Free IIA-CIA-Part2 Braindumps Download Updated on Jan 15, 2022 with 600 Questions
IIA IIA-CIA-Part2 Exam Practice Test Questions
IIA IIA-CIA-Part2 Exam Syllabus Topics:
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NEW QUESTION 174
A chief audit executive has noticed that staff auditors are presenting more oral reports to supplement written reports. The best reason for the increased use of oral reports is that they:
- A. Can be delivered in an informal manner without preparation.
- B. Reduce the amount of testing required to support audit findings.
- C. Permit auditors to counter arguments and provide additional information that the audience may require.
- D. Can be prepared using a flexible format and reduce the information included in the written report.
Answer: C
NEW QUESTION 175
Which of the following might alert an auditor to the possibility of fraud in a division?
I. The division is not scheduled for an external audit this year.
II. Sales have increased by 10 percent.
III.
A significant portion of management's compensation is directly tied to reported net income of the division.
- A. III only
- B. I and II only
- C. I only
- D. I, II, and III
Answer: A
NEW QUESTION 176
Ordinarily, which of the following would not be an objective of an internal audit quality assurance review?
- A. Ensuring that the internal audit activity meets the external auditor's expectations.
- B. Ensuring the adequacy of the goals, mission and vision of the internal audit activity.
- C. Complying with specific standards for the professional practice of internal auditing.
- D. Ensuring that the internal audit activity has an audit charter approved by the board of directors.
Answer: A
NEW QUESTION 177
A limitation of using ratio analysis in an audit engagement is that it:
- A. Is an expensive method of testing.
- B. Requires computer software in order to develop meaningful interpretations of data.
- C. Often uses financial information provided by management which has not been reviewed for reliability and validity.
- D. Is useful only when comparisons can be made across other industries.
Answer: C
NEW QUESTION 178
A performance audit engagement typically involves:
- A. Review of financial statement information, including the appropriateness of various accounting treatments.
- B. Tests of compliance with policies, procedures, laws, and regulations.
- C. Appraisal of the environment and comparison against established criteria.
- D. Evaluation of organizational and departmental structures, including assessments of process flows.
Answer: C
NEW QUESTION 179
An internal audit activity is participating in the due diligence work for an acquisition that a company is considering. One engagement objective is to determine if the acquisition's accounts payable contain all outstanding liabilities. Which of the following audit procedures would not be relevant for this objective?
- A. Select a sample of accounts payable from the accounts payable list and verify the supporting receiving reports, purchase orders, and invoices.
- B. Trace receiving reports issued before the period end to the related vendor invoices and accounts payable list.
- C. Examine supporting documentation of subsequent (after-period) cash disbursements and verify period of liability.
- D. Send confirmations, including zero-balance accounts, to vendors with whom the company normally does business.
Answer: A
Explanation:
Section: Volume A
NEW QUESTION 180
When determining the nature, timing, and extent of follow up, the chief audit executive considers all of the following factors except:
- A. Significance of the reported observation or recommendation, degree of effort, and cost needed to correct the reported condition.
- B. Authority and responsibility of the person required to take corrective action.
- C. Complexity of the corrective action and time period involved.
- D. Impact that may result should the corrective action fail.
Answer: B
NEW QUESTION 181
During an audit of a retail organization, an internal auditor found a scheme in which the warehouse director and the purchasing agent diverted approximately $500,000 of goods to their own warehouse, then sold the goods to third parties. The fraud was not found earlier since the warehouse director updated the perpetual inventory records and then forwarded receiving reports to the accounts payable department for processing. Which of the following procedures would have most likely led to the discovery of the missing materials and the fraud?
- A. Select a random sample of receiving reports and trace to the recording in the perpetual inventory records. Note differences and investigate by type of product.
- B. Select a random sample of purchase orders and trace to receiving reports and to the records in the accounts payable department.
- C. Select a random sample of sales invoices and trace to the perpetual inventory records to see if inventory was on hand. Investigate any differences.
- D. Take an annual physical inventory, reconciling amounts with the perpetual inventory records. Note the pattern of differences and investigate.
Answer: D
NEW QUESTION 182
Which of the following would most likely cause an internal auditor to consider adding fraud work steps to the audit program?
- A. An employee's reported concerns.
- B. Lack of an ethics policy.
- C. Incentives and bonus programs.
- D. Improper segregation of duties.
Answer: A
Explanation:
Section: Volume E
NEW QUESTION 183
Which of the following statements is true pertaining to interviewing a fraud suspect?
1.Information gathered can be subjective as well as objective to be useful.
2.The primary objective is to obtain a voluntary written confession.
3.The interviewer is likely to begin the interview with open-ended questions.
4.Video recordings always should be used to provide the highest quality evidence.
- A. 1 only
- B. 4 only
- C. 2 and 4
- D. 1 and 3
Answer: D
NEW QUESTION 184
Which of the following would provide the best audit evidence regarding the effectiveness of an applied research department?
- A. Compare research as a percentage of revenue between this company and all major competitors in the same industry.
- B. Develop a report on revenue generated by or cost savings directly attributable to newly developed products.
- C. Compare the number of this year's new product developments to the number of new product developments for the past five years.
- D. Develop a cost-per-product analysis for products developed over the past five years.
Answer: B
NEW QUESTION 185
Many questionnaires are made up of a series of different questions that use the same response categories (for example: strongly agree, agree, neither, disagree, strongly disagree). Some designs will have different groups of respondents answer alternate versions of the questionnaire that present the questions in different orders and reverse the orientation of the endpoints of the scale (for example: agree on the right and disagree on the left).
The purpose of such questionnaire variations is to:
- A. Eliminate intentional misrepresentations.
- B. Make it possible to get information about more than one population parameter using the same questions.
- C. Reduce the effects of pattern response tendencies.
- D. Test whether respondents are reading the questionnaire.
Answer: C
NEW QUESTION 186
During an audit, an employee, who does not want to be identified, offers to provide information that would be damaging to the organization and may concern illegal activities. Which of the following actions by the auditor would not be consistent with the IIA Code of Ethics and Standards?
- A. Suggesting that the employee consider talking to legal counsel.
- B. Informing the employee of other methods of communicating this type of information.
- C. Promising to maintain the employee's anonymity and listening to the information.
- D. Informing the employee that an attempt will be made to keep the source of the information confidential while looking into the matter further.
Answer: C
NEW QUESTION 187
A chief audit executive is preparing interview questions for the upcoming recruitment of a senior internal auditor. According to IIA guidance, which of the following attributes shows a candidate's ability to probe further when reviewing incidents that have the appearance of misbehavior?
- A. Integrity.
- B. Curiosity.
- C. Initiative.
- D. Flexibility.
Answer: B
NEW QUESTION 188
Which of the following situations would justify the removal of a finding from the final audit report?
- A. Management has provided additional information that contradicts the findings.
- B. Management believes that the finding is insignificant and unfairly included in the report.
- C. Management disagrees with the report findings and conclusions in their responses.
- D. Management has already satisfactorily completed the recommended corrective action.
Answer: A
NEW QUESTION 189
An internal auditor compared the number of human resources professionals per employee withindustry standards. This comparison would assist the auditor in evaluating which of the following areas?
- A. Current level of performance of the human resources department.
- B. Adequacy of controls over hiring new employees.
- C. Degree of compliance with human resources policies.
- D. Sufficiency of controls over payroll rate increases.
Answer: A
NEW QUESTION 190
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