[Dec-2023] Certified Internal IIA-CIA-Part2 Exam Practice Test Questions Dumps Bundle!
2023 Updated IIA-CIA-Part2 PDF for the IIA-CIA-Part2 Tests Free Updated Today!
NEW QUESTION # 197
Which of the following is the primary purpose of financial statement audit engagements?
- A. To evaluate organizational and departmental structures, including assessments of process flows related to financial matters.
- B. To provide a review of routine financial reports, including analyses of selected accounts for compliance with generally accepted accounting principles.
- C. To provide an analysis of business process controls in the accounting department, including tests of compliance with internal policies and procedures.
- D. To assess the efficiency and effectiveness of the accounting department.
Answer: B
NEW QUESTION # 198
Which of the following audit steps would be most effective to review proper recording of and accountability over physical assets?
I. Physically inspect all assets on the organization's property.
II. Select a sample department and physically inspect assets in the department.
III. Select a sample from the organization's records of physical assets and physically locate each asset.
IV. Identify assets at a sample of locations and trace to the organization's records.
- A. II and III only
- B. I and IV only
- C. III and IV only
- D. I only
Answer: C
NEW QUESTION # 199
Access control software on an organization's mainframe computer records detailed information concerning both successful and unsuccessful log-on attempts to applications. Which of the following audit tools would be best suited to review the access information that has been recorded?
- A. Integrated test facility.
- B. Generalized audit software.
- C. Test data.
- D. Flowcharting.
Answer: B
NEW QUESTION # 200
An internal auditor suspects that employee turnover is unusually htgh at the organization's primary manufacturing plant To investigate this potential issue which of the following analytical approaches is the auditor likely to use?
- A. Cost-benefit analysis.
- B. Ratio analysis
- C. Vertical analysis
- D. Benchmarking
Answer: D
NEW QUESTION # 201
Which of the following would be an appropriate improvement to controls over large quantities of consumable material that are charged to expense when placed in bins which are accessible to production workers?
- A. Require management to compare the cost of consumable items used to the budget.
- B. Lock the bins during normal working hours.
- C. None of the above actions are needed for items of minor cost and size.
- D. Relocate bins to the inventory warehouse.
Answer: A
Explanation:
Section: Volume A
NEW QUESTION # 202
Which of the following items, included in the preliminary audit communication would be most useful for management to formulate action plans in response to audit recommendations?
- A. An audit objectives
- B. A condition
- C. An observation rating
- D. An audit scope
Answer: A
NEW QUESTION # 203
A governmental auditor was assigned to determine reasons why the students in one region scored significantly higher on education evaluation tests than did the students in another region. Previous research showed that there is a direct correlation between public financial support and student results.
Which of the following is most likely to explain the difference in the regional results?
- A. A higher percentage of the general tax fund is spent on education in the more successful region than in the other region.
- B. The more successful region has increased educational spending by an average of 10 percent each year for the last three years, whereas the other region's increase averaged only three percent.
- C. The more successful region spends more money per student on education than does the other region.
- D. The more successful region spends 30 percent more money on education than does the other region.
Answer: C
NEW QUESTION # 204
An auditor decides to perform an inventory turnover analysis for both raw materials inventory and finished goods inventory. The analysis would be potentially useful in:
I. Identifying products for which management has not been attuned to changes in market demand.
II. Identifying potential problems in purchasing activities.
III. Identifying obsolete inventory.
- A. II and III only
- B. I, II, and III
- C. I and II only
- D. III only
Answer: B
NEW QUESTION # 205
Which of the following would have the least significance in an audit of the efficiency of a driver's license testing facility?
- A. Examiners are required to be recertified on an annual basis.
- B. Staff are cross-trained to provide backup for other areas of the facility as required.
- C. Clerical staff administer written tests to allow examiners more time to supervise driving tests.
- D. A point-of-sale cashiering system reduces the need to reenter payment data.
Answer: A
NEW QUESTION # 206
What decision-making approach should a facilitator initiate if a group addresses an unfamiliar situation during a control self-assessment session?
- A. Compromise.
- B. Spontaneous agreement.
- C. Majority voting.
- D. Consensus building.
Answer: D
Explanation:
Section: Volume B
NEW QUESTION # 207
A report prepared by the internal audit activity contains several observations that disclose proprietary information regarding the organization's manufacturing process. According to the International Professional Practices Framework, which of the following is the appropriate treatment for this report?
- A. Disclose and distribute this information in a separate report.
- B. Distribute the report only to the board to protect disclosure.
- C. Require a separate non-disclosure statement from each recipient.
- D. Remove the observations and report verbally to senior management.
Answer: A
Explanation:
Section: Volume D
Explanation/Reference:
NEW QUESTION # 208
Which of the following must an auditor establish in order to demonstrate that fraud has occurred?
- A. Evidence of collusion.
- B. Existence of an internal control deficiency.
- C. Monetary damage to the victim.
- D. The suspect's intent.
Answer: D
NEW QUESTION # 209
An internal auditor wants to determine whether employees are complying with the information security policy, which prohibits leaving sensitive information on employee desks overnight. The auditor checked a sample of
90 desks and found eight that contained sensitive information. How should this observation be reported, if the organization tolerates 4 percent noncompliance?
- A. The deviations are within the acceptable tolerance limit, so the matter only needs to be reported to the information security manager.
- B. The incidents of noncompliance exceed the tolerance level and should be included in the final engagement report.
- C. The incidents of noncompliance fall outside the acceptable tolerance limit and require immediate corrective action, as opposed to reporting.
- D. The matter does not need to be reported, because the noncompliant findings fall within the acceptable tolerance limit.
Answer: B
Explanation:
Section: Volume E
NEW QUESTION # 210
Management has asked the internal audit activity to perform an operational audit of a division that recently reported an increase in expenditures in addition to a decrease in profits. However, existing internal audit resources are currently engaged in a legal compliance audit. Which factor would be considered least important in deciding whether resources should be removed from the legal compliance audit to the operational audit?
- A. The increase in expenditures at the division over the past year.
- B. The probability that the legal compliance audit will detect fraud.
- C. The results of the external auditor's most recent financial audit.
- D. The potential for regulatory fines associated with the legal compliance audit.
Answer: C
NEW QUESTION # 211
Which of the following statements is correct regarding the use of a program evaluation and review technique (PERT) model?
It makes use of a probability model to arrive at a realistic estimate of time
necessary for completion of the audit engagement.
It requires that activities are performed in sequence such that each task is
completed before the commencement of the next activity.
It remains fixed once completed to act as a baseline for measuring the
performance of the audit staff following completion of the engagement.
It begins with the auditor-in-charge identifying the overall scope and then breaking
down the audit engagement into identifiable activity units.
- A. 2 and 4 only.
- B. 2 and 3 only.
- C. 1 and 3 only.
- D. 1 and 4 only.
Answer: D
NEW QUESTION # 212
An internal auditor provided the following statement about division A's performance during the month:
"Because supplies of raw material X were scarce, division A's profits declined by 15 percent." Which of the following can be validly concluded from the auditor's statement?
I. Division A's production level declined by 15 percent.
II. Division A could have sold more products than it produced.
III. Division A usually sells all of the products that it produces.
- A. II only
- B. I and II only
- C. III only
- D. I only
Answer: A
Explanation:
Section: Volume A
NEW QUESTION # 213
Risk assessments can vary in format, but generally include:
1. A description of identified risks.
2. Tests of audit controls.
3. A system of rating risks.
4. Sample size identification.
- A. 1, 3, and 4 only
- B. 2, 3, and 4 only
- C. 1 and 3 only
- D. 1 and 2 only
Answer: C
Explanation:
Section: Volume C
NEW QUESTION # 214
An auditor used a questionnaire during an interview to gather information about the nature of credit sales processing. The questionnaire did not cover some pertinent information offered by the person being interviewed, and the auditor did not document the potential problems for further investigation.
The primary deficiency with the above process is that:
- A. A questionnaire was used in a situation where a structured interview should have been used.
- B. The auditor failed to consider the importance of the information offered.
- C. The engagement program was incomplete.
- D. Using a questionnaire precludes the auditor from documenting other information.
Answer: B
NEW QUESTION # 215
While developing a risk based audit plan, which of the following sources of information would provide the least value to the chief audit executive?
- A. User acceptance testing of the organization's enterprise resource planning application.
- B. Key business strategies adopted by the organization in the strategic plan.
- C. Risk assessments conducted by the board.
- D. Results from the organization's business process management program.
Answer: A
NEW QUESTION # 216
The internal audit activity of an investment company received a request to provide assurance on the risk management process. Preliminary discussion with senior management revealed that separate functions within the organization perform some form of risk management activities. Which of the following is the most effective tool for ensuring that risk management activities are coordinated among these functions?
- A. Analytical reviews.
- B. Assurance map.
- C. Delphi technique.
- D. Facilitated workshop.
Answer: B
Explanation:
Section: Volume D
NEW QUESTION # 217
Which of the following would be the least desirable criteria against which to judge current operations of an organization's treasury function?
- A. Finance textbook illustrations of generally accepted good treasury function practices.
- B. The operations of the treasury function as documented during the last audit engagement.
- C. Codification of best practices of the treasury function in relevant industries.
- D. Company policies and procedures delegating authority and assigning responsibilities.
Answer: B
NEW QUESTION # 218
An organization has acquired a new line of business. None of the organization's internal auditors have the required expertise to perform an internal audit of the new business line; therefore, the chief audit executive (CAE) has contracted the services of an external audit firm to perform the engagement. The CAE has assigned a member of the internal audit team to assist the external team with the engagement. According to the Standards, which of the following statements is true regarding supervision of the engagement?
- A. The CAE may rely upon the external firm's auditor in charge to supervise the engagement.
- B. The CAE should not assign an inexperienced staff member to assist with the engagement.
- C. The external firm's auditor in charge must defer to the judgment of the CAE for any disputes.
- D. The CAE is not responsible for the quality of an audit performed by an external firm.
Answer: C
NEW QUESTION # 219
An internal auditor is conducting an assessment of the organization's fraud controls. Which of the following would not be considered a preventive control?
1.Daily report that identifies unsuccessful system log-in attempts.
2.Weekly management communication with tips on identifying possible fraud.
3.E-mail alert sent to management for checks issued over $100,000.00.
4.New hire training to explain fraud and employee misconduct.
- A. 3 and 4 only
- B. 1 and 3 only
- C. 1 and 2 only
- D. 2 and 4 only
Answer: B
NEW QUESTION # 220
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IIA-CIA-Part2 certification exam is a computer-based test, consisting of 100 multiple-choice questions. Candidates have two and a half hours to complete the exam, and a passing score of 600 or higher out of 750 is required to obtain the certification. IIA-CIA-Part2 exam is available in multiple languages and can be taken at any Pearson VUE test center globally. Upon passing the exam, candidates receive the Practice of Internal Auditing certification, which is valid for three years, after which a recertification process is required to maintain the certification.
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