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IIA-CIA-Part2 Practice Questions

Internal Audit Engagement

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Total Questions : 747

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Question # 151

Which of the following methodologies consists of the internal auditor holding individual meetings with different people, asking them the same questions, and aggregating the results?

Options:

A.  

Facilitated workshops.

B.  

Surveys.

C.  

Structured interviews.

D.  

Elicitation.

Discussion 0
Question # 152

During a review of data privacy an internal auditor is tasked with testing management's identification and prioritization of critical data collected by the organization. Which of the following steps would accomplish this objective?

Options:

A.  

interview management to determine what types of data are collected and maintained

B.  

Trace data from storage to the collection sources to determine how critical data is collected and organized

C.  

Review a sample of data to determine whether the risk classification is reasonable

D.  

Document and test a data inventory and classification program by determining the data classification levels and framework

Discussion 0
Question # 153

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?

Options:

A.  

Intern accounting management via an interim memorandum update

B.  

Note the item in the workpapers for inclusion in the final audit report

C.  

Call a meeting and discuss me issue with the audit committee

D.  

Alert the CEO as soon as the issue is discovered

Discussion 0
Question # 154

A customer has supplied personal information to a bank to facilitate opening an account. The bank is part of a larger group of companies with core businesses including general insurance, life insurance, and investment products. Considering that the customer has closed his only account with the bank and the statutory data retention period has elapsed, which of the following actions by the bank is most likely to align with appropriate data privacy principles?

Options:

A.  

The bank destroys all records containing a customer's personal information without informing the customer.

B.  

Based on an assessment of likely products of interest to the customer, the bank shares the customer’s personal information with other companies within the group and informs the customer.

C.  

The bank retains customer information to facilitate easier verification of personal information in the event that the customer returns to reopen his account. The customer is not informed.

D.  

The customer's personal information is used for market research by an external company and the customer is informed prior to publishing the results of the market research.

Discussion 0
Question # 155

According to IIA guidance, which of the following should be a primary objective for an internal auditor who is conducting an exit conference?

Options:

A.  

Improve relations with the engagement clients.

B.  

Present the final engagement communication.

C.  

Identify concerns for future audit engagements.

D.  

Ensure the accuracy of engagement conclusions.

Discussion 0
Question # 156

Which of the following statements is true regarding internal control questionnaires (ICQs)?

Options:

A.  

ICQs are most useful in more organic, decentralized organizations with specialized departmental or regional characteristics.

B.  

An ICQ can be used effectively either by sending it in advance for management of the area under review to complete or by testing each procedure and recording the results.

C.  

An ICQ is not an efficient tool, as it can only inquire about controls and it does not test them.

D.  

ICQs are also known as checklist audits and encourage management of the area under review to answer "no" or "yes" more accurately.

Discussion 0
Question # 157

An internal auditor determined that the organization's accounting system was designed to reject duplicate invoices if they were issued with identical invoice numbers. However, if an invoice number was changed by at least one digit, the system would accept the duplicate invoice as new. Which of the following would be the most appropriate criteria to refer to in the audit observation?

Options:

A.  

Each invoice for goods or services acquired by the organization must be recorded only once in the accounting system.

B.  

The accounting system lacks efficient controls for the identification of duplicate invoices.

C.  

Disbursements may be made inappropriately, and liabilities may be overstated.

D.  

The accounting system is at the end of its lifetime and is no longer developed by the provider.

Discussion 0
Question # 158

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?

Options:

A.  

Follow up after the applicable changes have been incorporated to validate management’s response.

B.  

Include the items in the scope of the next scheduled audit of the accounts payable function.

C.  

Because management agreed with the findings, no further action is deemed necessary.

D.  

Have an internal audit staff member placed into the accounting department until corrections are made.

Discussion 0
Question # 159

While reviewing warehouse inventory records, an internal auditor noticed that the warehouse has a surprisingly high number of products in storage. Over the past three years, the auditor had visited this particular warehouse numerous times for previous engagements and remembered that the warehouse was rather small. The auditor then decided to compare the square footage of the warehouse to the recorded number of products in storage. The auditor’s action is an example of which of the following?

Options:

A.  

Performing a reasonableness test.

B.  

Conducting a fraud investigation.

C.  

Conducting trend analysis.

D.  

Operating with impaired objectivity.

Discussion 0
Question # 160

Which of the following engagement techniques would be best to meet the objective of denting a personal conflict -of -interest situation affecting an organization’s procurement function?

Options:

A.  

Inquiry

B.  

Analytical review

C.  

Observation

D.  

Inspection of documents

Discussion 0
Question # 161

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?

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

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

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

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 # 162

Which of the following internal audit activity staffing models has the disadvantage that auditors are always new and in training?

Options:

A.  

Career model.

B.  

Center of competence model.

C.  

Rotational model.

D.  

Hybrid model.

Discussion 0
Question # 163

Which informal ion- gathering method would be most efficient for an internal auditor to determine whether specified control procedures are in place?

Options:

A.  

Interviews

B.  

Observations

C.  

Reperformance

D.  

Internal control questionnaires

Discussion 0
Question # 164

Which of the following statements accurately describes the Standards requirement for ret internal audit records?

Options:

A.  

Retention requirements for internal audit records should be compliant with ones set for external audit records

B.  

Retention requirements should take into account the medium in which internal audit records are stored

C.  

Retention requirements should be set by the chief audit executive and aligned will the organization s process and procedures

D.  

Retention requirements should set a minimum period of the for records storage and the process of archiving documents

Discussion 0
Question # 165

Which of the following statements is true regarding engagement planning?

Options:

A.  

The scope of the engagement should be planned according to the internal audit activity's budget and then aligned to the risk universe.

B.  

The audit engagement objectives should be based on operational managements view of risk objectives

C.  

The planning phase of the engagement should be completed and approved before the fieldwork of the engagement begins.

D.  

The main purpose of the engagement work program is to determine the nature and timing of procedures required to gather audit evidence

Discussion 0
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