2023 Provide Updated IIA IIA-CIA-Part2 Dumps as Practice Test and PDF
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NEW QUESTION 210
Which of the following is a justifiable reason for omitting advance client notice when planning an audit engagement?
- A. Advance notice may result in management making corrections to reduce the number of potential deficiencies.
- B. The audit engagement has already been communicated and approved through the annual audit plan.
- C. Previous management action plans addressing prior internal audit recommendations remain incomplete.
- D. The engagement includes audit assurance procedures such as sensitive or restricted asset verifications.
Answer: D
NEW QUESTION 211
An audit of customer accounts receivable found that outstanding receivables as a percentage of revenue had increased significantly during the past two years. The increase was attributed to the extension of credit, at the urging of the marketing department, to a number of companies that were not creditworthy. Which of the following would be least useful in monitoring the disposition of this finding?
- A. Periodic updates from the controller regarding the status of corrective actions.
- B. Information from the credit and marketing personnel assigned the responsibility for reevaluating credit policies.
- C. Updates from the information technology division regarding implementation of a new accounts receivable system.
- D. Responses from the manager of accounts receivable regarding collection of outstanding receivables.
Answer: C
NEW QUESTION 212
Which of the following statements generally true regarding audit engagement planning?
- A. Internal auditors should prepare a dented audit program for testing controls
- B. Audit objectives should be general and do not change.
- C. The best source tor detailed process information is senior management
- D. Computer-assisted audit techniques are typically not useful during engagement planning
Answer: B
NEW QUESTION 213
A chief audit executive (CAE) reviews the supervision of an internal audit engagement Which of the following would most likely assure the CAE that the engagement had adequate supervision?
- A. The supervisor reviews weekly progress reports from the audit team members
- B. The engagement supervisor has an open door pokey for audit team members to discuss concerns
- C. The supervisor meets periodically with management in the reviewed area to get feedback during the engagement.
- D. The supervisor reviews and initials internal audit workpapers for the engagement
Answer: D
NEW QUESTION 214
An organization has a large number of vendors supplying goods to its various branches across the region.
The code of conduct statements signed by the employees specify that the employees or their families will not sell goods to the organization. However, during the internal audit of a branch, the internal auditor suspected that some of the employees may be supplying goods to the organization contrary to the code of conduct. The chief audit executive has requested that a thorough review be completed to identify the potential employee vendors. Of the following tests, it would be least useful to compare [List A] with [List B].
[List A]
[List B]
- A. Dates of payments to vendors
Dates of salary payments to employees - B. Addresses of vendors from the vendor database
Addresses of employees from the employee database - C. Vendor names
Employee names - D. Vendor bank account numbers
Employee bank account numbers
Answer: A
NEW QUESTION 215
Which of the following is the most appropriate step for the chief audit executive to take in order to avoid defamation of character of the principal suspect in a fraud investigation?
- A. Restrict the use of potentially damaging words to privileged reports or discussions.
- B. Restrict discussions of the fraud to members of management who express an interest in the investigation.
- C. Label all workpapers, reports, and correspondence of the internal audit activity as private.
- D. Destroy all investigation workpapers and reports if the fraud cannot be proven.
Answer: A
Explanation:
Section: Volume B
NEW QUESTION 216
The internal auditor's opinion in terms of due professional care should be:
- A. Based on experience and free of all bias.
- B. Limited to the effectiveness of internal controls.
- C. Based on sufficient factual evidence.
- D. Expressed only when consensus with top management has been achieved.
Answer: C
Explanation:
Section: Volume C
NEW QUESTION 217
While performing a follow-up of a concern about equipment-inventory tracking, which course of action is not necessary for the auditor to take?
- A. Ensure that the entity has begun to experience benefits as a result of resolving the issue.
- B. Ensure that controls have been implemented to prevent the issue from occurring again.
- C. Ensure that the inherent risk has been eliminated as a result of resolving the issue.
- D. Ensure that the steps being taken resolve the condition disclosed by the initial finding.
Answer: C
Explanation:
Section: Volume C
NEW QUESTION 218
After partially completing an internal control review of the accounts payable department, an auditor suspects that some type of fraud has occurred. To ascertain whether the fraud is present, the best sampling approach would be to use:
- A. Probability-proportional-to-size sampling to select a sample of vouchers processed by the department during the past year.
- B. Discovery sampling to select a sample of vouchers processed by the department during the past year.
- C. Simple random sampling to select a sample of vouchers processed by the department during the past year.
- D. Judgmental sampling to select a sample of vouchers processed by clerks who were identified by the department manager as acting suspiciously.
Answer: B
NEW QUESTION 219
New credit policies have been implemented in an automated order-entry system to improve the collection of receivables. Sales management has compiled several examples that show decreased sales and delayed order entry, and contends that these examples are a direct result of the new credit-policy constraints. Sales management's data and information provide.
- A. Irrelevant and argumentative information.
- B. Evidence that the new credit policies do not meet the stated corporate objective to improve collections.
- C. Feedback control data.
- D. A statistically valid conclusion about the impact of the new credit policies on customer goodwill.
Answer: C
Explanation:
Section: Volume A
NEW QUESTION 220
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 3 only
- B. 1 and 4 only
- C. 2 and 4 only
- D. 1 and 3 only
Answer: B
NEW QUESTION 221
An internal auditor is asked to perform an assurance engagement in the organization's newly acquired subsidiary When developing the objectives tor the engagement which ot the following statements describes the most important items that the auditor needs to consider?
- A. Previous performance of the subsidiary specifically its financial results over the last three years and the outcome of external audit reviews
- B. The qualifications and competencies of the subsidiary's management team and their understanding of risk and control
- C. Organizational strategy objectives, risks, control framework and the expectations of stakeholders regarding the audit
- D. The results of previous internal audits of the subsidiary the recommendations provided and whether the recommended actions have been implemented
Answer: B
NEW QUESTION 222
Which of the following files, when compared with billing records, would provide the best source of information for determining if all goods shipped are billed to customers?
- A. Pre-numbered customer invoices.
- B. Customer purchase orders.
- C. Pre-numbered shipping documents.
- D. Accounts receivable transactions.
Answer: C
NEW QUESTION 223
If an auditor used nonstatistical sampling instead of statistical sampling to estimate the value of inventory, which of the following would be true?
- A. The confidence level could not be quantified.
- B. The projected value of inventory would be less reliable.
- C. The precision would be larger.
- D. The risk of incorrect acceptance would be higher.
Answer: A
NEW QUESTION 224
When creating the internal audit plan, the chief audit executive should prioritize engagements based primarily on which of the following?
- A. The longest interval since the last examination of each audit universe item.
- B. The auditable areas required by regulatory agencies.
- C. The last available risk assessment.
- D. Requests from senior management and the board.
Answer: C
NEW QUESTION 225
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. I only
- B. I and II only
- C. II only
- D. III only
Answer: C
NEW QUESTION 226
An internal auditor is assigned to conduct an audit of security for a local area network (LAN) in the finance department of the organization. Investment decisions, including the use of hedging strategies and financial derivatives, use data and financial models which run on the LAN. The LAN is also used to download data from the mainframe to assist in decisions. Which of the following should be considered outside the scope of this security audit engagement?
- A. The ability of the LAN application to identify data items at the field or record level and implement user access security at that level.
- B. Investigation of the physical security over access to the components of the LAN.
- C. The level of security of other LANs in the company which also utilize sensitive data.
- D. Interviews with users to determine their assessment of the level of security in the system and the vulnerability of the system to compromise.
Answer: C
NEW QUESTION 227
When setting the scope for the identification and assessment of key risks and controls in a process, which of the following would be the least appropriate approach?
- A. Ensure the audit includes an assessment of manual and automated controls to determine whether business risks are effectively managed.
- B. Specify that the auditors need to assess only key controls, but may include an assessment of non-key controls if there is value to the business in providing such assurance.
- C. Develop the scope of the audit to include controls that are necessary to manage risk associated with a critical business objective.
- D. Develop the scope of the audit based on a bottom-up perspective to ensure that all business objectives are considered.
Answer: D
NEW QUESTION 228
Which of the following would provide the best audit evidence regarding the effectiveness of an applied research department?
- A. Develop a report on revenue generated by or cost savings directly attributable to newly developed products.
- B. Develop a cost-per-product analysis for products developed over the past five years.
- C. Compare the number of this year's new product developments to the number of new product developments for the past five years.
- D. Compare research as a percentage of revenue between this company and all major competitors in the same industry.
Answer: A
NEW QUESTION 229
According to the Standards, which of the following would have the least direct interest in the draft report of a compliance review of the purchasing function?
- A. Purchasing manager.
- B. Audit committee.
- C. Purchasing staff.
- D. Director of finance.
Answer: B
NEW QUESTION 230
Which of the following is least likely to help ensure that risk is considered in a work program?
- A. Risks are discussed with audit client.
- B. Client efforts to affect risk management are considered.
- C. All available information from the risk-based plan is used.
- D. Prior risk assessments are considered.
Answer: D
Explanation:
Section: Volume E
NEW QUESTION 231
A chief audit executive (CAE) is trying to balance the internal audit activity's needs for technical audit skills budget efficiency and staff development opportunities. Which of the following would best assist the CAE in achieving this balance1?
- A. Flat organizational structure
- B. Hierarchical organizational structure
- C. Strategic sourcing
- D. Loan staff arrangement
Answer: C
NEW QUESTION 232
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. Send confirmations, including zero-balance accounts, to vendors with whom the company normally does business.
- D. Examine supporting documentation of subsequent (after-period) cash disbursements and verify period of liability.
Answer: A
NEW QUESTION 233
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Updated IIA-CIA-Part2 Dumps Questions For IIA Exam: https://vcetorrent.examtorrent.com/IIA-CIA-Part2-prep4sure-dumps.html
