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To be eligible to take the IIA-CIA-Part2 exam, candidates must have already passed the IIA-CIA-Part1 exam or be a Certified Internal Auditor (CIA) in good standing. Candidates must also meet the IIA's experience requirements, which vary based on their educational background. For example, candidates with a bachelor's degree need at least 24 months of internal auditing experience, while candidates with a master's degree need only 12 months.
IIA-CIA-Part2 exam is a globally recognized certification that demonstrates a candidate's expertise in internal auditing practices. Practice of Internal Auditing certification is particularly valuable for individuals working in internal audit departments, as it enhances their credibility and validates their knowledge and skills. Practice of Internal Auditing certification exam is based on the International Professional Practices Framework (IPPF), which is a globally recognized framework for internal auditing.
NEW QUESTION # 22
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. It minimizes the amount of time spent and cost incurred to gather the necessary information.
- 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. Responses can be confidential, thus encouraging participants to be candid expressing their concerns.
Answer: B
NEW QUESTION # 23
According to the International Professional Practices Framework, which of the following is not an objective of the exit conference?
- A. Resolve disagreements.
- B. Review audit recommendations.
- C. Plan future engagements.
- D. Receive client feedback and clarification.
Answer: C
NEW QUESTION # 24
As a result of a recent discovery of false information on employment applications, an internal auditor has reviewed hiring procedures. Which of the following represents a weakness in the control system?
I. Applicants are not required to have their signed applications legally authenticated.
II. Applicants' educational information is not validated with the educational institution before employment is offered.
III. Information related to applicants' long-term work history is not validated before employment is offered.
- A. I and II only
- B. II and III only
- C. III only
- D. I, II, and III
Answer: B
Explanation:
Section: Volume B
NEW QUESTION # 25
Which of the following is the primary purpose of financial statement audit engagements?
- A. To provide a review of routine financial reports, including analyses of selected accounts for compliance with generally accepted accounting principles.
- B. To assess the efficiency and effectiveness of the accounting department.
- C. To provide an analysis of business process controls in the accounting department, including tests of compliance with internal policies and procedures.
- D. To evaluate organizational and departmental structures, including assessments of process flows related to financial matters.
Answer: A
NEW QUESTION # 26
A manager of one of a retailer's several retail outlets is stealing cash from cash sales, recording the sales as accounts receivable, and subsequently writing off the fictitious accounts receivable as bad debts. Which of the following comparisons would be most effective in signaling the possibility of such a fraud?
- A. Percentage of past-due accounts receivable, compared to that of previous years.
- B. Percentage of past-due accounts receivable, compared to that of the other outlets.
- C. Bad debt expense as a percentage of sales, compared to that of the other outlets.
- D. Bad debt expense as a percentage of sales, compared to that of previous years.
Answer: C
Explanation:
Section: Volume B
NEW QUESTION # 27
Which of the following internal control attributes should internal auditors consider testing during a review of the board of directors?
- A. The organization's employee recruiting and retention policies
- B. The presence of an independent critical mass
- C. The articulated internal control objectives of the organization
- D. The established philosophy and operating style of senior management
Answer: C
NEW QUESTION # 28
An internal auditor collected several employee testimonials Which of the following is the best action for the internal auditor to take before drawing a conclusion?
- A. Ensure the testimonials are well documented
- B. Corroborate testimonials with the results from other soft control techniques
- C. Review the testimonials with the interviewed employees
- D. Substantiate the testimonials with physical or documentary evidence
Answer: B
NEW QUESTION # 29
While conducting an audit of a third party's Web-based payment processor, an internal auditor discovers that a programming error allows customers to create multiple accounts for a single mailing address. Management agrees to correct the program and notify customers with multiple accounts that the accounts will be consolidated. Which of the following actions should the auditor take?
1. Schedule a follow-up review to verify that the program was corrected and the accounts were consolidated.
2. Evaluate the adequacy and effectiveness of the corrective action proposed by management.
3. Amend the scope of the subsequent audit to verify that the program was corrected and that accounts were consolidated.
4. Submit management's plan of action to the external auditors for additional review.
- A. 1 and 2
- B. 1 and 4
- C. 3 and 4
- D. 2 and 3
Answer: A
Explanation:
Section: Volume E
Explanation/Reference:
NEW QUESTION # 30
During a routine audit of a customer service hotline, an internal auditor noticed that an unusually high number of customer complaints pertained to payments not being applied to the customers' accounts.
Which of the following would most likely be the reason for the high volume of complaints?
- A. Check tampering by an employee.
- B. An ineffective customer service department.
- C. Submission of fraudulent expense reports.
- D. Poor controls in the invoice approval processes.
Answer: A
NEW QUESTION # 31
An internal auditor submitted a report containing recommendations for management to enhance internal controls related to investments. To follow up, which of the following is the most appropriate action for the internal auditor to take?
- A. Follow up during the next scheduled audit.
- B. Seek a management assurance declaration.
- C. Observe corrective measures.
- D. Conduct appropriate testing to verify management responses.
Answer: D
NEW QUESTION # 32
When estimating the impact of an inherent risk, which of the following should internal auditors consider?
- A. Financial and nonfinancial factors related to the risk
- B. The residual risk following implementation of appropriate controls
- C. The number of risks identified on the heat map
- D. The probability and frequency of occurrence
Answer: D
NEW QUESTION # 33
An audit identified a number of weaknesses in the configuration of a critical client/server system. Although some of the weaknesses were corrected prior to the issuance of the audit report, correction of the rest will require between six and 18 months for completion. Consequently, management has developed a detailed action plan, with anticipated completion dates, for addressing the weaknesses. Which of the following is the most appropriate course of action for the chief audit executive to take?
- A. Assess the adequacy of the action plan and monitor key dates and deliverables.
- B. Evaluate statistics related to unplanned system outages, unauthorized access attempts, and denials of service to assess the effectiveness of corrections.
- C. Reassign information systems auditors to assist the information technology department in correcting the weaknesses.
- D. Schedule a follow-up audit engagement to assess the status of corrective action.
Answer: A
NEW QUESTION # 34
A bank is developing an integrated customer information system. The type of audit involvement that would most likely help avoid implementation of a system that does not cover all types of accounts would be:
- A. An access control review.
- B. An application control review.
- C. A design review.
- D. A source code review.
Answer: C
NEW QUESTION # 35
An internal auditor recommended that an organization implement computerized controls in its sales system in order to prevent sales representatives from executing contracts in excess of their delegated authority levels. A follow-up review found that the sales system had not been modified, but a process had been implemented to obtain written approval by the vice president of sales for all contracts in excess of $1 million. The chief audit executive (CAE) would be justified in reporting this situation to the organization's board iF.
I.
In the opinion of the CAE, the level of residual risk assumed by senior management is too high.
II.
Testing of compliance with the new process finds that all new contracts in excess of $1 million have been approved by the vice president of sales.
III.
The cost of modifying the sales system to include a preventive control is less than $100,000.
- A. I and III only
- B. III only
- C. I, II, and III
- D. I only
Answer: D
NEW QUESTION # 36
As part of a preliminary survey of the purchasing function, an internal auditor reads the department's policies and procedures manual and concludes that the manual describes the processing steps clearly and contains an appropriate internal control design. The next engagement objective is to evaluate the operating effectiveness of internal controls. Which procedure would fulfill this objective most effectively?
- A. Perform a design test.
- B. Perform a systems test.
- C. Perform an efficiency test.
- D. Perform a compliance test.
Answer: D
NEW QUESTION # 37
Which of the following statements regarding the risk management process' support of the internal audit activity is true?
- A. The risk management process can provide more extensive internal audit services to the organization if it does not have an internal audit department
- B. The risk management process establishes an organization-specific documented risk management framework.
- C. The risk management process supports internal audit by evaluating whether critical controls are adequate and effective.
- D. The risk management process can determine whether all significant risks have been identified and are being treated.
Answer: A
NEW QUESTION # 38
Which of the following must an auditor establish in order to demonstrate that fraud has occurred?
- A. Existence of an internal control deficiency.
- B. The suspect's intent.
- C. Monetary damage to the victim.
- D. Evidence of collusion.
Answer: B
NEW QUESTION # 39
According to IIA guidance, which of the following are benefits to the internal audit activity when conducting an assurance mapping exercise?
- A. Identification of gaps in risk coverage, and consolidation of risk reporting efforts.
- B. Resolution of identified testing errors, and consolidation of risk reporting efforts.
- C. Identification of gaps in risk coverage, and minimization of duplicate assurance efforts.
- D. Resolution of identified testing errors, and miminization of duplicate assurance efforts.
Answer: C
NEW QUESTION # 40
During an information security audit, an auditor discovers that the current disaster recovery plan was developed three years ago but never tested. There have been significant changes to information systems since the plan was developed. The auditor should:
- A. Update the recovery plan for management as part of the review.
- B. Review the recovery plan and report weaknesses to management.
- C. Recommend that management and users update and test the recovery plan.
- D. Ask management to test the recovery plan immediately.
Answer: C
NEW QUESTION # 41
Which of the following is an advantage of an interim report?
I.An interim report provides timely feedback to the audit engagement client.
II.
An interim report provides a mechanism for communicating information on red flags promptly while they are being investigated.
III.
An interim report provides an opportunity for auditor follow-up of findings before the engagement is completed.
IV.
An interim report increases the probability that corrective action will be initiated more quickly.
- A. I, III, and IV only.
- B. I, II, III, and IV.
- C. II and III only.
- D. I and IV only.
Answer: A
NEW QUESTION # 42
The board of directors expressed concerns about potential external risks that could impact the organization s ability to meet its annual objectives and goals The board requested consulting services from the internal audit activity to gain insight regarding the external risks Which of the following engagement objectives would be appropriate to fulfill this request?
- A. Assess the organization's ability to minimize potential external risks
- B. Assess the organization's risk impacts from the markets in which it operates
- C. Assess the organization's controls implemented that would help minimize risks
- D. Assess the organization's process of vetting vendors that provide necessary services to the organization
Answer: D
NEW QUESTION # 43
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