Master 2023 Latest The Questions Certified Internal and Pass IIA-CIA-Part2 Real Exam!
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NEW QUESTION # 189
Which two of the following considerations must an internal auditor take into account while planning an audit of an accounting system/application that has been in use for the last five
years?
The level and manner of linkages between the business' mission, objectives, and structure and the accounting system/application.
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Presence or absence of computerized and manual controls that address risks.
Identification of risks at the application level, e.g. availability and security of the
system.
Testing of the system/application for bugs and errors.
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- A. 3 and 4 only.
- B. 1 and 3 only.
- C. 2 and 3 only.
- D. 2 and 4 only.
Answer: C
NEW QUESTION # 190
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. Monitor the status of corrective action and schedule a follow-up engagement when appropriate.
- B. Adjust the scope of the next scheduled audit to determine that the problems have been resolved.
- C. Meet with the audit committee to determine the appropriate follow-up action.
- D. Assess the status of corrective action in a follow-up engagement in six months.
Answer: A
NEW QUESTION # 191
In preparing to facilitate a control self-assessment session, an auditor would be least likely to ensure that:
- A. Background research is completed to familiarize the auditor with relevant issues.
- B. Management is consulted on the issues and priorities.
- C. Key stakeholders are represented in the group.
- D. An independent content expert is available to help settle disagreements.
Answer: D
NEW QUESTION # 192
Which of the following is an appropriate responsibility for the internal audit activity with regard to the organization's risk management program?
- A. Attaining an adequate understanding of the entity's key mitigation strategies.
- B. Identifying and ensuring that appropriate controls exist to mitigate risks.
- C. Ensuring that a proper and effective risk management process exists.
- D. Identifying and managing risks in line with the entity's risk appetite.
Answer: A
NEW QUESTION # 193
Which of the following actions are appropriate for the chief audit executive to perform when identifying audit resource requirements?
1. Consider employees from other operational areas as audit resources, to provide additional audit coverage in the organization.
2. Approach an external service provider to conduct internal audits on certain areas of the organization, due to a lack of skills in the organization.
3. Suggest to the audit committee that an audit of technology be deferred until staff can be trained, due to limited IT audit skills among the audit staff.
4. Communicate to senior management a summary report on the status and adequacy of audit resources.
- A. 2 and 4 only
- B. 1, 2, and 4
- C. 2, 3, and 4
- D. 1 and 3 only
Answer: B
Explanation:
Section: Volume E
NEW QUESTION # 194
CORRECT TEXT
A fast-food company is developing a computer simulation involving arrival time at a drive-through restaurant. The distribution for arrival times is:
Time Single-Digit Random Between Arrivals Probability Number Assigned 1 minute
0.1 0 2 minutes
0.2 1, 2 3 minutes
0.3 3, 4, 5 4 minutes
0.4 6, 7, 8, 9
Six random numbers are selected to represent the arrival of six cars: 1, 6, 9, 0, 5, 6. The mean time between arrivals for these cars, in this run of the simulation model, is:
- A. 4 minutes.
- B. 2 minutes.
- C. 3 minutes.
- D. 1 minute.
Answer: C
NEW QUESTION # 195
According to IIA guidance, which of the following statements best justifies a chief audit executive's request for external consultants to complement internal audit activity (IAA) resources?
- A. A recent benchmarking study found that using external service providers is a common practice of similarly-sized IAAs in other organizations.
- B. Previous work provided by the external service provider has been of great quality and value.
- C. There has been an increase in unanticipated requests for advisory work.
- D. The organization's audit universe is extensive and diverse.
Answer: C
NEW QUESTION # 196
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?
- A. Statistical sampling
- B. Judgmental sampling
- C. Discovery sampling
- D. Random sampling
Answer: D
NEW QUESTION # 197
Which of the following audit planning activities adds the least value in understanding the current risk exposures facing the corporation?
- A. Review of the external auditor's risk assessment.
- B. Review of organizational strategic plans and operational plans.
- C. Review of corporate performance reporting and benchmarking.
- D. Consultation with senior management and the audit committee.
Answer: C
NEW QUESTION # 198
Which of the following is an appropriate documentation of proper engagement supervision?
- A. A supervisor's approval of resources allocated to the engagement
- B. The email exchanges between the audit team and the supervisor.
- C. The supervisor's review notes on engagement workpapers.
- D. A completed engagement workpaper review checklist.
Answer: C
NEW QUESTION # 199
As part of an operational audit, an auditor compared records of current inventory with usage during the prior two-year period and determined that the spare parts inventory was excessive. What step should the auditor perform first?
- A. Determine the effects of a stock-out on the organization's profitability.
- B. Determine whether a clear policy exists for setting inventory limits.
- C. Determine who approved the purchase orders for the spare parts.
- D. Determine whether purchases were properly recorded.
Answer: B
NEW QUESTION # 200
An internal auditor compared the number of human resources professionals per employee with industry standards. This comparison would assist the auditor in evaluating which of the following areas?
- A. Adequacy of controls over hiring new employees.
- B. Degree of compliance with human resources policies.
- C. Sufficiency of controls over payroll rate increases.
- D. Current level of performance of the human resources department.
Answer: D
Explanation:
Section: Volume C
NEW QUESTION # 201
In which of the following populations would the internal auditor most likely choose to use a stratified sampling approach?
- A. Revenue that is earned by an organization through cash receipts or as receivable.
- B. Inventory comprised of the same items stored in different warehouses
- C. Tax reports submitted to meet the requirements of the local taxation authority
- D. Batches of materials that must be confirmed as meeting quality standards
Answer: A
NEW QUESTION # 202
Insurance companies often receive electronic hospitalization claims directly from hospitals. Which of the following control procedures would be most effective in detecting fraud in such an environment?
- A. Use generalized audit software to match the claimant identification number with a master list of valid policyholders.
- B. Develop batch controls over all items received from a particular hospital and process those claims in batches.
- C. Use integrated test facilities to test the accuracy of processing in a manner that is transparent to data processing.
- D. Develop monitoring programs to identify unusual types of claims or an unusual number of claims by demographic class for investigation by the claims department.
Answer: D
NEW QUESTION # 203
Which of the following would be a legitimate action for the internal auditor to take when monitoring audit engagement results?
1. Disregard a certain risk because management and the board accepted the risk in the past.
2. Abdicate the responsibility for a particular risk because it is not part of the audit plan.
3. Obtain agreement from senior management that unresolved audit issues will be reported to the board.
Request corrective action from management in writing.
- A. 1, 2, and 4 only
- B. 3 and 4 only
- C. 2 and 3 only
- D. 1 and 3 only
Answer: B
Explanation:
Section: Volume D
NEW QUESTION # 204
The chief audit executive (CAF) determined that the residual risk identified in an assurance engagement is acceptable. When should this be communicated to senior management?
- A. When management of the area under review has resolved and mitigated the residual risk
- B. Immediately, as residual risk should be communicated as soon as possible
- C. When the residual risk is identified before the engagement is complete.
- D. When the CAE reports the audit outcome to senior management.
Answer: B
NEW QUESTION # 205
An internal auditor collected several employee testimonials Which of the following is the best action for the internal auditor to take before drawing a conclusion?
- A. Ensure the testimonials are well documented
- B. Corroborate testimonials with the results from other soft control techniques
- C. Review the testimonials with the interviewed employees
- D. Substantiate the testimonials with physical or documentary evidence
Answer: B
NEW QUESTION # 206
Which role is not considered a change agent when an organization wants to implement structural changes?
- A. Independent consultant.
- B. Shareholder.
- C. Line management.
- D. Senior management.
Answer: B
NEW QUESTION # 207
What is the most likely source of information for a detailed schedule of a company's insurance policies in force?
- A. The current fiscal year's budget for insurance, together with the beginning balance of the prepaid insurance account.
- B. Original journal entries found in the cash disbursements journal, along with supporting checks processed by the bank.
- C. The files containing insurance policies with various carriers.
- D. Policies and procedures governing insurance coverage.
Answer: C
Explanation:
Section: Volume C
NEW QUESTION # 208
Which of the following situations justifies the release of an interim report to management and the board?
The internal auditor is convinced that the audit observations require immediate attention.
The internal auditor would like to communicate a change in engagement scope for the activity under review.
The internal auditor notes that the engagement may extend over a longer time period.
The audit supervisor believes that issuing interim reports eases supervisory review and controls over working papers.
- A. 2, 3, and 4 only
- B. 2 and 3 only
- C. 1, 2, and 3 only
- D. 1 and 3 only
Answer: C
NEW QUESTION # 209
Which of the following conditions is the strongest indicator of possible fraud?
- A. An assistant treasurer who refuses to take vacations.
- B. A manager who is often over budget at the end of a reporting period.
- C. Independent reconciliations of subsidiary to general ledgers that are not always completed on a timely basis.
- D. A condition of excess manufacturing waste material.
Answer: A
Explanation:
Section: Volume A
NEW QUESTION # 210
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