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IIA-CIA-Part2 Practice Questions

Internal Audit Engagement

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Question # 1

According to IIA guidance, which of the following most appropriately justifies the CEO’s decision that the internal audit activity shall be responsible for risk management and Investigation at multinational organization?

Options:

A.  

The recommendation of the parent office external auditors.

B.  

The provisions of the internal audit charter.

C.  

The authority of the CEO.

D.  

The level of proficiency of the chief audit executive

Discussion 0
Question # 2

What is the primary purpose of creating a preliminary draft audit report?

Options:

A.  

To save time during final report writing

B.  

To meet the Standards requirement for developing a draft report prior to issuing a final report

C.  

To use as a tool for communicating with management of the area under review.

D.  

To require that management implements solutions to issues identified during the engagement

Discussion 0
Question # 3

According to the International Professional Practices Framework, which of the following is an appropriate reason for issuing an interim report?

To keep management informed of audit progress when audit engagements extend over a long period of time.

To provide an alternative to a final report for limited-scope audit engagements.

To communicate a change in engagement scope for the activity under review.

Options:

A.  

1 and 2 only.

B.  

1 and 3 only.

C.  

2 and 3 only.

D.  

1, 2, and 3.

Discussion 0
Question # 4

An internal auditor wants to assess whether the organization ' s governing body was involved in strategic decisions for the use of social media. What could provide the most relevant evidence?

Options:

A.  

The board ' s meeting minutes

B.  

The executive committee’s social media budget report

C.  

The organization’s marketing plan

D.  

The organization’s procedures manual for daily social media management

Discussion 0
Question # 5

An organization recently acquired a subsidiary in a new industry, and management asked the chief audit executive (CAE) to perform a comprehensive audit of the subsidiary prior to recommencing operations The CAE is unsure her team has the necessary skills and knowledge to accept the engagement According to IIAguidance, which of the following responses by the CAE would be most appropriate?

Options:

A.  

The CAE should accept the engagement and ensure that an explanation of the expertise limitations is included in the final audit report.

B.  

The CAE should ask management to hire an external expert who is familiar with the industry to perform an independent audit for management

C.  

The CAE should accept the engagement and hire an external expert to assist the audit team with the audit of the subsidiary

D.  

The CAE should recommend postponing the engagement until the internal audit team is able to develop sufficient knowledge of the new industry

Discussion 0
Question # 6

Which of the following audit steps would an internal auditor perform when reviewing cash disbursements to satisfy IIA guidance on due professional care?

Options:

A.  

The calculated statistical sample size is 50 however the internal auditor believes errors exist so he decides to increase the sample size to 80

B.  

The internal auditor traces serial numbers of computer equipment listed on an invoice to the fixed asset inventory

C.  

The internal auditor reviews the accounts payable manager ' s petty cash fund and vouchers

D.  

The internal auditor reviews the related invoice purchase order and receiving report for each sample selection

Discussion 0
Question # 7

Which of the following manual audit approaches describes testing the validity of a document by following it backward to a previously prepared record?

Options:

A.  

Tracing

B.  

Reperformance

C.  

Vouching

D.  

Walkthrough

Discussion 0
Question # 8

What is a control implication for an organization that adopts a flat structure?

Options:

A.  

Mid-level employees are urged to innovate.

B.  

Available time for supervision is limited.

C.  

There are many hierarchical levels.

D.  

The organizational structure is dispersed vertically.

Discussion 0
Question # 9

Which of the following is most likely to be considered a control weakness?

Options:

A.  

Vendor invoice payment requests are accompanied by a purchase order and receiving report.

B.  

Purchase orders are typed by the purchasing department using prenumbered forms

C.  

Buyers promptly update the official vendor listing as new supplier sources become known.

D.  

Department managers initiate purchase requests that must be approved by the plant superintendent

Discussion 0
Question # 10

Internal auditors map a process by documenting the steps in the process, which provides a framework for understanding. Which of the following is a reason to use narrative memoranda?

Options:

A.  

To create a detailed risk assessment.

B.  

To identify individuals who perform key roles.

C.  

To explain a simple process.

D.  

To document which outputs support other activities.

Discussion 0
Question # 11

Internal auditors map a process by documenting the steps in the process, which provides a framework for understanding Which of the following is a reason to use narrative memoranda?

Options:

A.  

To create a detailed risk assessment

B.  

To identify individuals who perform key roles

C.  

To explain a simple process.

D.  

To document which outputs support other activities.

Discussion 0
Question # 12

According to IIA guidance,which of the following is true about the supervising internal auditor ' s review notes?

• They are discussed with management prior to finalizing the audit.

• They may be discarded after working papers are amended as appropriate.

• They are created by the auditor to support her fieldwork in case of questions.

• They are not required to support observations issued in the audit report.

Options:

A.  

1 and 3 only

B.  

1 and 4 only

C.  

2 and 3 only

D.  

2 and 4 only

Discussion 0
Question # 13

According to HA guidance, the chief audit executive is directly responsible for which of the following?

Options:

A.  

Maintaining a quality assurance program even in the absence of management support

B.  

Periodically reviewing and approving the internal audit charier

C.  

Providing opportunities for all staff auditors to satisfy their professional development requirements

D.  

Establishing the objectives scope and plan for each engagement

Discussion 0
Question # 14

An internal auditor uses a data query tool in the purchasing process to review the vendor master file for authorizations Which of the following describes the control objective likely being tested?

Options:

A.  

Effectiveness

B.  

Response

C.  

Efficiency

D.  

Mitigation.

Discussion 0
Question # 15

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
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