via an interim memorandum update. This allows for timely communication and potential early remediation actions, ensuring that management is aware of the issue and can address it promptly before the final audit report is issued.
References:
* The Institute of Internal Auditors (IIA) Standards
* Internal Audit Communication and Reporting Protocols
NEW QUESTION # 239
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?
1. Manager of disbursements.
2. Controller.
3. Chief operating officer.
4. Audit committee members.
- A. II, III, and IV only
- B. II and III only
- C. I only
- D. I and II only
Answer: D
NEW QUESTION # 240
An audit of a Web-based third-party payment processor determined that a programming error enabled customers to create multiple accounts for each mailing address. This caused problems during the processing of credit card transactions. Management agreed to correct the program and notify customers with multiple accounts that the accounts would be consolidated. What should the auditor do in response?
I.Amend the scope of the subsequent audit to verify that the program was corrected and that accounts were consolidated.
II.
Evaluate the adequacy and effectiveness of the corrective action proposed by management.
III.
Schedule a follow-up review to verify that the program was corrected and the accounts were consolidated.
IV.
Do nothing because management has agreed to address the problem.
- A. II and III only.
- B. I and II only.
- C. III only.
- D. IV only.
Answer: A
NEW QUESTION # 241
What would be used to determine the collectability of accounts receivable balances?
- A. Positive accounts receivable confirmations.
- B. The file of related shipping documents.
- C. An aged accounts receivable listing.
- D. Negative accounts receivable confirmations.
Answer: C
NEW QUESTION # 242
An internal auditor is reviewing the accuracy of commission payments by recalculating 100% of the commissions and comparing them to the amount paid. According to IIA guidance, which of the following actions is most appropriate for identified variances?
- A. Document the results and report the overall percentage of variances.
- B. Determine the significance of the variances and investigate causes as needed.
- C. Report all variances to management and request an action plan to remediate them.
- D. Review the results and investigate the cause of all variances.
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract:
Per Standard 2310 - Identifying Information, auditors must evaluate the significance of variances and determine whether further investigation is required. Not every small discrepancy requires full investigation or reporting; the auditor should apply professional judgment to assess materiality, risk, and root cause.
Option B is correct because it balances efficiency with sufficiency. Options A, C, and D either understate or overstate the auditor's responsibility.
NEW QUESTION # 243
A bank is developing an integrated customer information system. The type of audit involvement that would most likely help avoid implementation of a system that does not cover all types of accounts would be:
- A. An access control review.
- B. A design review.
- C. An application control review.
- D. A source code review.
Answer: B
NEW QUESTION # 244
Which of the following actions best describes an internal auditor's use of test data to determine whether an organization's new accounts payable system avoids processing questionable invoices for payment?
- A. Creating an automated tool that monitors the computer program on a daily basis for potential issues that need corrective actions.
- B. Using an automated system that assists internal auditors with automating the risk analysis of the computer program for invoicing
- C. Embedding tools in the computer program to analyze the review processes of invoices for potential issues that may hamper payments
- D. Adding invoices to the computer program to assess the reliability and effectiveness of the review process and whether controls work.
Answer: D
Explanation:
Adding invoices to the computer program to assess the reliability and effectiveness of the review process and whether controls work best describes an internal auditor's use of test data. This approach involves introducing test data into the system to evaluate how well the system processes invoices and whether it effectively identifies and prevents questionable invoices from being processed for payment.
Reference:
IIA Standards: 1220.A2 - Proficiency and Due Professional Care
IIA Practice Guide: Use of Technology in Auditin
NEW QUESTION # 245
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The Internal Audit Engagement certification exam covers a broad range of topics, including internal control and risk management, governance, fraud risk, ethics, and compliance. IIA-CIA-Part2 exam is designed to test the candidate's knowledge of the internal auditing profession and their ability to apply this knowledge in real-world scenarios.
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