Practice Free IIA-CIA-Part2 Exam Online Questions
Question #181
During an internal audit engagement, which of the following is true regarding the decision to use statistical sampling or nonstatistical sampling?
- A . The decision affects the test procedures performed.
- B . The auditor’s response to errors detected will be influenced.
- C . The competence of the evidence obtained is greater with statistical sampling.
- D . Nonstatistical sampling may be more cost effective.
Correct Answer: A
A
Explanation:
Step-by-Step Detailed Explanation
A
Explanation:
Step-by-Step Detailed Explanation
Question #182
During an entity-level controls assessment, internal auditors deploy an internal control questionnaire to test the controls.
Which of the following is a major drawback of this testing method?
- A . Information obtained by this method can be repudiated.
- B . Information obtained by this method is difficult to quantify.
- C . It is an inefficient method of gathering evidence.
- D . Limited information can be gathered with this method.
Correct Answer: A
A
Explanation:
An internal control questionnaire (ICQ) is a commonly used tool in the assessment of entity-level controls. It is a structured set of questions that auditors use to gather information about the controls in place within an organization. However, while this method can be efficient for gathering broad-based information, it has certain limitations, one of the most significant being that the information obtained can be repudiated.
Repudiation refers to the possibility that the information provided by respondents can be denied or questioned later. This is a key drawback because the responses in an ICQ are typically self-reported and may not be fully accurate or reliable. Respondents may either misunderstand the questions or provide answers that are overly optimistic, biased, or not fully truthful. This can compromise the reliability of the evidence gathered through this method. IIA
Reference: According to IIA’s International Professional Practices Framework (IPPF), particularly in the Implementation Guides that accompany the Standards, internal auditors are encouraged to use various techniques for gathering evidence to ensure the completeness, accuracy, and reliability of the information. The guide cautions that self-reported data, such as that obtained through questionnaires, should be corroborated with additional evidence.
IIA Standard 2310: Identifying Information states that internal auditors must identify sufficient, reliable, relevant, and useful information to achieve the engagement’s objectives. The limitations of the ICQ, particularly the risk of repudiation, directly relate to the reliability of the information obtained.
Additionally, the IIA’s Practice Guide on Evaluating Internal Controls suggests that while ICQs are useful in gaining an initial understanding of control environments, they should not be relied upon as the sole source of evidence. This emphasizes the need for corroborative evidence to address the risk of repudiation.
Given these considerations, the correct answer is A. Information obtained by this method can be repudiated because the self-reported nature of ICQs inherently carries the risk of repudiation, thus questioning the reliability of the control assessment finding
A
Explanation:
An internal control questionnaire (ICQ) is a commonly used tool in the assessment of entity-level controls. It is a structured set of questions that auditors use to gather information about the controls in place within an organization. However, while this method can be efficient for gathering broad-based information, it has certain limitations, one of the most significant being that the information obtained can be repudiated.
Repudiation refers to the possibility that the information provided by respondents can be denied or questioned later. This is a key drawback because the responses in an ICQ are typically self-reported and may not be fully accurate or reliable. Respondents may either misunderstand the questions or provide answers that are overly optimistic, biased, or not fully truthful. This can compromise the reliability of the evidence gathered through this method. IIA
Reference: According to IIA’s International Professional Practices Framework (IPPF), particularly in the Implementation Guides that accompany the Standards, internal auditors are encouraged to use various techniques for gathering evidence to ensure the completeness, accuracy, and reliability of the information. The guide cautions that self-reported data, such as that obtained through questionnaires, should be corroborated with additional evidence.
IIA Standard 2310: Identifying Information states that internal auditors must identify sufficient, reliable, relevant, and useful information to achieve the engagement’s objectives. The limitations of the ICQ, particularly the risk of repudiation, directly relate to the reliability of the information obtained.
Additionally, the IIA’s Practice Guide on Evaluating Internal Controls suggests that while ICQs are useful in gaining an initial understanding of control environments, they should not be relied upon as the sole source of evidence. This emphasizes the need for corroborative evidence to address the risk of repudiation.
Given these considerations, the correct answer is A. Information obtained by this method can be repudiated because the self-reported nature of ICQs inherently carries the risk of repudiation, thus questioning the reliability of the control assessment finding
Question #182
During an entity-level controls assessment, internal auditors deploy an internal control questionnaire to test the controls.
Which of the following is a major drawback of this testing method?
- A . Information obtained by this method can be repudiated.
- B . Information obtained by this method is difficult to quantify.
- C . It is an inefficient method of gathering evidence.
- D . Limited information can be gathered with this method.
Correct Answer: A
A
Explanation:
An internal control questionnaire (ICQ) is a commonly used tool in the assessment of entity-level controls. It is a structured set of questions that auditors use to gather information about the controls in place within an organization. However, while this method can be efficient for gathering broad-based information, it has certain limitations, one of the most significant being that the information obtained can be repudiated.
Repudiation refers to the possibility that the information provided by respondents can be denied or questioned later. This is a key drawback because the responses in an ICQ are typically self-reported and may not be fully accurate or reliable. Respondents may either misunderstand the questions or provide answers that are overly optimistic, biased, or not fully truthful. This can compromise the reliability of the evidence gathered through this method. IIA
Reference: According to IIA’s International Professional Practices Framework (IPPF), particularly in the Implementation Guides that accompany the Standards, internal auditors are encouraged to use various techniques for gathering evidence to ensure the completeness, accuracy, and reliability of the information. The guide cautions that self-reported data, such as that obtained through questionnaires, should be corroborated with additional evidence.
IIA Standard 2310: Identifying Information states that internal auditors must identify sufficient, reliable, relevant, and useful information to achieve the engagement’s objectives. The limitations of the ICQ, particularly the risk of repudiation, directly relate to the reliability of the information obtained.
Additionally, the IIA’s Practice Guide on Evaluating Internal Controls suggests that while ICQs are useful in gaining an initial understanding of control environments, they should not be relied upon as the sole source of evidence. This emphasizes the need for corroborative evidence to address the risk of repudiation.
Given these considerations, the correct answer is A. Information obtained by this method can be repudiated because the self-reported nature of ICQs inherently carries the risk of repudiation, thus questioning the reliability of the control assessment finding
A
Explanation:
An internal control questionnaire (ICQ) is a commonly used tool in the assessment of entity-level controls. It is a structured set of questions that auditors use to gather information about the controls in place within an organization. However, while this method can be efficient for gathering broad-based information, it has certain limitations, one of the most significant being that the information obtained can be repudiated.
Repudiation refers to the possibility that the information provided by respondents can be denied or questioned later. This is a key drawback because the responses in an ICQ are typically self-reported and may not be fully accurate or reliable. Respondents may either misunderstand the questions or provide answers that are overly optimistic, biased, or not fully truthful. This can compromise the reliability of the evidence gathered through this method. IIA
Reference: According to IIA’s International Professional Practices Framework (IPPF), particularly in the Implementation Guides that accompany the Standards, internal auditors are encouraged to use various techniques for gathering evidence to ensure the completeness, accuracy, and reliability of the information. The guide cautions that self-reported data, such as that obtained through questionnaires, should be corroborated with additional evidence.
IIA Standard 2310: Identifying Information states that internal auditors must identify sufficient, reliable, relevant, and useful information to achieve the engagement’s objectives. The limitations of the ICQ, particularly the risk of repudiation, directly relate to the reliability of the information obtained.
Additionally, the IIA’s Practice Guide on Evaluating Internal Controls suggests that while ICQs are useful in gaining an initial understanding of control environments, they should not be relied upon as the sole source of evidence. This emphasizes the need for corroborative evidence to address the risk of repudiation.
Given these considerations, the correct answer is A. Information obtained by this method can be repudiated because the self-reported nature of ICQs inherently carries the risk of repudiation, thus questioning the reliability of the control assessment finding
Question #184
During a review of the treasury function an internal auditor identified a risk that all bank accounts may net to include in the daily reconciliation process.
Which of the following responses would be most effective to mitigate this risk?
- A . The treasury supervisor establishes a threshold for amounts on bank statements to be reconciled against data in the system
- B . The treasury analyst performs a daily reconciliation of al bank statements obtained via email against data in the system
- C . The treasury analyst reviews a daily report automatically generated by the treasury system, which shows bank statements that have not been uploaded into the accounting system.
- D . The treasury supervisor seeks an annual confirmation from the bank regarding the bank statements processed within a year
Correct Answer: C
Question #185
A large investment organization hired a chief risk officer (CRO) to be responsible for the organization’s risk management processes.
Which of the following people should prioritize risks to be used for the audit plan?
- A . Operational management, because they are responsible for the day-to-day management of the operational risks.
- B . The CRO, because he is responsible for coordinating and project managing risk activities based on his specialized skills and knowledge.
- C . The chief audit executive, although he is not accountable for risk management in the organization.
- D . The CEO, because he has ultimate responsibility for ensuring that risks are managed within the agreed tolerance limits set by the board.
Correct Answer: C
Question #186
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 . Intern accounting management via an interim memorandum update
- B . Note the item in the workpapers for inclusion in the final audit report
- C . Call a meeting and discuss me issue with the audit committee
- D . Alert the CEO as soon as the issue is discovered
Correct Answer: D