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IIA-CIA-Part2 Practice Questions

Internal Audit Engagement

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Question # 76

According to IIA guidance which of the following best describes reliable information?

Options:

A.  

Reliable information is factual adequate, and convincing so that a prudent informed person would reach the same conclusions as the internal auditor

B.  

Reliable information is the best attainable information through the use of appropriate engagement techniques

C.  

Reliable information supports engagement observations and recommendations and is consistent with the objectives for the engagement

D.  

Reliable information helps the organization and the internal audit activity meet its goals

Discussion 0
Question # 77

When is an organic organizational structure likely to be more successful than a mechanistic organizational structure?

Options:

A.  

When a manufacturing organization has stable demand for its products.

B.  

When an organization is subjected to strong political and social pressures

C.  

When a manufacturer has reliable resources and suppliers.

D.  

When an organization is infrequently affected by technological advances

Discussion 0
Question # 78

An internal audit activity maintains a quality assurance and improvement program that includes annual self-assessments The internal audit activity includes in each engagement report a clause that the engagement is conducted in conformance with the International Standards for the Professional Practice of Internal Auditing (Standards). Which of the following justifies inclusion of this clause in the reports?

Options:

A.  

Internal audit activity policies and engagement records provide relevant, sufficient, and competent evidence that the statement is correct.

B.  

The audit committee has reviewed the annual self-assessment results and approved the use of the clause.

C.  

The self-assessment results were validated by a qualified external review team three years prior.

D.  

The internal audit charter, approved by the audit committee, requires conformance with the Standards

Discussion 0
Question # 79

How do internal auditors generally determine the priority of the areas within the engagement scope?

Options:

A.  

By calculating the period of time when the area was last audited try internal auditors

B.  

By totaling the monetary value of the processes within the organization in the scope of the engagement

C.  

By counting the number of red flags indicating the potential fraudulent activities within the area.

D.  

By estimating the likelihood of a risks occurring and the potential impact of that risk on the organization

Discussion 0
Question # 80

Operational management In the IT department has developed key performance indicator reports, which are reviewed in detail during monthly staff meetings. This activity is designed to prevent which of the following conditions?

Options:

A.  

Knowledge/skills gap.

B.  

Monitoring gap.

C.  

Accountability reward failure

D.  

Communication failure

Discussion 0
Question # 81

The internal audit team judgmentally selected 60 of the 600 employee timesheets that were processed during the previous month to determine whether supervisors were properly approving timesheets in accordance with the organization's policies. The internal audit team found three exceptions. Based on the audit test, which of the following is most appropriate for the internal audit team to conclude?

Options:

A.  

The internal control is operating with 95% effectiveness

B.  

There is 90% probability that the internal control is operating as designed

C.  

The internal control is not designed appropriately

D.  

5% of the selected timesheets were not properly approved

Discussion 0
Question # 82

What is the primary objective of an engagement supervisor's review of key activities performed during the engagement?

Options:

A.  

To ensure that the engagement is completed on time and within budget

B.  

To ensure that all work performed meets acceptable quality standards

C.  

To ensure that management has provided suitable responses to all observations

D.  

To ensure that management is satisfied with the progress of the engagement

Discussion 0
Question # 83

While conducting an information security audit, an internal auditor learns that the existing disaster recovery plan is four years old and untested. The auditor also learns that in the four years since the recovery plan was implemented, the information systems have undergone extensive changes. Which of the following actions is most appropriate for the auditor to take?

Options:

A.  

Inform management and request that the plan be tested immediately.

B.  

Update the recovery plan for management, as part of the review.

C.  

Evaluate the recovery plan and report weaknesses to management.

D.  

Recommend that management and users update and test the recovery plan.

Discussion 0
Question # 84

The internal audit activity has adopted the balanced scorecard approach to assess its performance According to MA guidance which of the following is a key performance indicator relevant to the audit client?

Options:

A.  

Percentage of recommendations implemented by corrective action date

B.  

Staff experience

C.  

Percentage of planned audits completed

D.  

Conformance with the International Professional Practices Framework

Discussion 0
Question # 85

An internal auditor completed a test of 30 randomly selected accounts. For five of the accounts selected, the auditor was unable to find supporting documentation in the normal place of storage. Which of the following next steps would be most appropriate for the internal auditor to take?

Options:

A.  

Conclude that the test failed because at least 17 percent of the sample items were not supported.

B.  

Select five new accounts to replace the ones that were missing supporting documentation.

C.  

Expand the sample size to 60 to determine whether the error rate remains the same.

D.  

Contact management to determine whether the supporting documentation can be located elsewhere.

Discussion 0
Question # 86

In an assurance engagement focused on the adequacy of organizationwide risk management practices, which of the following best describes a primary area of interest for the engagement?

Options:

A.  

The effectiveness of process-level and transaction-level controls.

B.  

Conflicts of interest within the organizational structure of the senior management.

C.  

The alignment of management decisions with the level of risk the organization is willing to accept.

D.  

The actions of upper management in response to the internal audit acth/lty's reporting

Discussion 0
Question # 87

During which phase of the contracting process are contracts drafted for a proposed business activity’

Options:

A.  

Initiation phase.

B.  

Bidding phase.

C.  

Development phase.

D.  

Management phase

Discussion 0
Question # 88

Which of the following is true of matrix organizations?

Options:

A.  

A unity-of-command concept requires employees to report technically, functionally, and administratively to the same manager.

B.  

A combination of product and functional departments allows management to utilize personnel from various functions.

C.  

Authority, responsibility, and accountability of the units involved may vary based on the projects life, or the organization's culture.

D.  

it is best suited for firms with scattered locations or for multi-line, large-scale firms.

Discussion 0
Question # 89

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 # 90

The board has asked the internal audit activity (IAA) to be involved in the organization's enterprise risk management process. Which of the following activities is appropriate for IAA to perform without safeguards?

Options:

A.  

Coach management in responding to risks.

B.  

Develop risk management strategies for board approval.

C.  

Facilitate identification and evaluation of risks.

D.  

Evaluate risk management processes.

Discussion 0
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