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Exam Number/Code: IIA-CIA-Part2
Exam name: Certified Internal Auditor - Part 2, Conducting the Internal Audit Engagement
n questions with full explanations
Certification: IIA Certification
Last updated on Global synchronizing
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Q141. Which of the following best defines an audit opinion?
A. A summary of the significant audit observations and recommendations.
B. An auditor's evaluation of the effects of the observations and recommendations on the activities reviewed.
C. A conclusion which must be included in the audit report.
D. A recommendation for corrective action.
Q142. Which of the following is not a primary purpose for conducting a walk-through during the initial
stages of an assurance engagement?
A. To help develop process maps.
B. To determine segregation of duties.
C. To identify residual risks.
D. To test the adequacy of controls.
Q143. Which of the following describes an internal auditor's responsibilities to include audit procedures to detect fraud in audits of a multinational organization?
A. International Accounting Standards require the internal auditor to include audit procedures which would detect fraud if it would cause a material misrepresentation of the financial statements.
B. Internal auditors do not have any specific responsibilities with respect to including fraud-related audit procedures.
C. Proper audit procedures, when carried out with due professional care, will guarantee that fraud, if present, will be detected.
D. If significant control weaknesses are detected, additional tests should be directed toward other indicators of fraud.
Q144. An audit of an organization's claims department determined that a large number of duplicate payments had been issued due to problems in the claims processing system. During the exit conference, the vice president of the claims department informed the auditors that attempts to recover the duplicate payments would be initiated immediately and that the claims processing system would be enhanced within six months to correct the problems. Based on this response, the chief audit executive should:
A. Adjust the scope of the next regularly scheduled audit to assess controls within the claims processing system.
B. Discuss the findings with the audit committee and ask the committee to determine the appropriate follow-up action.
C. Schedule a follow-up engagement within six months to assess the status of corrective action.
D. Monitor the status of corrective action and schedule a follow-up engagement when appropriate.
Q145. A chief audit executive (CAE) is evaluating four potential audit engagements based on the following factors: the engagement's ability to reduce risk to the organization, the engagement's ability to save the organization money, and the extent of change in the area since the last engagement. The CAE has scored the engagements for each factor from low to high, assigned points, and calculated an overall ranking. The results are shown below with the points in parentheses:
High (3) Medium (2)
If the organization has asked the CAE to consider the cost savings factor to be twice as important as any other factor, which engagements should the CAE pursue?
A. 1 and 2 only
B. 1 and 3 only
C. 2 and 4 only
D. 3 and 4 only
Q146. An organization has a health and safety division that conducts audits to meet regulatory requirements. The chief health and safety officer reports directly to the CEO. Which of the following describes an appropriate role for the chief audit executive (CAE) with regard to the organization's health and safety program?
A. The CAE has no role to play, because the chief health and safety officer reports to a senior executive.
B. The CAE should coordinate with, and review the work of, the chief health and safety officer to gain an understanding of whether risks related to health and safety are managed properly.
C. The CAE should give periodic reports directly to the regulator regarding health and safety issues, as it is the appropriate regulatory oversight body.
D. The CAE should hire an independent external specialist to conduct an annual assessment and provide assurance over the effectiveness of the health and safety program and the reliability of its reports.
Q147. What does the following scatter gram suggest?
A. Sales revenue is related to training costs.
B. The training program is not effective.
C. Increases in training costs consistently increase sales revenue.
D. One data point is incorrectly plotted.
Q148. According to IIA guidance, which of the following is least likely to be a key financial control in an organization's accounts payable process?
A. Require the approval of additions and changes to the vendor master listing, where the inherent risk of false vendors is high.
B. Monitor amounts paid each period and compare them to the budget to identify potential issues.
C. Compare employee addresses to vendor addresses to identify potential employee fraud.
D. Monitor customer quality complaints compared to the prior period to identify vendor issues.
Q149. Which of the following factors would increase the confidence level in a variables sampling plan?
I. A larger sample size.
II. A stratified sample.
A larger standard deviation.
I and II only
I and III only
II and III only
I, II, and III
Q150. Which of the following situations would best support the decision of a chief audit executive (CAE) to defer follow-up activity at a branch office until the next audit engagement?
A. An audit of the branch office is routinely scheduled every three years.
B. On-site follow-up of a remote branch may not be feasible due to travel costs.
C. Branch office management states that correction of the audit issue may take longer than expected.
D. The CAE and management agree that the corrective action taken to date is sufficient.