Practice Free IIA-CIA-Part2 Exam Online Questions
Acceding to MA guidance, when of the Mowing strategies would like provide the most assurance to the chief audit executive (CAE) that the internal audit activity’s recommendations are being acted upon?
- A . The CAF obtains a formal response from senior management regarding the corrective actions they plan to take w address the recommendations.
- B . The CAE develops a tracking system to monitor the stains of engagement recommendations reported to management for action
- C . The CAE communicates with impacted department managers to determine whether corrective actions have addressed engagement recommendations
- D . The CAE works with the engagement supervisor to monitor the recommendations issued to management for corrective action
An internal audit manager is planning a contract compliance audit.
Which of the following should be done prior to developing the audit work program?
- A . Select a sample of invoices for substantive testing
- B . Review the contract for evidence of authorization
- C . Document underlying reasons for noncompliance
- D . Assess the inherent risk of paying duplicate invoices
Internal benchmarking
- A . 1.2 and 3
- B . 1.2. and 4.
- C . 1.3. and 4.
- D . 2. 3. and 4.
An internal auditor is asked to determine why the production line for a large manufacturing organization has been experiencing shutdowns due to unavailable pacts The auditor learns that production data used for generating automatic purchases via electronic interchange is collected on personal computers connected by a local area network (LAN) Purchases are made from authorized vendors based on both the production plans for the next month and an authorized materials requirements plan (MRP) that identifies the parts needed per unit of production The auditor suspects the shutdowns are occurring because purchasing requirements have not been updated for changes in production techniques.
Which of the following audit procedures should be used to test the auditor’s theory?
- A . Compare purchase orders generated from test data input into the LAN with purchase orders generated from production data for the most recent period
- B . Develop a report of excess inventory and compare the inventory with current production volume
- C . Compare the pans needed based on current production estimates and the MRP for the revised production techniques with the purchase orders generated from the system for the same period
- D . Select a sample of production estimates and MRPs for several periods and trace them into the system to determine that input is accurate
Which of the following would offer the strongest evidence to support the internal auditor’s conclusion that a product is in stock, as stated in the accounting records?
- A . The auditor performs an observation.
- B . The vendor provides third-party confirmation.
- C . The auditor documents interviews with multiple warehouse personnel.
- D . Warehouse management submits photographs of the product on the inventory shelf.
A
Explanation:
Direct observation by the auditor provides the strongest and most reliable evidence of inventory existence, per IIA Standard 2310: Identifying Information. Observational evidence is primary and directly verifiable, whereas third-party confirmations (Option B) or photographs (Option D) may be manipulated. Interviews with personnel (Option C) provide insight but lack objectivity and reliability compared to physical observation. This aligns with the CIA syllabus emphasis on collecting sufficient and appropriate audit evidence (Part 2: Section II).
Acceding to IIA guidance, which of the following statements is true regarding the risk assessment process performed by the internal audit activity?
- A . The assessment of high-level risks is typically a linear process.
- B . Management should create the preliminary risk matrix
- C . The analysis should begin with ne identification of objectives
- D . Likelihood should receive greater consideration than impact
According to IIA guidance, which of the following provides additional insight into errors, problems, missed opportunities, or noncompliance to improve the effectiveness and efficiency of an organization’s control process?
- A . Reperformance.
- B . Vouching.
- C . Independent confirmation.
- D . Root cause analysis.
D
Explanation:
Root cause analysis identifies underlying reasons for control deficiencies or inefficiencies, enabling organizations to address systemic issues and enhance controls. IIA Practice Guide: Root Cause Analysis (2018) highlights its role in promoting continuous improvement. Reperformance (Option A) and vouching (Option B) are audit techniques to verify accuracy but do not diagnose systemic issues. Independent confirmation (Option C) corroborates evidence but does not uncover root causes. Root cause analysis aligns with the CIA Part 2 objective of enhancing organizational efficiency.
To compete in the global market, an organization is restructuring and consolidating many of its divisions. Prior to the consolidation, senior management requested assistance from tie internal audit activity.
Which of the following consulting services would be most appropriate in this situation?
- A . Assess controls for potential compliance issues that may affect me consolidation
- B . Brief vendors on the potential risks that will occur without continued business
- C . Advise division managers on how to streamline operations for better efficiency
- D . Determine whether the organization’s controls are effective in meeting business objectives
An internal auditor conducted interviews with several employees, documented the interviews analyzed the summaries, and drew a number of conclusions.
What sort of audit evidence has the internal auditor primarily obtained?
- A . Documentary evidence
- B . Testimonial evidence
- C . Analytical evidence
- D . Physical evidence
According to IIA guidance, which of the following is the most appropriate action to be taken by the chief executive (CAE) if management refuses to accept audit recommendations and implement corrective actions, Even after escalation to senior management?
- A . The CAE should continue to meet with management to obtain their agreement for corrective action
- B . The CAE should note in the final report that management has decided to accept the risk.
- C . The CAE should ask that additional testing be undertaken to strengthen his case as to the need for corrective action.
- D . The CAE should advise senior management of his intention to escalate the matter to the board.