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IIA-CIA-Part2 Practice Questions

Internal Audit Engagement

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Total Questions : 747

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Question # 16

Internal control questionnaires are used to achieve which of the following objectives?

Options:

A.  

To ascertain the operating effectiveness of a procedure

B.  

To verify the accuracy of Information in a report

C.  

To assess the controls mitigating major risks

D.  

To determine whether specified contra procedures are in place

Discussion 0
Question # 17

Upon concluding the engagement fieldwork an internal auditor discusses the audit findings with operational management There is a greater likelihood that the auditor will obtain a responsive action plan from management when both parties agree on which of the following attributes of the audit finding?

Options:

A.  

Criteria

B.  

Condition

C.  

Cause

D.  

Effect

Discussion 0
Question # 18

Acceding to IIA guidance, which of the following statements is true regarding the risk assessment process performed by the internal audit activity?

Options:

A.  

The assessment of high-level risks is typically a linear process.

B.  

Management should create the preliminary risk matrix

C.  

The analysis should begin with ne identification of objectives

D.  

Likelihood should receive greater consideration than impact

Discussion 0
Question # 19

Which of the following statements is true regarding engagement planning?

Options:

A.  

The engagement objectives are the boundaries for the engagement, which outline what will be included in the review

B.  

The risk-based objectives of the engagement can be determined once the scope of the engagement has been formed

C.  

For a consulting engagement, planning typically occurs after the engagement objectives and scope have already been determined

D.  

For an assurance engagement, once the scope is established and testing has begun, the scope cannot be modified.

Discussion 0
Question # 20

According to IIA guidance, when would an interim report typically be produced?

Options:

A.  

During a standard audit engagement when management wants to address an issue before the final report is drafted.

B.  

Following each workshop conducted during a consulting engagement.

C.  

During lengthy audit engagements involving several organizational units.

D.  

Following management ' s update tor actions taken on outstanding recommendations.

Discussion 0
Question # 21

A large retail organization, which sells most of its products online, experiences a computer hacking incident. The chief IT officer immediately investigates the incident and concludes that the attempt was not successful. The chief audit executive (CAE) learns of the attack in a casual conversation with an IT auditor. Which of the following actions should the CAE take?

1. Meet with the chief IT officer to discuss the report and control improvements that will be implemented as a result of the security breach, if any.

2. Immediately inform the chair of the audit committee of the security breach, because thus far only the chief IT officer is aware of the incident.

3. Meet with the IT auditor to develop an appropriate audit program to review the organization ' s Internet-based sales process and key controls.

4. Include the incident in the next quarterly report to the audit committee.

Options:

A.  

1 and 2

B.  

1 and 3

C.  

2 and 4

D.  

3 and 4

Discussion 0
Question # 22

According to IIA guidance, which of the following activities are typically primary objectives of engagement supervision?

Options:

A.  

Enable training and development of staff, identify engagement objectives, and assign responsibilities to individual auditors.

B.  

Identify engagement objectives, assign responsibilities to individual auditors, and approve the engagement program.

C.  

Assign responsibilities to individual auditors, approve the engagement program, and enable training and development of staff.

D.  

Approve the engagement program, enable training and development of staff, and identify engagement objectives.

Discussion 0
Question # 23

An internal auditor wanted to determine whether company vehicles were being used for personal purposes She extracted a report that listed company vehicle numbers business units to which the vehicles are allocated travel dates, travel duration and mileage She then filtered the data for weekend dates Which of the following additional information would the auditor need?

Options:

A.  

Names and work titles of employees

B.  

Description of responsibilities of business units.

C.  

Average fuel consumption data of vehicles

D.  

Location and route data of vehicles

Discussion 0
Question # 24

According to IIA guidance, which of the following would be considered necessary for a one-person audit function?

Options:

A.  

A formalized technical audit manual

B.  

A written administrative audit manual

C.  

A memorandum stating policies and procedures

D.  

A comprehensive policy and procedure manual

Discussion 0
Question # 25

An internal auditor is tasked with evaluating the adequacy of the organization ' s inventory fraud controls. What is the most relevant information that the auditor can obtain from the documentation of cyclic counting for this purpose?

Options:

A.  

Accounting adjustments of inventories are approved by the management in accordance with a signature policy

B.  

Root causes of inventory differences are analyzed and corrective measures are followed

C.  

High value items are inventoried more frequently throughout the year

D.  

Value of accounting adjustments matches with the value of inventory differences and are made in a timely manner

Discussion 0
Question # 26

The internal audit function is in the fieldwork stage of the annual staff performance appraisal assurance engagement. A new auditor is hired and added to the engagement team. The auditor reviews the engagement work program with another member of the team and suggests improvements to make the fieldwork easier to complete. What action should be taken next?

Options:

A.  

Refer the suggested changes to the engagement supervisor for approval.

B.  

Note the suggested changes to be included in next year’s engagement program.

C.  

Update the engagement work program with the suggested changes.

D.  

No action is required as the work program has been approved and is underway.

Discussion 0
Question # 27

Who is responsible for ensuring internal auditors continuing professional development*

Options:

A.  

Individual internal auditors

B.  

Chief audit executive.

C.  

The board

D.  

Engagement supervisors

Discussion 0
Question # 28

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

Options:

A.  

Internal control questionnaires are useful m evaluating the effectiveness of standard operating procedures

B.  

internal control questionnaires provide reliable documents allowing internal auditors to cover many control procedures in little time

C.  

Internal control questionnaires can be used by internal auditors as an interview guide

D.  

Internal control questionnaires provide direct audit evidence which may need corroboration

Discussion 0
Question # 29

Which of the following would most likely cause an internal auditor to consider adding fraud work steps to the audit program?

Options:

A.  

Improper segregation of duties.

B.  

Incentives and bonus programs.

C.  

An employee ' s reported concerns.

D.  

Lack of an ethics policy.

Discussion 0
Question # 30

In the years after the mid-service point of a depreciable asset, which of the following depreciation methods will result in the highest depreciation expense?

Options:

A.  

Sum of the years’ digits.

B.  

Declining balance.

C.  

Double-declining balance.

D.  

Straight line.

Discussion 0
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