Get New 2023 Valid Practice To your IIA-CIA-Part2 Exam (Updated 360 Questions) [Q55-Q79]

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Get New 2023 Valid Practice To your IIA-CIA-Part2 Exam (Updated 360 Questions)

Certified Internal IIA-CIA-Part2 Exam Practice Test Questions Dumps Bundle!

What format is the IIA CIA Part 2 Exam?

The passing score: 70%
Time Duration: 120 mins
Format : multiple-choice
Number of Questions: 100 questions
Languages: English

NO.55 A recent survey indicated that residents of a small town take the train to a nearby city eight times per month, on average. The same survey showed that the number of train trips that a resident takes per month (y) is determined by the number of days per month that the resident works in the nearby city (x), according to the equation: y = 2 + 2x. A person who never works in the nearby city is expected to take the train:

Zero times per month.

Two times per month.

Four times per month.

Eight times per month.

NO.56 A code of business conduct provides:

A fraud avoidance plan that does not explicitly describe punishments for violations.

A passive method of fraud deterrence.

A program to anonymously report irregularities to authorities.

An alternative to “tone at the top” programs.

NO.57 According to IIA guidance, which of the following should be considered when creating policies and procedures for the internal audit activity (IAA)?

Number of auditors, complexity of audit activities, and structure of the IA

Number of auditors, complexity of audit activities, and audit staff skills and competencies.

Number of auditors, structure of the IAA, and audit staff skills and competencies.

Complexity of audit activities, structure of the IAA, and audit staff skills and competencies.

NO.58 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?

Criteria.

Effect

Condition

Cause

NO.59 Which of the following are key characteristics of enterprise risk management?
1. It considers risk in the formulation of strategy.
2. It applies risk management in some units of an entity.
3. It takes a portfolio view of risks throughout the enterprise.
4. It restricts the organization’s ability to seize opportunities inherent in future events.

2 and 3 only

1 and 3 only

2 and 4 only

1 and 4 only

NO.60 Which of the following is the most common method management can use to manage risk within its risk appetite?

Implementation of controls.

Use of risk registers and dashboard.

Frequent communication of risk appetite for operating personnel.

Continuous evaluations and audits.

NO.61 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?

Intern accounting management via an interim memorandum update

Note the item in the workpapers for inclusion in the final audit report

Call a meeting and discuss me issue with the audit committee

Alert the CEO as soon as the issue is discovered

NO.62 According to IIA guidance, which of the following would not be a consideration for the internal audit activity (IAA) when determining the need to follow-up on recommendations?

Degree of effort and cost needed to correct the reported condition.

Complexity of the corrective action.

Impact that may result should the corrective action fail.

Amount of resources required to conduct the follow-up activities.

NO.63 During a fraud interview, it was discovered that unquestioned authority enabled a vice president to steal funds from the organization. Which of the following best describes this condition?

Scheme.

Opportunity.

Rationalization.

Pressure.

NO.64 Which of the following is a justifiable reason for omitting advance client notice when planning an audit engagement?

Advance notice may result in management making corrections to reduce the number of potential deficiencies.

Previous management action plans addressing prior internal audit recommendations remain incomplete.

The engagement includes audit assurance procedures such as sensitive or restricted asset verifications.

The audit engagement has already been communicated and approved through the annual audit plan.

NO.65 Which of the following are key characteristics of enterprise risk management?
It considers risk in the formulation of strategy.
It applies risk management in some units of an entity.
It takes a portfolio view of risks throughout the enterprise.
It restricts the organization’s ability to seize opportunities inherent in future events.

2 and 3 only.

1 and 3 only.

2 and 4 only.

1 and 4 only.

NO.66 After partially completing an internal control review of the accounts payable department, an auditor suspects that some type of fraud has occurred. To ascertain whether the fraud is present, the best sampling approach would be to use.

Simple random sampling to select a sample of vouchers processed by the department during the past year.

Probability-proportional-to-size sampling to select a sample of vouchers processed by the department during the past year.

Discovery sampling to select a sample of vouchers processed by the department during the past year.

Judgmental sampling to select a sample of vouchers processed by clerks who were identified by the department manager as acting suspiciously.

NO.67 Which of the following represents appropriate evidence of supervisory review of engagement workpapers?
I. A supervisor’s initials on each workpaper.
II. An engagement workpaper review checklist.
III. A memorandum specifying the nature, extent, and results of the supervisory review of workpapers.
IV. Performance appraisals that assess the quality of workpapers prepared by auditors.

II and IV only

I, II, and III only

I, III, and IV only

I, II, III, and IV.

NO.68 An internal auditor compared the number of human resources professionals per employee with industry standards. This comparison would assist the auditor in evaluating which of the following areas?

Sufficiency of controls over payroll rate increases.

Current level of performance of the human resources department.

Adequacy of controls over hiring new employees.

Degree of compliance with human resources policies.

NO.69 Questions used to interrogate individuals suspected of fraud should:

Adhere to a predetermined order.

Cover more than one subject or topic.

Move from general to specific.

Direct the individual to a desired answer.

NO.70 When assessing the risk associated with an activity, an internal auditor should:

Determine how the risk should best be managed.

Provide assurance on the management of the risk.

Modify the risk management process based on risk exposures.

Design controls to mitigate the identified risks.

NO.71 Which of the following is not a reason for an internal auditor to prepare an audit plan before the detailed audit work begins?

The objectives of the audit should be set.

The organization’s management should be informed about the work to be performed.

Attention should be devoted toward the key audit areas.

The timing of the audit should be set.

NO.72 An audit of customer accounts receivable found that outstanding receivables as a percentage of revenue had increased significantly during the past two years. The increase was attributed to the extension of credit, at the urging of the marketing department, to a number of companies that were not credit worthy.
Which of the following would be least useful in monitoring the disposition of this finding?

Responses from the manager of accounts receivable regarding collection of outstanding receivables.

Periodic updates from the controller regarding the status of corrective actions.

Information from the credit and marketing personnel assigned the responsibility for reevaluating credit policies.

Updates from the information technology division regarding implementation of a new accounts receivable system.

NO.73 Which of the following describes an internal auditor’s responsibilities to include audit procedures to detect fraud in audits of a multinational organization?

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.

Internal auditors do not have any specific responsibilities with respect to including fraud-related audit procedures.

Proper audit procedures, when carried out with due professional care, will guarantee that fraud, if present, will be detected.

If significant control weaknesses are detected, additional tests should be directed toward other indicators of fraud.

NO.74 While reviewing the draft report of an audit engagement, the chief audit executive (CAE) is not in agreement with management’s acceptance of the potential risk exposure resulting from an observed key control weakness. Which of the following actions by the CAE would be appropriate for addressing this concern?
* Meet with the auditor-in-charge.
* Discuss with senior management.
* Monitor the result of the accepted risk.
* Report the matter to the board.

1, 2, and 3 only

1, 2, and 4 only

1, 3, and 4 only

2, 3, and 4 only

NO.75 What is the most likely source of information for a detailed schedule of a company’s insurance policies in force?

Original journal entries found in the cash disbursements journal, along with supporting checks processed by the bank.

Policies and procedures governing insurance coverage.

The current fiscal year’s budget for insurance, together with the beginning balance of the prepaid insurance account.

The files containing insurance policies with various carriers.

NO.76 According to the International Professional Practices Framework, which of the following situations is an indicator of a healthy relationship between the audit committee and the internal audit function?

The chief audit executive (CAE) has direct access to the audit committee and the board but typically does not interact directly with them unless a material weakness in the control environment is identified.

The CAE sends the audit committee all communications between the internal audit department and the audit client in order to keep the audit committee up to date on the engagement.

The CAE does not distribute audit reports to the audit committee. However, the audit committee is made aware of the scope and findings of audits performed.

Whenever a potential audit finding or testing exception is first identified, the audit committee is immediately notified, as well as for any subsequent changes in the status of the engagement.

NO.77 What is the primary factor that determines the depth and breadth of audit follow-up?

The engagement client’s written response to the audit findings.

The auditor’s assessment of risk associated with the audit findings.

The auditor’s assessment of personnel responsible for correcting audit findings.

The availability of audit personnel and financial resources.

NO.78 Which of the following is the most appropriate step for the chief audit executive to take in order to avoid defamation of character of the principal suspect in a fraud investigation?

Restrict the use of potentially damaging words to privileged reports or discussions.

Label all workpapers, reports, and correspondence of the internal audit activity as private.

Restrict discussions of the fraud to members of management who express an interest in the investigation.

Destroy all investigation workpapers and reports if the fraud cannot be proven.

NO.79 A governmental auditor was assigned to determine reasons why the students in one region scored significantly higher on education evaluation tests than did the students in another region. Previous research showed that there is a direct correlation between public financial support and student results. Which of the following is most likely to explain the difference in the regional results?

The more successful region spends 30 percent more money on education than does the other region.

A higher percentage of the general tax fund is spent on education in the more successful region than in the other region.

The more successful region spends more money per student on education than does the other region.

The more successful region has increased educational spending by an average of 10 percent each year for the last three years, whereas the other region’s increase averaged only three percent.