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IIA-CIA-Part2 Practice Questions

Internal Audit Engagement

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Question # 211

During the planning process for a human resources audit, an internal auditor obtains an organizational chart. The auditor observes a flat organizational structure. Which of the below risks should the auditor consider for this engagement?

Options:

A.  

Transactions and decision-making require multiple approvals, resulting in processing delays.

B.  

Career and promotion paths are not easily visible and defined.

C.  

Communication is likely to be top-down, with little feedback from lower-level employees.

D.  

Employees have little autonomy, which may result in employee turnover or low morale.

Discussion 0
Question # 212

Which of the following is an example of a properly supervised engagement?

Options:

A.  

Auditors are asked to keep a daily record of their activity for review by the auditor in charge following the engagement.

B.  

The senior internal auditor requires each auditor to review and initial colleagues’ workpapers for completeness and format

C.  

A new internal auditor is accompanied by an experienced auditor during a highly sensitive fraud investigation.

D.  

The auditor in charge provides reasonable assurance that engagement objectives were met

Discussion 0
Question # 213

A financial services organization's CEO requests that the internal audit function carry out fraud scenario testing over the supplier payment process. The engagement supervisor intends to identify these scenarios using a technique that motivates the sharing of ideas. Which of the following provides the internal audit function with this information?

Options:

A.  

Fraud risk matrix

B.  

Benchmarking

C.  

Brainstorming

D.  

Walkthroughs

Discussion 0
Question # 214

A chief audit executive (CAE) following up on action plans from previously completed audits identifies that management has determined that certain action plans are no longer necessary If the CAE disagrees with managements decision, which of the following is the most appropriate next step for the CAE to take?

Options:

A.  

The CAE must discuss the matter with senior management

B.  

The CAE must discuss the matter with key shareholders.

C.  

The CAE must discuss the matter with legal counsel.

D.  

The CAE must discuss the matter with the board

Discussion 0
Question # 215

Which of the following statements is true pertaining to interviewing a fraud suspect?

1. Information gathered can be subjective as well as objective to be useful.

2. The primary objective is to obtain a voluntary written confession.

3. The interviewer is likely to begin the interview with open-ended questions.

4. Video recordings always should be used to provide the highest quality evidence.

Options:

A.  

1 only

B.  

4 only

C.  

1 and 3

D.  

2 and 4

Discussion 0
Question # 216

Options:

A.  

Review the organizational structure, management roles and responsibilities, and operating procedures.

B.  

Evaluate management's risk assessment and the internal audit activity's risk assessment.

C.  

Assess process flow and control documents used to meet regulatory requirements.

D.  

Review meeting notes from discussions involving management of the area to be reviewed.

Discussion 0
Question # 217

An internal audit report includes a recommendation to remove inappropriate user access to an IT application. Which of the following does the recommendation represent?

Options:

A.  

An agreed action adopted by management.

B.  

A condition-based recommendation as an interim solution to correct a current condition.

C.  

A cause-based recommendation to prevent inappropriate access being granted again.

D.  

A management action plan.

Discussion 0
Question # 218

When auditing an organization's cash-handling activates which of the following is the most reliable form of testimonial evidence an internal auditor can obtain?

Options:

A.  

Testimony from the cashier who performs the processes being reviewed

B.  

Testimony from me cashier's supervisor who knows how processes should be performed

C.  

Testimony from a knowledgeable person who is independent of the cashiering duty

D.  

Testimony from a manager who oversees all cashiering activities being reviewed

Discussion 0
Question # 219

Which of the following is essential for ensuring that the internal audit activity's findings and recommendations receive adequate consideration?

Options:

A.  

Reporting results of audits with recommendations to management.

B.  

Providing formal follow-up procedures to ensure that management complies with an action plan or accepted risk of not taking action.

C.  

Reporting quarterly to management that the audit plan is focused on higher exposures of risk.

D.  

Discussing audit findings with independent auditors.

Discussion 0
Question # 220

Which of the following statements is true regarding the management-by-objectives method?

Options:

A.  

Management by objectives is most helpful in organizations that have rapid changes

B.  

Management by objectives is most helpful in mechanistic organizations with rigidly defined tasks.

C.  

Management by objectives helps organizations to keep employees motivated.

D.  

Management by objectives helps organizations to distinguish clearly strategic goals from operational goals

Discussion 0
Question # 221

A corporate merger decision prompts the chief audit executive (CAE) lo propose interim changes to the existing annual audit plan to account for emerging risks Which of the following is the most appropriate action for the CAE to take regarding the changes made to the audit plan''

Options:

A.  

Present the revised audit plan directly to the board for approval.

B.  

Communicate with the chief financial officer and present the revised audit plan to the CEO tor approval

C.  

Present the revised audit plan directly to the CEO for approval

D.  

Communicate with the CEO and present the revised audit plan to the board for approval.

Discussion 0
Question # 222

In preparing the engagement work program, which of the following is generally true with respect to secondary controls?

Options:

A.  

A separate engagement work program should be created for secondary controls

B.  

Secondary controls do not necessarily need to be tested for effectiveness

C.  

Any documented secondary controls are deemed essential to the adequacy of control design

D.  

Secondary controls should be held to the same requirements as key controls

Discussion 0
Question # 223

An internal auditor at an electricity provider analyzes data sets related to customers’ household electricity usage, including payments, consumption, profiles, etc. The objective is to assess the completeness of the invoicing process. Which of the following would be the best approach to fulfill this purpose?

Options:

A.  

Conduct a trend analysis of customers' payment history and flag those with the most inconsistent payments and debts

B.  

Conduct a ratio analysis by calculating the relationship between sums paid in local currency and volume of electricity billed in megawatt hours

C.  

Conduct an analysis of clients’ electricity consumption patterns within a specified period and identify consumption spikes

D.  

Conduct a comparison to identify deviations between electricity amounts billed to customers and information regarding actual consumption

Discussion 0
Question # 224

An engagement supervisor obtains facilities maintenance reports from a contractor during an audit of third-party services. Which of the following is the source of authority for the engagement supervisor to make such contact outside the organization?

Options:

A.  

The policies and procedures of the internal audit activity.

B.  

The provisions of the internal audit charter.

C.  

The authority of the CEO.

D.  

The IIA's Code of Ethics.

Discussion 0
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