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IIA-CIA-Part2 Practice Questions

Internal Audit Engagement

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Question # 121

The organization’s internal audit charter was last updated six years ago to update the charter, which of the following actions is most appropriate for the chief audit executive to take?

Options:

A.  

Wait for the next external assessment and address all of the missing information in the charter based on the recommendations from the external assessment team

B.  

Perform a review of HA guidance to become acquainted with the latest mandatory elements prior to updating the charter

C.  

Use an internal audit charter template from another organization that operates within the same industry.

D.  

Identify an individual within the internal audit activity who has in-depth knowledge of mandatory IIA guidance elements to address any gaps or areas of the current version of the charter that could be improved

Discussion 0
Question # 122

An internal auditor conducted interviews with several employees, documented the interviews analyzed the summaries, and drew a number of conclusions. What sort of audit evidence has the internal auditor primarily obtained?

Options:

A.  

Documentary evidence

B.  

Testimonial evidence

C.  

Analytical evidence

D.  

Physical evidence

Discussion 0
Question # 123

An internal auditor is examining the organization's internal control processes. Which of the following would the auditor do to test the reliability of a customer database1?

Options:

A.  

Perform a site visit to see whether the organization's servers are operational

B.  

Interview end users to determine whether they understand how to use the database information

C.  

Determine whether policies are in place on how to use the database information

D.  

Review for indications of potential issues with the database information

Discussion 0
Question # 124

An organization's board would like to establish a formal risk management function and has asked the chief audit executive (CAE) to be involved in the process. According to IIA guidance, which of the following roles should the CAE not undertake?

Options:

A.  

Manage and coordinate risk management processes.

B.  

Audit risk management processes.

C.  

Become involved in risk oversight committees, monitoring activities, and status reporting.

D.  

Accept management's responsibility for risk management without board approval.

Discussion 0
Question # 125

Which of the following is required to classify, label, organize, and search big data stored and used in an organization?

Options:

A.  

Metadata

B.  

Data security

C.  

A business application

D.  

Data owner

Discussion 0
Question # 126

The internal audit activity needs to review the information security function but does not have the IT expertise needed for the engagement. Which of the following actions should the chief audit executive take to ensure the internal audit activity conforms with the Standards?

Options:

A.  

Assign the engagement to a staff auditor and closely review his work and report.

B.  

Assign the engagement to a senior auditor, who carefully researches and studies the company’s IT infrastructure.

C.  

Contract an external service provider auditor with the experience necessary to perform the audit.

D.  

Perform the audit herself and work closely with the information security function to obtain expertise in the area.

Discussion 0
Question # 127

In which of the following situations has an internal audit of obtained physical evidence?

Options:

A.  

An internal auditor made purchases from several of the organization's retail outlets to evaluate customer service

B.  

An internal auditor interviewed various employees regarding health and safety issues and recorded their answers

C.  

An internal auditor obtained the current quarterly financial report and computed changes in deb-to-equity ratio

D.  

An internal auditor received a signed confirmation regarding the terms of a transaction from an independent attorney

Discussion 0
Question # 128

Which of the following activities would an internal auditor perform as a consulting engagement for an organization?

Options:

A.  

Advising new internal auditors working for the organization on how to develop strategies on planning audits for the upcoming fiscal year

B.  

Assessing whether the organization's corporate social responsibility program is meeting its yearly goals to reduce carbon emissions.

C.  

Briefing the organization's department managers on how to implement risk management processes into their daily operations.

D.  

Communicating with senior management to better understand how new purchasing controls will minimize payment processing time

Discussion 0
Question # 129

Which of the followings statements describes a best practice regarding assurance engagement communication activities?

Options:

A.  

All assurance engagement observations should be communicated to the audit committee.

B.  

All assurance engagement observations should be included in the main section of the engagement communication.

C.  

During the "communicate" phase of an assurance engagement, it is best to define the methods and timing of engagement communications.

D.  

A detailed escalation process should be developed during the planning stage of an assurance engagement.

Discussion 0
Question # 130

Which of the following should management action plans include at a minimum?

Options:

A.  

An implementer for the action plan

B.  

An owner of the action plan

C.  

The internal auditor's next review date of the action plan

D.  

Detailed procedures for the action plan

Discussion 0
Question # 131

An internal auditor was assigned to review controls in the accounts payable function. Most of tie accounts payable processes are performed by a third-party service provider. The auditor included in the audit report a number of control deficiencies involving processes performed by the service provider. The service provider requested a copy of the report Which of Vie following would be the most appropriate response from the chief audit executive (CAE)?

Options:

A.  

The CAE would automatically sand a copy of the report to the service provider as many of the findings relate to Via area managed by the service provider

B.  

The CAE may distribute the report to tie service provider at no cost, after consulting with legal counsel and tie chief compliance officer

C.  

The CAE may provide a copy of the audit report to the service provider If an agreement & signed and the service provider agrees to reimburse the cost of the auditD, The CAE should benchmark with other organization in the industry by consorting with colleagues and distribute the report only I it is an acceptable practice m the industry

Discussion 0
Question # 132

An internal auditor is reviewing the accuracy of commission payments by recalculating 100% of the commissions and comparing them to the amount paid. According to IIA guidance, which of the following actions is most appropriate for identified variances?

Options:

A.  

Document the results and report the overall percentage of variances.

B.  

Determine the significance of the variances and investigate causes as needed.

C.  

Review the results and investigate the cause of all variances.

D.  

Report all variances to management and request an action plan to remediate them.

Discussion 0
Question # 133

Which statistical sampling approach would an internal auditor typically utilize if she wishes to test for fraud and the expected deviation rate is very low?

Options:

A.  

Stratified sampling

B.  

Attribute sampling

C.  

Discovery sampling

D.  

Haphazard sampling

Discussion 0
Question # 134

What would be the effect if an organization paid one of its liabilities twice during the year, in error?

Options:

A.  

Assets, liabilities, and owners' equity would be understated.

B.  

Assets, net income, and owners’ equity would be unaffected

C.  

Assets and liabilities would be understated.

D.  

Assets, net income, and owners’ equity would be understated, but liabilities would be overstated

Discussion 0
Question # 135

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
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