IIA-CIA-Part2 Dumps 2022 - New IIA IIA-CIA-Part2 Exam Questions
Free IIA-CIA-Part2 Braindumps Download Updated on Jan 16, 2022 with 600 Questions
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NEW QUESTION 81
Which of the following are typical steps in the design of an organization's performance measurement system?
- A. Understand organizational strategy; perform a situational assessment; establish measurement categories; and take actions based upon measurement results.
- B. Establish a measurement plan; create an organizational strategy linked to those measurements; trend measurement data; and measure data variability.
- C. Perform a situational assessment; generate macro measurements; review measurement data; and change strategy based upon measurement results.
- D. Categorize performance measures; establish a data collection plan; analyze data; and predict future performance.
Answer: A
NEW QUESTION 82
According to IIA guidance, which of the following is true regarding audit supervision?
1. Supervision should be performed throughout the planning, examination, evaluation, communication, and follow-up stages of the audit engagement.
2. Supervision should extend to training, time reporting, and expense control, as well as administrative matters.
3. Supervision should include review of engagement workpapers, with documented evidence of the review.
- A. 1 and 2 only
- B. 1 and 3 only
- C. 2 and 3 only
- D. 1, 2, and 3
Answer: D
NEW QUESTION 83
According to the International Professional Practices Framework, which of the following statements is correct regarding the communication of audit results?
I. Summary reports may be issued separately from or in conjunction with the final report.
II. Interim reports may be written or oral.
III. Detailed reports should always be issued to the audit committee.
IV. Interim reports should be used to communicate information which requires immediate attention.
- A. I and III only
- B. I, II, and IV only
- C. II and IV only
- D. I, II, III, and IV.
Answer: B
Explanation:
Section: Volume A
Explanation/Reference:
NEW QUESTION 84
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.
Answer: D
Explanation:
Section: Volume B
NEW QUESTION 85
An auditor for a major retail company suspects that inventory fraud is occurring at three stores which have high costs of goods sold. Which of the following audit activities would provide the most persuasive evidence that fraud is occurring?
- A. Schedule a surprise inventory audit to include a physical inventory and investigate areas of inventory shrinkage.
- B. Interview the three individual store managers to determine if their explanations about the observed differences are the same, and then compare their explanations to that of the section manager.
- C. Select a sample of individual store prices and compare them with the sales entered on the cash register for the same items.
- D. Use an integrated test facility (ITF) to compare individual sales transactions with test transactions submitted through the ITF and investigate all differences.
Answer: A
NEW QUESTION 86
Which of the following is correct with respect to roles within an enterprise-wide risk management process?
1. The board provides oversight to the risk management process.
2. Executive management owns the risk management framework.
3. Senior management is assigned ownership of risks.
4. Internal audit modifies the risk assessment determined by management.
- A. 1, 2, 3, and 4
- B. 1 and 2 only
- C. 3 and 4 only
- D. 1, 2, and 3 only
Answer: D
NEW QUESTION 87
An auditor evaluating excessive product rejection rates should investigatE.
I.
Communication between sales and production departments on sales returns.
II.
Volume of product sales year-to-date in comparison to prior year-to-date.
III.
Changes in credit ratings of customers versus sales to those customers.
IV.
Detailed product scrap accounts and accumulations.
- A. II, III, and IV only
- B. I and III only
- C. I and IV only
- D. I, II, III, and IV.
Answer: C
NEW QUESTION 88
Checklists used to assess audit risk have been criticized for all of the following reasons except:
- A. Inappropriately implying equal weight to each item on the checklist.
- B. Providing a false sense of security that all relevant factors are addressed.
- C. Being incapable of translating the experience or sound reasoning intended to be captured by each item on the checklist.
- D. Decreasing the uniformity of data acquisition.
Answer: D
NEW QUESTION 89
Given the scarcity of internal audit resources, a chief audit executive (CAE) decided not to schedule a follow-up of audit recommendations when developing engagement work schedules. Does the CAE's decision violate the Standards?
- A. No, because when there is evidence of sufficient motivation by the client, there is no need for follow-up action.
- B. Yes, because scarcity of resources is not a sufficient reason to omit follow-up action.
- C. Yes, because the Standards require the auditors to determine whether the client has appropriately implemented all of the auditor's recommendations.
- D. No, because the Standards do not specify whether follow-up is needed.
Answer: B
NEW QUESTION 90
A company used simple regression analysis to analyze maintenance costs against machine hours (MH) for a 26-week period when the plant was in full operation. The regression yielded the following estimated cost function:
Maintenance Cost = $60 + $0.25/MH
The regression analysis also generated a coefficient of determination (R2), or goodness of fit, of
0.85. Which of the following statements regarding this regression analysis is appropriate?
- A. The coefficient of determination of R2 = 0.85 indicates that the goodness of fit is poor because the value is close to the maximum value of one.
- B. The $0.25 component is the slope coefficient of the cost estimate and represents the average variable maintenance cost per machine hour.
- C. The $60 component represents the best estimate of fixed maintenance costs for the company in a shutdown situation.
- D. This regression can be used to determine the maintenance cost for any period at any activity level by substituting the machine hours in the equation.
Answer: B
NEW QUESTION 91
Which of the following would be an appropriate and effective control self-assessment approach in an organization with an authoritative culture?
I. Facilitated meeting
II. Survey
III.
Management-produced analysis
- A. I and III only
- B. II and III only
- C. I only
- D. I, II, and III
Answer: B
NEW QUESTION 92
Which of the following will be an appropriate course of action when an auditor disagrees with a client about a well-documented audit finding?
- A. Defer reporting the item and plan to perform more detailed work during the next audit.
- B. Change the finding so that it is acceptable to the client.
- C. Address the issue with senior management and the board for resolution prior to issuing the final report.
- D. Include both the audit finding and the client's position in the audit report.
Answer: D
NEW QUESTION 93
An organization does not have a formal risk management function. According to the Standards, which of the following are conditions where the internal audit activity (IAA) may provide risk management consulting?
1.There is a clear strategy and timeline to migrate risk management responsibility back to management.
2.The IAA has the final approval on any risk management decisions.
3.The IAA does not give objective assurance on any part of the risk management framework for which it is responsible.
4.The nature of services provided to the organization is documented in the internal audit charter.
- A. 2, 3, and 4 only
- B. 1, 2, and 4 only
- C. 1, 3, and 4 only
- D. 1, 2, and 3 only
Answer: C
NEW QUESTION 94
Which of the following statements is true?
- A. If management chooses not to take action on internal audit's assurance engagement observation, the chief audit executive (CAE) has a responsibility to propose an action plan to the board.
- B. Internal audit's responsibility for an assurance engagement observation ends when management implements changes to remediate the observation.
- C. When management decides to accept the risk of not taking action on an assurance observation, the (CAE) is responsible for judging whether or not that decision is prudent.
- D. An assurance engagement observation is considered remediated when management's corrective action plan is approved by the board.
Answer: C
NEW QUESTION 95
An audit of a Web-based third-party payment processor determined that a programming error enabled customers to create multiple accounts for each mailing address. This caused problems during the processing of credit card transactions. Management agreed to correct the program and notify customers with multiple accounts that the accounts would be consolidated. What should the auditor do in response?
I. Amend the scope of the subsequent audit to verify that the program was corrected and that accounts were consolidated.
II. Evaluate the adequacy and effectiveness of the corrective action proposed by management.
III. Schedule a follow-up review to verify that the program was corrected and the accounts were consolidated.
IV.
Do nothing because management has agreed to address the problem.
- A. I and II only
- B. IV only
- C. II and III only
- D. III only
Answer: C
NEW QUESTION 96
A payroll clerk enters payroll transactions into the general ledger. The staff accountant reconciles the payroll ledgers. The payroll manager issues the manual payroll checks. The checks aremaintained in a locked cabinet. The chief financial officer secures the keys to the cabinet. The payroll clerk distributes the manual checks.
The payroll manager reconciles the bank statements monthly. Which of the following audit steps best addresses the risk of fraud in the payroll process?
- A. Vouch a sample of items on bank reconciliations to supporting documentation.
- B. Determine whether an approved list of voided checks exists.
- C. Determine whether the cabinet keys are secured properly.
- D. Examine whether the payroll manager approves the reconciliations of ledgers.
Answer: A
NEW QUESTION 97
Which of the following is most appropriate when conducting an interview during the course of a fraud investigation?
- A. Schedule the interview well in advance.
- B. Explain the detailed purpose to the interviewee.
- C. Have a witness present during the interview.
- D. Assume that the interviewee is guilty.
Answer: C
NEW QUESTION 98
Which of the following techniques could be used to evaluate the effectiveness of changes to the operation of a computer help line?
- A. Benchmarking.
- B. Walk-throughs.
- C. Baseline measurements.
- D. Quality circles.
Answer: C
NEW QUESTION 99
According to the International Professional Practices Framework, which of the following is correct regarding conducting and reporting follow-up activities by the internal audit activity (IAA)?
- A. A newly appointed auditor immediately proceeds to conduct follow-up testing based on previous work performed for the engagement and then reports the results to the chief audit executive (CAE).
- B. In situations where the identified risk may have a significant impact to the business and senior management has accepted the risk, it is not necessary for the CAE to inform the board of the decision.
- C. Management has stopped implementing several key recommendations citing a growing disagreement with their effectiveness. The auditor communicates the situation to the CAE who then escalates the matter to senior management.
- D. Due to management changes, the IAA is advised by management that no further work will be done. Further follow-up work is not required as management has accepted the related risk.
Answer: C
NEW QUESTION 100
In a client satisfaction survey for an internal audit engagement, client management should be asked to assess which of the following factors?
I.Audit team's knowledge of the audited area.
II.
Usefulness of the audit results.
III.
Quality of management of the internal audit activity.
IV.
Clarity of the scope and objectives of the audit engagement.
- A. I and II only.
- B. I, II, and IV only.
- C. II and IV only.
- D. I, III, and IV only.
Answer: B
NEW QUESTION 101
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
Explanation:
Section: Volume A
NEW QUESTION 102
A payroll clerk enters payroll transactions into the general ledger. The staff accountant reconciles the payroll ledgers. The payroll manager issues the manual payroll checks. The checks are maintained in a locked cabinet. The chief financial officer secures the keys to the cabinet. The payroll clerk distributes the manual checks.
The payroll manager reconciles the bank statements monthly. Which of the following audit steps best addresses the risk of fraud in the payroll process?
- A. Vouch a sample of items on bank reconciliations to supporting documentation.
- B. Determine whether an approved list of voided checks exists.
- C. Determine whether the cabinet keys are secured properly.
- D. Examine whether the payroll manager approves the reconciliations of ledgers.
Answer: A
Explanation:
Section: Volume D
NEW QUESTION 103
As part of an operational audit of the shipping department, an auditor selected a sample of 45 daily shipping logs from the department's files. On 44 of the days, the log contained a sufficient number of shipments to meet the department's daily quota. Based on this test, the auditor concluded that the shipping department was effective at meeting its quotas. Which of the following is true about the auditor's conclusion?
- A. The number of items selected for testing is inadequate to justify the conclusion.
- B. This conclusion would negate any need to perform tests of efficiency.
- C. None of the above.
- D. The shipping department is effective in meeting its responsibilities.
Answer: C
NEW QUESTION 104
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