[Sep 12, 2026] Get New IIA-CIA-Part2 Practice Test Questions Answers
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How much does it cost to take the IIA CIA Part 2 Exam?
The IIA CIA Part 2 Exam fee of member is the USD 230, the nonmember fee is the USD 345 and Student/Professor fee is USD 180.
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.
NEW QUESTION # 297
During an interview with a manager in a company's claims department, an auditor noted that the manager became nervous and changed the subject whenever the auditor raised questions about certain types of claims.
The manager's answers were consistent with company policies and procedures. When documenting the interview, the auditor should:
- A. Conclude that the nonverbal communication is persuasive and that sufficient evidence exists to begin a fraud investigation.
- B. Document the manager's answers but not the nonverbal communication because it is subjective and is not corroborated.
- C. Disregard the interview entirely because the verbal and nonverbal communications were contradictory.
- D. Document the manager's answers, noting the nature of the nonverbal communication.
Answer: D
NEW QUESTION # 298
The head of customer service asked the chief audit executive (CAE) whether eternal auditors could assist her staff with conducting a risk self-assessment in the customer service department. The CAE promised to meet with customer service managers analyze relevant business processes, and come up with a proposal. Who is most likely to be the final approver of the engagement objectives and scope?
- A. The board of directors
- B. Senior management of the organization
- C. The chief audit executive
- D. The head of customer service
Answer: C
Explanation:
The chief audit executive (CAE) is responsible for the approval of the engagement objectives and scope in internal auditing. While senior management, the head of customer service, and the board of directors may provide input and have interests in the audit engagement, it is ultimately the CAE who has the final authority to approve the objectives and scope. This ensures that the internal audit activity remains independent and that the engagement aligns with the overall audit plan and organizational priorities.
:
The Institute of Internal Auditors (IIA) Standard 2010 - Planning
IIA Standard 2200 - Engagement Planning
NEW QUESTION # 299
Which of the following engagement techniques would be best to meet the objective of denting a personal conflict -of -interest situation affecting an organization's procurement function?
- A. Analytical review
- B. Inspection of documents
- C. Observation
- D. Inquiry
Answer: D
NEW QUESTION # 300
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. Develop the scope of the audit to include controls that are necessary to manage risk associated with a critical business objective.
- C. 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.
- D. Develop the scope of the audit based on a bottom-up perspective to ensure that all business objectives are considered.
Answer: D
Explanation:
When setting the scope for identifying and assessing key risks and controls in a process, developing the scope of the audit based on a bottom-up perspective is the least appropriate approach. A bottom-up perspective typically focuses on individual controls and processes without necessarily aligning with the organization's critical business objectives and risk appetite. Effective risk assessment should begin with a top-down approach, identifying key business objectives and the associated risks, and then determining the necessary controls to manage these risks. References: IIA Practice Guide - Auditing Key Risk Management, IIA Standard 2200 - Engagement Planning
NEW QUESTION # 301
Which of the following would be an appropriate role of the internal audit function?
- A. Be responsible for the management of a whistle blowing hotline.
- B. Establish the ethics policies for the organization.
- C. Evaluate the effectiveness of the organization's ethics-related activities.
- D. Determine the consequences for ethics violations.
Answer: C
NEW QUESTION # 302
Persuasive evidence indicates that a member of senior management has been involved in insider trading that would be considered fraudulent. However, the evidence was encountered during an operational audit and is not considered relevant to the audit. Which of the following is the most appropriate action for the chief audit executive to take?
- A. Discontinue audit work associated with the insider trading since it is not relevant to the existing audit.
- B. Conduct sufficient audit work to conclude whether fraudulent activity has taken place, then report the findings to the chairperson of the audit committee and to government officials if appropriate action is not taken.
- C. Report the evidence to the chairperson of the audit committee and recommend an investigation.
- D. Report the evidence to external legal counsel for investigation. Report the legal counsel findings to management.
Answer: C
Explanation:
Section: Volume C
NEW QUESTION # 303
An examination of the accounts payable function evidenced multiple findings with respect to segregation of duties. After management's response and action plan are received and documented in the final report, which of the following is most appropriate?
- A. Include the items in the scope of the next scheduled audit of the accounts payable function.
- B. Follow up after the applicable changes have been incorporated to validate management's response.
- C. Have an internal audit staff member placed into the accounting department until corrections are made.
- D. Because management agreed with the findings, no further action is deemed necessary.
Answer: B
Explanation:
After management responds to audit findings and provides an action plan, it is crucial for the internal audit activity to follow up to validate that the promised changes have been implemented and are effective. This follow-up ensures that the issues identified, such as those related to segregation of duties in accounts payable, have been appropriately addressed.
Detailed Explanation:
IIA Standard 2500 - Monitoring Progress:
This standard requires the internal audit activity to monitor the implementation of management's corrective actions. Following up on audit findings is essential to ensure that the actions taken effectively mitigate the identified risks.
Validation of Corrective Actions:
By conducting a follow-up review, the internal audit activity can verify that the changes have been made as planned and assess whether these changes are sufficient to resolve the issues. This process helps maintain the integrity and effectiveness of the internal audit function.
IIA Practice Advisory 2500-1:
The advisory emphasizes the importance of follow-up activities to confirm that management's responses to audit recommendations have been implemented as intended.
Why Not Other Options?
Option B (Include in the next scheduled audit): While this is a backup plan, it may delay the validation of corrective actions, allowing potential risks to persist.
Option C (No further action): This approach is inappropriate because it assumes the problem is resolved without verification, which could lead to unmitigated risks.
Option D (Placing an auditor in the department): This could compromise the independence of the internal audit function and is not a standard practice.
Conclusion: Option A is correct because it ensures that the internal audit activity fulfills its responsibility to validate that management's corrective actions have been implemented and are effective, aligning with IIA standards on monitoring progress.
NEW QUESTION # 304
Which of the following would be included in an internal audit department's quality assurance and improvement program?
1.Ongoing internal assessments of the performance of the internal audit department.
2.Periodic internal reviews through self-assessments.
3.Assessments conducted by a qualified external reviewer at least once every five years.
- A. 1 only
- B. 2 and 3 only
- C. 1 and 2 only
- D. 1, 2, and 3
Answer: D
NEW QUESTION # 305
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. Vendor names
Employee names - C. Vendor bank account numbers
Employee bank account numbers - D. Addresses of vendors from the vendor database
Addresses of employees from the employee database
Answer: A
Explanation:
Section: Volume D
NEW QUESTION # 306
According to IIA guidance, which of the following accurately describes the responsibilities of the chief audit executive with respect to the final audit report?
1. Coordinate post-engagement conferences to discuss the final audit report with management.
2. Include management's responses in the final audit report.
3. Review and approve the final audit report.
4. Determine who will receive the final audit report.
- A. 1 and 4
- B. 2 and 3
- C. 1 and 2
- D. 3 and 4
Answer: D
Explanation:
Section: Volume E
NEW QUESTION # 307
Which of the following would present the most critical external risk to an organization?
- A. After minimal testing, the organization implements a new system to replace a legacy system
- B. The organization launches a product into new global markets
- C. Regulators announce broad legislative reforms applicable to the industry within which the organization operates
- D. The organization experiences a merger, and the management team is reorganized and redistributed globally
Answer: C
Explanation:
Broad legislative reforms present the most critical external risk to an organization because they can fundamentally change the regulatory environment in which the organization operates. Such changes can impact compliance requirements, operational processes, and strategic planning. The organization must quickly adapt to remain compliant and avoid penalties or legal issues. This type of risk is external and largely uncontrollable, making it particularly critical compared to internal changes or new market entries.
Institute of Internal Auditors (IIA), International Standards for the Professional Practice of Internal Auditing (Standards), Standard 2120 - Risk Management.
NEW QUESTION # 308
Senior IT management requests the internal audit activity to perform an audit of a complex IT are a. The chief audit executive (CAE) knows that the internal audit activity lacks the expertise to perform the engagement. Which of the following is the most appropriate action for the CAE to take?
- A. Outsource the audit engagement to a reputable IT audit consulting firm.
- B. Decline the audit engagement, because the Standards prohibit internal auditors from performing engagements where they lack the necessary competencies.
- C. Temporarily hire an experienced and knowledgeable IT analyst from the organization's IT department to lead the audit.
- D. Accept the audit engagement and use the engagement as an opportunity to develop the audit team's IT expertise while performing the audit work.
Answer: A
Explanation:
Step-by-Step Detailed Explanation:
A . Decline the audit engagement, because the Standards prohibit internal auditors from performing engagements where they lack the necessary competencies:
The Standards allow for outsourcing or co-sourcing to meet competency gaps. Declining outright is not necessary.
B . Accept the audit engagement and use the engagement as an opportunity to develop the audit team's IT expertise while performing the audit work:
This approach risks compromising audit quality as the team lacks expertise.
C . Temporarily hire an experienced and knowledgeable IT analyst from the organization's IT department to lead the audit:
This could create independence issues, as the IT analyst is part of the auditee's function.
D . Outsource the audit engagement to a reputable IT audit consulting firm:
Correct. Outsourcing ensures that the engagement is performed by qualified professionals, maintaining quality and adherence to the Standards.
CIA Exam Syllabus Reference:
Domain IV: Managing the Internal Audit Function - Resourcing and Competency Management.
NEW QUESTION # 309
Which of the following statements is true?
- A. An assurance engagement observation is considered remediated when management's corrective action plan is approved by 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. 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.
Answer: C
NEW QUESTION # 310
An audit observation noted that annual inventory counts of biofuel was not being performed appropriately Fuel yards were not visited and physical amounts of biofuel were not reconciled with accounting data Management of the division understood the issue and promised to resolve the problem When should the internal auditor schedule a follow-up review?
- A. When convenient for both parties
- B. Before financial year end
- C. As soon as possible, no later than two months after the audit
- D. When management has indicated that the issue has been resolved
Answer: C
Explanation:
Strategic sourcing would best assist the CAE in balancing the internal audit activity's needs for technical audit skills, budget efficiency, and staff development opportunities. Strategic sourcing involves using a mix of internal resources, co-sourcing, and outsourcing to optimize the audit function. This approach allows the CAE to leverage external expertise for specialized skills, manage costs effectively, and provide growth opportunities for internal staff.
Reference:
IIA Standards: 2030 - Resource Management
IIA Practice Guide: Developing the Internal Audit Strategic Plan
NEW QUESTION # 311
Company A has a formal comprehensive corporate code of ethics while company B does not.
Which of the following statements regarding the existence of the code of ethics in company A can be logically inferred?
1. Company A exhibits a higher standard of ethical behavior than does company B.
2. Company A has established objective criteria by which an employee's actions can be evaluated.
3. The absence of a formal corporate code of ethics in company B would prevent a successful audit of ethical behavior in that company.
- A. II and III only
- B. I and II only
- C. III only
- D. II only
Answer: D
NEW QUESTION # 312
During an assurance engagement, an internal auditor discovered that a sales manager approved numerous sales contracts for values exceeding his authorization limit. The auditor reported the finding to the audit supervisor, noting that the sales manager had additional new contracts under negotiation. According to IIA guidance, which of the following would be the most appropriate next step?
- A. The audit supervisor should communicate the finding to the supervisor of the sales manager through an interim report.
- B. The audit supervisor should include the new contracts in the finding for the final audit report.
- C. The auditor should not reference the new contracts, because they are not yet signed and therefore cannot be included in the final report.
- D. The audit supervisor should remind the sales manager of his authority limit for the contracts under negotiation.
Answer: A
NEW QUESTION # 313
During follow-up. the internal auditor discovered that operational management did not implement effective actions to address a significant control breach If the issue is left unresolved it may result in regulatory sanctions and damage the organization's reputation What is the most appropriate next step for the chief audit executive to lake?
- A. Report the matter to the board
- B. Implement the recommended control to address the exposure
- C. Discuss the matter with senior management
- D. Ask the regulatory agency to persuade management to address the issue
Answer: C
NEW QUESTION # 314
An internal auditor is testing the success of the IT support department in meeting the service levels guaranteed to small, medium and large customers. The customer's size classification is based on its annual expenditures with the organization and the nature and extent of services it receives. Which of the following sampling techniques would be the most suitable to select customers for this test?
- A. Stop-and-go sampling
- B. Cluster sampling
- C. Interval sampling
- D. Stratified sampling
Answer: D
Explanation:
Stratified sampling is the most suitable technique for selecting customers for testing the IT support department's success in meeting service levels, as it involves dividing the population into distinct subgroups (strata) based on certain characteristics (in this case, customer size classification based on annual expenditures and service nature). This method ensures that each subgroup is adequately represented in the sample, providing more reliable and relevant results. References:
* The IIA's Global Technology Audit Guide (GTAG) on Data Analysis Technologies.
* The IIA's Practice Guide on Audit Sampling.
NEW QUESTION # 315
According to IIA guidance, which of the following typically serves as the basis for an engagement work program?
- A. Past audit findings.
- B. Stakeholders' expectations.
- C. Scope and audit objectives.
- D. Techniques and resources.
Answer: C
Explanation:
The engagement work program is primarily based on the scope and audit objectives of the engagement. The work program outlines the specific procedures to be followed during the audit to achieve the defined objectives within the scope of the engagement. It serves as a detailed plan that guides the audit team in their work, ensuring that all necessary areas are covered.
IIA References:
* IIA Standard 2240: Engagement Work Program states that internal auditors must develop and document work programs that achieve the engagement objectives. These work programs are directly tied to the scope and objectives of the audit, which determine the nature and extent of audit procedures.
* The Practice Guide on Engagement Planning explains that the work program should be designed to address the key risks and objectives identified during the planning phase, ensuring that the audit is comprehensive and focused on the most critical areas.
NEW QUESTION # 316
According to HA guidance, which of the following is the Key planning step internal auditors should perform to establish appropriate engagement objectives prior to starting an audit engagement?
- A. Review the organizational structure, management roles and responsibilities and operating procedures
- B. Evaluate management's risk assessment and the internal audit activity's risk assessment
- C. Assess process How and control documents used to meet regulatory requirements
- D. Review meeting notes from discussions involving management of the area to be reviewed.
Answer: D
NEW QUESTION # 317
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, II, and III
- B. I and III only
- C. III only
- D. I only
Answer: D
Explanation:
Section: Volume C
NEW QUESTION # 318
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