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IIA-CIA-Part2 Practice Questions

Internal Audit Engagement

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Question # 136

An internal audit intends to create a risk and control matrix to better understand the organization ' s complex manufacturing process. With which of the following approaches would the auditor most likely start?

Options:

A.  

Assess management responses to key risk exposures

B.  

Analyze the costs and benefits of key controls

C.  

Evaluate the design adequacy of known controls

D.  

Conduct a walk-through of all related activates

Discussion 0
Question # 137

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?

Options:

A.  

Conduct a joint brainstorming session with management.

B.  

Ask the chief audit executive to mediate.

C.  

Disclose the client ' s differing opinion in the final report.

D.  

Escalate the issue to senior management for a decision.

Discussion 0
Question # 138

Due to emerging new technologies that greatly affect the organization, the chief audit executive (CAE) wants to conduct frequent IT audit and is particularly focused on improving the quality of these engagements. Which of the following is the most viable solution for the CAE to ensure that IT audit quality is immediately enhanced and maintained long-term?

Options:

A.  

Each year send a different member of the internal audit staff to an IT audit conference to learn about emerging technologies

B.  

Contract an external IT special to offer advice and consult on IT audits

C.  

Employ an independent external IT specialist to perform IT audits for the first year

D.  

Invite qualified staff from the IT department to serve as guest auditors and lead IT audits

Discussion 0
Question # 139

An internal audit engagement supervisor approved the engagement work program submitted by an internal auditor and concluded that it satisfied engagement objectives. At the end of the engagement, the engagement supervisor reviewed the completed work program and found numerous deficiencies and inconsistencies in the engagement workpapers. Which of the following should be improved in the process of engagement supervision?

Options:

A.  

The supervisor should regularly review the engagement team ' s workpapers throughout the engagement, including raising questions and providing guidance.

B.  

The supervisor should evaluate whether the engagement work program includes audit procedures relevant to engagement objectives.

C.  

The supervisor should thoroughly document all concerns prior to signing off the completed workpapers and finalizing the work program.

D.  

The supervisor should issue a satisfaction questionnaire to management of the activity that was under review to understand the root causes of deficient performances.

Discussion 0
Question # 140

During a consulting engagement an internal auditor wants to determine whether all principal stakeholders are involved in a project. Which tool should the auditor use?

Options:

A.  

RACI (responsible, accountable, consult and inform) chart

B.  

Flowchart

C.  

SWOT{strengths. weaknesses opportunities, and threats) analysis

D.  

Workflow analysis

Discussion 0
Question # 141

According to HA guidance, which of the following statements regarding audit workpapers is true?

Options:

A.  

Audit reports should include the workpapers as a reference for the audit conclusions.

B.  

The internal auditor ' s workpapers are the primary reference for reported control deficiencies.

C.  

Ad-hoc communications with management of the area under review should be excluded from the workpapers.

D.  

Both draft and final versions of workpapers should be saved at the end of the engagement

Discussion 0
Question # 142

The board of directors of a global organization has found an increased number of reported cases of unethical practices since last year. To assist the board in gaining a better understanding of the degree of ethics awareness within the organization, which of the following actions should be undertaken?

Options:

A.  

Request the internal audit activity to perform an ethics-related assurance engagement.

B.  

Offer in-house ethics-related training seminars for employees to attend

C.  

Reaffirm the importance of the organization ' s code of ethics to all employees

D.  

Conduct an organization wide employee survey on ethical practices.

Discussion 0
Question # 143

According to MA guidance, which of the following factors should an internal auditor consider when assessing the likelihood of fraud risk1?

Options:

A.  

The effect on the organization ' s reputation

B.  

Any potential damage to the organization ' s relationship with customers.

C.  

Past fraud allegations and actual occurrences

D.  

The potential and realized financial impacts

Discussion 0
Question # 144

Which of the following would be the most reliable source of documentary evidence?

Options:

A.  

Confirmation letters.

B.  

Remittance advices.

C.  

Policy statements.

D.  

Canceled checks.

Discussion 0
Question # 145

An organization does not have a formal risk management function. According to the Standards, which of the following are conditions where the internal audit activity may provide risk management consulting?

1.There is a clear strategy and timeline to migrate risk management responsibility back to management.

2.The internal audit activity has the final approval on any risk management decisions.

3.The internal audit activity gives objective assurance on all parts of the risk management framework for which it is responsible.

4.The nature of services provided to the organization is documented in the internal audit charter.

Options:

A.  

1 and 4 only.

B.  

2 and 4 only.

C.  

1 and 3 only.

D.  

2 and 3 only.

Discussion 0
Question # 146

The chief audit executive (CAE) determined that the internal audit activity lacks the resources needed to complete the internal audit plan Which of the following would be the most appropriate action tor the CAE to take?

Options:

A.  

Use guest auditors from within the organization, and leverage their experience by assigning them to lead engagements m areas where they previously worked

B.  

Outsource some of the audits to the organization s external auditor who is already familiar with the organization

C.  

Invite nonauditors to join the internal audit activity for a two-year rotational position, and assign them to join audit teams that are reviewing areas where they have no previous management responsibility

D.  

Recruit recent college graduates and employ them as audit interns with an aim to offer permanent employment

Discussion 0
Question # 147

Which statement best describes the benefit of using workpapers from recent internal audit engagements of the area under review to plan new engagements?

Options:

A.  

Recent workpapers can help during the planning of a new engagement to understand any corrective actions taken by management to address previous engagement observations.

B.  

Tests described in recent workpapers can be copied into the new workpapers to save time from reperforming a risk assessment.

C.  

Recent workpapers serve as the best source for identification of the risks to be examined in the new engagement.

D.  

The new engagement scope can be derived from recent workpapers to ensure the reperformance of engagement procedures.

Discussion 0
Question # 148

An organization experiencing staff shortages wants to contract a temporary employee to assist with work in the accounting office. Which of the following controls should be in place to ensure the temporary employee performs the assigned work before payment is issued?

Options:

A.  

A three-way match between the invoice, purchase requisition, and documentation of receipt of services

B.  

A member of management approves the purchase requisition before the temporary employee begins work

C.  

A scope of work for the temporary employee is included in the purchase requisition and signed by the organization

D.  

Payments to the vendor are analyzed monthly to ensure they do not exceed the amount approved on the purchase order

Discussion 0
Question # 149

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?

Options:

A.  

Establish a means for resolving any professional judgment differences over ethical issues that may arise during the engagement.

B.  

Approve the engagement work program to ensure the program is designed to achieve the engagement objectives

C.  

Evaluate whether the testing and results support the engagement results and conclusion

D.  

Review the sample testing results for exceptions.

Discussion 0
Question # 150

According to IIA guidance, which of the following is a limitation of a heat map?

Options:

A.  

Impact cannot be represented on a heat map unless it is quantified in financial terms.

B.  

Impact and likelihood at times cannot be differentiated as to which is more important.

C.  

A heat map cannot be used unless a risk and control matrix has been developed.

D.  

Qualitative factors cannot be incorporated into a heat map.

Discussion 0
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