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Passing the IIA-CIA-Part2 exam is a significant achievement for individuals seeking a career in internal auditing. Practice of Internal Auditing certification demonstrates that the candidate has a thorough understanding of the practice of internal auditing and is capable of applying their knowledge and skills in real-world situations. Moreover, the certification is recognized globally and is highly valued by employers, making it an excellent investment for individuals looking to advance their careers in internal auditing.
IIA-CIA-Part2 certification exam is highly respected in the internal auditing profession and is recognized globally. Practice of Internal Auditing certification provides individuals with a competitive edge when seeking employment opportunities in the field of internal auditing. Practice of Internal Auditing certification helps individuals enhance their skills and knowledge in the profession, which can lead to better job prospects and career advancement.
To be eligible for the IIA-CIA-Part2 exam, candidates must have successfully completed the IIA-CIA-Part1 exam and meet the educational and professional requirements set by the IIA. IIA-CIA-Part2 exam consists of 100 multiple-choice questions and is administered through a computer-based testing system. Candidates have four hours to complete the exam, and a passing score of 600 or higher is required to earn the certification. The IIA-CIA-Part2 exam is a challenging and rigorous exam that requires candidates to have a deep understanding of the principles and practices of internal auditing. However, achieving this certification can open up many opportunities for career advancement and professional development in the field of internal auditing.
NEW QUESTION # 144
An internal auditor is assigned to validate calculations on the organization's building application As pad of the test the internal auditor is required to use an automated audit tool to simulate transactions for testing. Which of the following would most appropriately be used for this purpose?
- A. Audit expert systems
- B. Generalized audit software.
- C. Utility software
- D. integrated test facilities
Answer: D
NEW QUESTION # 145
An internal auditor is conducting a review of the procurement function and uncovers a potential conflict of interest between the chief operating officer and a significant supplier of IT software development services.
Which of the following actions is most appropriate for the internal auditor to take?
- A. Inform the audit supervisor.
- B. Disregard the potential conflict, because it is outside the scope of the audit assignment.
- C. Investigate the potential conflict of interest.
- D. Inform the external auditors of the potential conflict of interest.
Answer: A
Explanation:
Section: Volume E
NEW QUESTION # 146
An internal auditor is conducting a review of the procurement function and uncovers a potential conflict of interest between the chief operating officer and a significant supplier of IT software development services.
Which of the following actions is most appropriate for the internal auditor to take?
- A. Inform the audit supervisor.
- B. Disregard the potential conflict, because it is outside the scope of the audit assignment.
- C. Investigate the potential conflict of interest.
- D. Inform the external auditors of the potential conflict of interest.
Answer: A
NEW QUESTION # 147
An internal auditor examined a nostatistical sample of open accounts receivable balances and discovered that 10 out of 60 exceeded the approved unseated credit limit threshold defined by the organization's policy What should the auditor document in the workpapers?
- A. The threshold for credit limits defined by the organization's policy is not adequate
- B. Management should perform monthly monitoring of open customer balances
- C. Credit limit over drafts are not monitored in accordance with the organizations policy
- D. Seventeen percent of customers' open balances in the sample exceed their approved unsecured credit rent
Answer: C
NEW QUESTION # 148
Management has asked the internal audit activity to perform an operational audit of a division that recently reported an increase in expenditures in addition to a decrease in profits. However, existing internal audit resources are currently engaged in a legal compliance audit. Which factor would be considered least important in deciding whether resources should be removed from the legal compliance audit to the operational audit?
- A. The increase in expenditures at the division over the past year.
- B. The results of the external auditor's most recent financial audit.
- C. The probability that the legal compliance audit will detect fraud.
- D. The potential for regulatory fines associated with the legal compliance audit.
Answer: B
NEW QUESTION # 149
During an audit of an ethics program, which of the following procedures are most appropriate to evaluate the effectiveness of the program?
* Testing whether corrective actions taken on involved parties breaching the ethics program are adequate.
* Testing whether all employees are mandated through policy to comply with the ethics program.
* Testing whether all employees are required to confirm in writing their compliance with the ethics program.
* Testing through surveys employee's level of understanding and commitment to the ethics program.
- A. 1 and 2 only
- B. 1 and 4 only
- C. 3 and 4 only
- D. 2 and 3 only
Answer: B
Explanation:
Section: Volume C
Explanation/Reference:
NEW QUESTION # 150
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. III, IV, II, V, I.
- B. I, III, IV, II, V.
- C. IV, II, I, III, V.
- D. V, II, IV, I, III.
Answer: C
Explanation:
Section: Volume A
NEW QUESTION # 151
Which of the following should be included in the scope of an audit of a third-party contractor?
1. Budgets and financial forecasts for the project.
2. Contractor's information and control systems.
3. Contractor's financial position.
4. Progress of the project and costs incurred.
- A. 1 and 4 only
- B. 1, 2, and 3 only
- C. 1, 2, 3, and 4
- D. 2, 3, and 4 only
Answer: C
NEW QUESTION # 152
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.
- A. 1, 3, and 4 only
- B. 2 and 4 only
- C. 1, 2, 3, and 4
- D. 1 and 3 only
Answer: C
Explanation:
Section: Volume E
NEW QUESTION # 153
An internal auditor and engagement client are deadlocked over the auditor's differing opinion with management on the adequacy of access controls for a major system. Which of the following strategies would be the most helpful in resolving this dispute?
- A. Disclose the client's differing opinion in the final report.
- B. Escalate the issue to senior management for a decision.
- C. Ask the chief audit executive to mediate.
- D. Conduct a joint brainstorming session with management.
Answer: D
NEW QUESTION # 154
Which of the followings statements describes a best practice regarding assurance engagement communication activities?
- A. A detailed escalation process should be developed during the planning stage of an assurance engagement.
- B. All assurance engagement observations should be communicated to the audit committee.
- C. All assurance engagement observations should be included in the main section of the engagement communication.
- D. During the "communicate" phase of an assurance engagement, it is best to define the methods and timing of engagement communications.
Answer: A
NEW QUESTION # 155
The efficiency of internal audit operations is best enhanced if workpaper standards:
- A. Require supervisors to initial and date each workpaper that they review.
- B. Permit the extent of documentation to vary according to engagement objectives.
- C. Mandate the workpaper retention period.
- D. Allow access to workpapers by external parties if approved by senior management or the audit committee.
Answer: B
NEW QUESTION # 156
Which of the following tests must an internal auditor perform in order to ensure that inbound electronic data interchange (EDI) transactions are received and translated accurately?
I. Computerized tests to assess transaction reasonableness and validity.
II. Review of log books to ensure that transactions are logged upon receipt.
III. Edit checks to identify unusual transactions.
IV. Verification of limitations on the authority of users to initiate specific EDI transactions.
- A. I, II, III, and IV.
- B. I, II, and III only
- C. II and III only
- D. I and IV only
Answer: B
Explanation:
Section: Volume B
NEW QUESTION # 157
When establishing the internal audit activity's annual plan, which of the following would be the best source of potential audit engagement topics?
- A. Recent changes in management objectives.
- B. The organization's budget.
- C. Risk factors utilized in the organization's risk models.
- D. Operations involving cash transactions.
Answer: A
NEW QUESTION # 158
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. 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. Adjust the scope of the next scheduled audit to determine that the problems have been resolved.
Answer: A
NEW QUESTION # 159
Which of the following would be the best audit procedure to use to determine if a division's unusually high sales and gross margin for November and December were the result of fraudulently recorded sales?
- A. Confirm accounts receivable balances with customers.
- B. Trace a sample of shipping documents to related sales invoices to verify proper billing.
- C. Compare sales and gross margin totals with those of the previous ten months and the first month of the following year.
- D. Use regression analysis techniques to estimate the sales and cost of goods sold for November and December.
Answer: A
NEW QUESTION # 160
A consumer electronics company is considering acquiring a small flash memory manufacturer. An internal auditor has been assigned to determine if the manufacturer's accounts payable contain all outstanding liabilities. Which audit procedure is not relevant for this objective?
- A. Verify the period of liability of subsequent cash disbursements using related supporting documentation.
- B. Verify a sample of accounts payable by using related invoices, receiving reports, and purchase orders.
- C. Trace receiving reports issued before the period end to the accounts payable list and vendor invoices.
- D. Send confirmations, including zero-balance accounts, to vendors with whom the manufacturer normally does business.
Answer: B
NEW QUESTION # 161
An auditor-in-charge is preparing her audit team for a consulting engagement at one of the organization's foreign subsidiaries. According to the Standards, which of the following would not be a necessary step prior to beginning the engagement?
- A. Communicate a time frame as well as a contingency plan in the event the engagement may take longer than expected.
- B. Agree, in writing, with the subsidiary's senior management regarding the scope of the engagement.
- C. Verify that none of the audit team worked for the foreign subsidiary within the last year to ensure independence.
- D. Communicate what logistical support will be provided by the subsidiary for the duration of the engagement.
Answer: C
Explanation:
Section: Volume C
NEW QUESTION # 162
During a review of performance measures in an organization's purchasing function, the preliminary survey indicates that most of the measures have been in use for some time. The internal auditor should:
- A. Report that the measures being used are out-of-date and should be improved.
- B. Perform benchmarking in order to verify that the measures being used are meaningful.
- C. Establish the history of the measures and reasons for use.
- D. Review the data that was used to develop the measures.
Answer: B
NEW QUESTION # 163
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.
- A. 1 and 2
- B. 2 and 4
- C. 3 and 4
- D. 1 and 3
Answer: A
NEW QUESTION # 164
The chief audit executive (CAE) of a multinational entity with highly automated and complex operations has just completed the update of the risk-based audit plan. Interviews with management revealed the introduction of new technology and a significant increase in both the number and severity of technology-based risk exposures.
According to the International Professional Practices Framework, which of the following would be the best course of action for the CAE to undertake next?
- A. Develop a detailed audit plan that makes the most efficient use and reallocation of existing internal audit resources.
- B. Begin planning to recruit information technology audit specialists and other expert personnel into the internal audit activity.
- C. Arrange for the outsourcing of some technology intensive audit processes and procedures based on the plan changes.
- D. Evaluate whether appropriate skills and knowledge required to perform the necessary audit work currently exist in the department.
Answer: D
Explanation:
Section: Volume C
NEW QUESTION # 165
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. Four quarters is not a large enough sample on which to base a conclusion.
- C. The auditor should have considered whether the information in the board report was compiled efficiently.
- D. The auditor should have included the scratch paper in the workpapers.
Answer: A
NEW QUESTION # 166
During the development of a purchasing system, an auditor reviewed the payment authorization program. Which of the following actions should the auditor recommend for a situation in which the quantity invoiced is greater than the quantity received?
- A. Issue an exception report.
- B. Pay the amount billed and adjust the inventory account for the difference.
- C. Authorize payment of the full invoice, but maintain an open purchase order record for the missing goods.
- D. Return the invoice to the vendor for correction.
Answer: A
NEW QUESTION # 167
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. Senior management is accountable to the board for monitoring the system of internal controls.
- B. The audit committee, on behalf of the board, has overall responsibility for the risk management process in the organization.
- C. The audit committee should get assurance on the adequacy and effectiveness of the risk management process from the CRO.
- D. The chief audit executive has the mandate to conduct risk assessments and give assurance to the audit committee.
Answer: C
NEW QUESTION # 168
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