[UPDATED 2023] IIA IIA-CIA-Part2 Questions Prepare with Free Demo of PDF

NEW 2023 Certification Sample Questions IIA-CIA-Part2 Dumps & Practice Exam

IIA-CIA-Part2 certification exam is designed to test the knowledge and skills of individuals who are involved in internal auditing. IIA-CIA-Part2 exam covers a wide range of topics, including risk management, internal control, governance, and compliance. It is intended to assess the candidate's ability to perform effectively in a variety of internal auditing situations.

IIA-CIA-Part2 Exam, also known as the Practice of Internal Auditing, is one of the three exams required to become a Certified Internal Auditor (CIA). IIA-CIA-Part2 exam covers a range of topics related to internal auditing, including governance and risk management, communication skills, and business processes. It is designed to test the candidate's knowledge of the principles, practices, and standards of internal auditing.

 

NEW QUESTION # 214
When forming an opinion on the adequacy of management's systems of internal control, which of the following findings would provide the most reliable assurance to the chief audit executive?
- During an audit of the hiring process in a law firm, it was discovered that potential employees' credentials were not always confirmed sufficiently. This process remained unchanged at the following audit.
- During an audit of the accounts payable department, auditors calculated that two percent of accounts were paid past due. This condition persisted at a follow up audit.
- During an audit of the vehicle fleet of a rental agency, it was determined that at any given time, eight percent of the vehicles were not operational. During the next audit, this figure had increased.
- During an audit of the cash handling process in a casino, internal audit discovered control deficiencies in the transfer process between the slot machines and the cash counting area. It was corrected immediately.

• A. 2 and 3 only.
• B. 1 and 4 only.
• C. 1 and 3 only.
• D. 2 and 4 only.

Answer: B

NEW QUESTION # 215
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. Prior risk assessments are considered.
• C. Client efforts to affect risk management are considered.
• D. All available information from the risk-based plan is used.

Answer: B

NEW QUESTION # 216
Which of the following is not likely to be included as an audit step when assessing vendor performance policies?

• A. Determine whether agreed-upon lot sizes were sent by vendors.
• B. Determine whether only authorized items were received from vendors.
• C. Determine whether the balances owed to vendors are correct.
• D. Determine whether the quality of the goods purchased from the vendors has been satisfactory.

Answer: C

NEW QUESTION # 217
Which of the following would be an appropriate role of the internal audit function?

• A. Evaluate the effectiveness of the organization's ethics-related activities.
• B. Establish the ethics policies for the organization.
• C. Determine the consequences for ethics violations.
• D. Be responsible for the management of a whistle blowing hotline.

Answer: A

NEW QUESTION # 218
Which of the following is an effective approach for internal auditors to take to improve collaboration with audit clients during an engagement?
1. Obtain control concerns from the client before the audit begins so the internal auditor can tailor the scope accordingly.
2. Discuss the engagement plan with the client so the client can understand the reasoning behind the approach.
3. Review test criteria and procedures where the client expresses concerns about the type of tests to be conducted.
4. Provide all observations at the end of the audit to ensure the client is in agreement with the facts before publishing the report.

• A. 1 and 2 only
• B. 2 and 3 only
• C. 1 and 4 only
• D. 3 and 4 only

Answer: A

NEW QUESTION # 219
The final engagement communication contains the following observation:
The internal auditor discovered that three of the 10 contracts reviewed failed to meet the organization's competitive bidding requirements Management explained that senior management deemed these purchases to be critical and awarded them as sole-source." Which of the following components is missing in the documentation of the observation?

• A. Condition
• B. Criteria.
• C. Effect
• D. Cause

Answer: C

NEW QUESTION # 220
According to IIA guidance, which of the following strategies would add the least value to the achievement of the internal audit activity's (IAA's) objectives?

• A. Align organizational activities to internal audit activities and measure according to the approved IAA performance measures.
• B. Use the results of IAA engagement and advisory reporting to guide current and future internal audit activities.
• C. Establish a format and frequency for IAA reporting that is appropriate and aligns with the organization's governance structure.
• D. Establish a periodic review of monitoring and reporting processes to help ensure relevant IAA reporting.

Answer: A

NEW QUESTION # 221
After the team member who specialized in fraud investigations left the internal audit team, the chief audit executive decided to outsource fraud investigations to a third party service provider on an as needed basis.
Which of the following is most likely to be a disadvantage of this outsourcing decision?

• A. Flexibility.
• B. Cost.
• C. Independence.
• D. Familiarity.

Answer: D

NEW QUESTION # 222
An auditor analyzed a payroll system's data files for unusual activity, such as excessive overtime hours, unusual fluctuations in pay rates, and excessive vacation time. The application controls being verified by this analysis are:

• A. Edit and validation controls.
• B. Programmed balancing controls.
• C. Rejected and suspense item controls.
• D. Controls over update access to the database.

Answer: A

Explanation:
Section: Volume A

NEW QUESTION # 223
Which of the following best describes the most important criteria when assigning responsibility for specific tasks required in an audit engagement?

• A. Auditors must be given assignments based primarily upon their years of experience.
• B. All audit team members must have the skills necessary to satisfactorily complete any task that will be required in the audit engagement.
• C. Tasks must be assigned to the audit team member who is most qualified to perform them.
• D. All auditors assigned an audit task must have the knowledge and skills necessary to complete the task satisfactorily.

Answer: D

NEW QUESTION # 224
Which of the following describes an internal auditor's responsibilities to include audit procedures to detect fraud in audits of a multinational organization?

• A. Proper audit procedures, when carried out with due professional care, will guarantee that fraud, if present, will be detected.
• B. If significant control weaknesses are detected, additional tests should be directed toward other indicators of fraud.
• C. 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.
• D. Internal auditors do not have any specific responsibilities with respect to including fraud-related audit procedures.

Answer: B

NEW QUESTION # 225
The chief risk officer (CRO) of a large manufacturing organization decided to facilitate a workshop for process managers and staff to identify opportunities for improving productivity and reducing defects. Which of the following is the most likely reason the CRO chose the workshop approach?

• A. Responses can be confidential, thus encouraging participants to be candid expressing their concerns.
• B. Workshop participants have an opportunity to learn while contributing ideas toward the objectives.
• C. Workshops do not require extensive facilitation skills and are therefore ideal for nonauditors.
• D. It minimizes the amount of time spent and cost incurred to gather the necessary information.

Answer: B

NEW QUESTION # 226
As part of an operational audit, an auditor compared records of current inventory with usage during the prior two-year period and determined that the spare parts inventory was excessive. What step should the auditor perform first?

• A. Determine the effects of a stock-out on the organization's profitability.
• B. Determine whether a clear policy exists for setting inventory limits.
• C. Determine whether purchases were properly recorded.
• D. Determine who approved the purchase orders for the spare parts.

Answer: B

Explanation:
Section: Volume B

NEW QUESTION # 227
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. 1 and 3 only
• C. 2, 3, and 4 only
• D. 1 and 2 only

Answer: B

Explanation:
Section: Volume C

NEW QUESTION # 228
According to the Standards, which of the following is applicable to the internal audit activity's quality assurance and improvement program?

• A. Periodic monitoring of the internal audit activity should be done.
• B. The review of assurance services should be the primary focus.
• C. All aspects of the internal audit activity should be evaluated.
• D. An external assessment should be obtained every three years.

Answer: C

NEW QUESTION # 229
An organization has recently incurred significant cost overruns on one of its construction projects.
Management suspects that these overruns were caused by the contractor improperly charging for costs related to contract change orders. Which of the following procedures are appropriate for testing this suspicion?
1. Determine if the contractor has received proper approval of change orders from management.
2. Determine if the contractor has billed for original contract work cancelled by the change orders.
3. Determine if the contractor has charged change orders with costs already billed to the original contract.
4. Determine if the contractor has been paid for change orders that have not yet been completed.

• A. 2 and 3 only
• B. 1 and 3 only
• C. 3 and 4 only
• D. 1 and 2 only

Answer: A

NEW QUESTION # 230
According to IIA guidance, which of the following are potential benefits of using an assurance map?

• A. Indication of any gaps in assurance coverage, and improved relevance of assurance recommendations.
• B. Enhanced effectiveness of assurance providers, and improved relevance of assurance recommendations.
• C. Identification of duplicate or overlapping assurance activities, and improved relevance of assurance recommendations.
• D. Indication of gaps in assurance coverage, and enhanced effectiveness of assurance providers.

Answer: D

NEW QUESTION # 231
Which of the following would be a legitimate action for the internal auditor to take when monitoring audit engagement results?
Disregard a certain risk because management and the board accepted the risk in the past.
Abdicate the responsibility for a particular risk because it is not part of the audit plan.
Obtain agreement from senior management that unresolved audit issues will be reported to the board.Request corrective action from management in writing.

• A. 3 and 4 only.
• B. 2 and 3 only.
• C. 1 and 3 only.
• D. 1, 2, and 4 only.

Answer: A

NEW QUESTION # 232
According to the International Professional Practices Framework, which of the following would not be considered when performing an initial risk assessment in engagement planning?

• A. Management's methodology for defining risk criteria.
• B. The reliability of management's assessment of risk.
• C. Risks in related activities relevant to the activity under review.
• D. Management's process for monitoring, reporting, and resolving risk issues.

Answer: A

Explanation:
Section: Volume D

NEW QUESTION # 233
In a review of an electronic data interchange application using a third-party service provider, the auditor should:
1. Ensure encryption keys meet International Organization for Standardization (ISO) standards.
2. Determine whether an independent review of the service provider's operation has been conducted.
3. Verify that only public-switched data networks are used by the service provider.
4. Verify that the service provider's contracts include necessary clauses, such as the right to audit.

• A. II and IV only
• B. I and II only
• C. I and IV only
• D. II and III only

Answer: A

NEW QUESTION # 234
When a significant finding is noted early during a review of the accounts payable function, which next course of action is best for communicating the issue?

• A. Call a meeting and discuss me issue with the audit committee
• B. Intern accounting management via an interim memorandum update
• C. Alert the CEO as soon as the issue is discovered
• D. Note the item in the workpapers for inclusion in the final audit report

Answer: C

NEW QUESTION # 235
Which of the following is the correct ratio to use in calculating the dollar value of the population if the auditor is using ratio estimation?
Number of Items Audited Value Carrying Amount Sample
$500,000 $480,000 Population 3,000 $5,000,000

• A. 1.04
• B. 0.10
• C. 10.00
• D. 0.96

Answer: A

NEW QUESTION # 236
Because of an abundance of high priority requests from management, an internal audit activity no longer has the resources to meet all of its commitments contained in the annual audit plan. Which of the following would be the best course of action for the chief audit executive to follow?

• A. Present a reassessment of the plan to the board and senior management for consideration.
• B. Reassess the plan and either cancel or divert resources away from the lowest priority activities.
• C. Continue with the plan and seek opportunities to adjust priorities and reallocate resources.
• D. Advise the board immediately and seek their support for additional resources to meet the needs of the plan.

Answer: A

Explanation:
Section: Volume C
Explanation/Reference:

NEW QUESTION # 237
When interviewing an individual in relation to a fraud investigation, which course of action
should the internal auditor follow?

• A. Refrain from deviating from the list of questions prepared before the interview.
• B. Establish a rapport with the subject to encourage openness.
• C. Discontinue questioning once the individual has confessed to the fraud.
• D. Assure the individual that the results of the interview will remain confidential.

Answer: B

NEW QUESTION # 238
According to IIA guidance, which of the following strategies would be the least effective in helping a chief audit executive build a stronger relationship with the board?

• A. Consider the possible repercussions created by commentary on deficiencies.
• B. Consider formality and tone of communications to ensure they are appropriate.
• C. Minimize instances of ad hoc communications with board members.
• D. Avoid making presumptuous comments without sufficient facts.

Answer: C

NEW QUESTION # 239
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