Certified Internal IIA-CIA-Part2 Dumps | Updated Oct 10, 2021 - TestBraindump
Master 2021 Latest The Questions Certified Internal and Pass IIA-CIA-Part2 Real Exam!
NEW QUESTION 130
An auditor plans to analyze customer satisfaction, includinG.(1) customer complaints recorded by the customer service department during the last three months; (2)
merchandise returned in the last three months; and (3) responses to a survey of customers who made purchases in the last three months. Which of the following statements regarding this audit approach is correct?
- A. The survey would not consider customers who did not make purchases in the last three months.
- B. Analysis of three months' activity would not evaluate customer satisfaction.
- C. Although useful, such an analysis does not address any risk factors.
- D. Steps 1 and 2 of the analysis are not necessary or cost-effective if the customer survey is comprehensive.
Answer: A
NEW QUESTION 131
Which of the following is the correct ratio to use in calculating the dollar value of the population if the auditor is using ratio estimation?
Number of Items
Audited Value
Carrying Amount
Sample
300
$500,000
$480,000
Population
3,000
$5,000,000
- A. 0.10
- B. 0.96
- C. 10.00
- D. 1.04
Answer: D
NEW QUESTION 132
The chief audit executive (CAE) of a large retail operation believes that senior management has accepted a level of risk that exceeds the organization's current risk tolerance with respect to a major expansion. The CAE plans to meet with senior management to discuss these concerns. According to IIA guidance, which of the following would be an appropriate course of action in preparation for this meeting?
* Understand management's basis for the decision.
* Advise the board of the concern and upcoming meeting.
* Ascertain which members of management have accepted the risk.
* Determine if management has the authority to accept the risk.
- A. 3 and 4 only
- B. 2 and 3 only
- C. 1 and 4 only
- D. 1 and 2 only
Answer: C
NEW QUESTION 133
An internal auditor noticed that employees with responsibilities for cash collection had recently issued an unusually large number of credit memos, indicating that the original charges had been made to the wrong customer accounts. From a control standpoint, the auditor would be concerned with the possibility that:
- A. Employees in this function are concealing a theft of cash collected from customers.
- B. The credit department has not been properly screening customers and, as a result, a large portion of the accounts receivable may not be collectible.
- C. The organization is selling a large number of defective items.
- D. Credit memos are not being submitted on a timely basis.
Answer: A
Explanation:
Section: Volume C
NEW QUESTION 134
The internal audit activity performs the following sequence of risk management activities: identification, analysis, and evaluation. According to IIA guidance, which of the following assurance approaches does this describe?
- A. Maturity model approach.
- B. Process elements approach.
- C. Key principles approach.
- D. Enterprise-wide risk management approach.
Answer: B
Explanation:
Section: Volume C
NEW QUESTION 135
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. Addresses of vendors from the vendor database
Addresses of employees from the employee database
D .Vendor names
Employee names - B. Vendor bank account numbers
Employee bank account numbers - C. Dates of payments to vendors
Dates of salary payments to employees
Answer: C
NEW QUESTION 136
In a review of an electronic data interchange application using a third-party service provider, the auditor should:
I.Ensure encryption keys meet International Organization for Standardization (ISO) standards.
II.
Determine whether an independent review of the service provider's operation has been conducted.
III.
Verify that only public-switched data networks are used by the service provider.
IV.
Verify that the service provider's contracts include necessary clauses, such as the right to audit.
- A. II and IV only.
- B. I and II only.
- C. II and III only.
- D. I and IV only.
Answer: A
NEW QUESTION 137
Information gathered in a forensic investigation of business fraud is usually gathered with which of the following standards in mind?
- A. Generally Accepted Accounting Principles.
- B. Legal evidence.
- C. The International Professional Practices Framework.
- D. Generally Accepted Auditing Standards.
Answer: B
Explanation:
Section: Volume C
NEW QUESTION 138
An internal audit activity is participating in the due diligence work for an acquisition that a company is considering. One engagement objective is to determine if the acquisition's accounts payable contain all outstanding liabilities. Which of the following audit procedures would not be relevant for this objective?
- A. Select a sample of accounts payable from the accounts payable list and verify the supporting receiving reports, purchase orders, and invoices.
- B. Examine supporting documentation of subsequent (after-period) cash disbursements and verify period of liability.
- C. Send confirmations, including zero-balance accounts, to vendors with whom the company normally does business.
- D. Trace receiving reports issued before the period end to the related vendor invoices and accounts payable list.
Answer: A
Explanation:
Section: Volume A
NEW QUESTION 139
Which of the following is not an outcome of control self-assessment?
- A. Nonaudit employees become experienced in assessing controls and associating control processes with managing risks.
- B. The entire objectives-risks-controls infrastructure of an organization is subject to greater monitoring and continuous improvement.
- C. Internal auditors become involved in and knowledgeable about the self-assessment process.
- D. Informal, soft controls are omitted, and greater focus is placed on hard controls.
Answer: D
NEW QUESTION 140
A consumer electronics company is considering acquiring a small flash memory manufacturer. An internal auditor has been assigned to determine if the manufacturer's accounts payable contain all outstanding liabilities. Which audit procedure is not relevant for this objective?
- A. Send confirmations, including zero-balance accounts, to vendors with whom the manufacturer normally does business.
- B. Verify a sample of accounts payable by using related invoices, receiving reports, and purchase orders.
- C. Verify the period of liability of subsequent cash disbursements using related supporting documentation.
- D. Trace receiving reports issued before the period end to the accounts payable list and vendor invoices.
Answer: B
Explanation:
Section: Volume C
NEW QUESTION 141
An organization has recently incurred significant cost overruns on one of its construction projects. Management suspects that these overruns were caused by the contractor improperlycharging for costs related to contract change orders. Which of the following procedures are appropriate for testing this suspicion?
- Determine if the contractor has received proper approval of change orders from management. - Determine if the contractor has billed for original contract work cancelled by the change orders. - Determine if the contractor has charged change orders with costs already billed to the original contract. - Determine if the contractor has been paid for change orders that have not yet been completed.
- A. 1 and 3 only.
- B. 2 and 3 only.
- C. 1 and 2 only.
- D. 3 and 4 only.
Answer: B
NEW QUESTION 142
An internal auditor has been assigned to facilitate a risk and control self-assessment for the finance group.
Which of the following is the most appropriate role that she should assume when facilitating the workshop?
- A. Screen and vet participants so that the most appropriate candidates are selected to participate in the exercise.
- B. Express an opinion on the participants' inputs and conclusions as the assessment progresses.
- C. Provide appropriate techniques and guidelines on how the exercise should be undertaken.
- D. Evaluate and report on all issues that may be uncovered during the exercise.
Answer: C
NEW QUESTION 143
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.
- A. 1, 2, and 4 only.
- B. 1, 2, and 3 only.
- C. 1, 3, and 4 only.
- D. 2, 3, and 4 only.
Answer: A
NEW QUESTION 144
According to the International Professional Practices Framework, which of the following is not an objective of the exit conference?
- A. Resolve disagreements.
- B. Plan future engagements.
- C. Receive client feedback and clarification.
- D. Review audit recommendations.
Answer: B
NEW QUESTION 145
An internal auditor is reviewing a new automated human resources system. The system contains a table of pay rates which are matched to the employee job classifications. The best control to ensure that the table is updated correctly for only valid pay changes would be to:
- A. Require a supervisor in the department, who does not have the ability to change the table, to compare the changes to a signed management authorization.
- B. Ensure that adequate edit and reasonableness checks are built into the automated system.
- C. Require that all pay changes be signed by the employee to verify that the change goes to a bona fide employee.
- D. Limit access to the data table to management and line supervisors who have the authority to determine pay rates.
Answer: A
NEW QUESTION 146
According to IIA guidance, which of the following are benefits to the internal audit activity when conducting an assurance mapping exercise?
- A. Resolution of identified testing errors, and minimization of duplicate assurance efforts.
- B. Resolution of identified testing errors, and consolidation of risk reporting efforts.
- C. Identification of gaps in risk coverage, and consolidation of risk reporting efforts.
- D. Identification of gaps in risk coverage, and minimization of duplicate assurance efforts.
Answer: D
NEW QUESTION 147
Which of the following would be the best audit procedure to use to determine if a division's unusually high sales and gross margin for November and December were the result of fraudulently recorded sales?
- A. Use regression analysis techniques to estimate the sales and cost of goods sold for November and December.
- B. Confirm accounts receivable balances with customers.
- C. Trace a sample of shipping documents to related sales invoices to verify proper billing.
- D. Compare sales and gross margin totals with those of the previous ten months and the first month of the following year.
Answer: B
NEW QUESTION 148
While performing a follow-up of a concern about equipment-inventory tracking, which course of action is not necessary for the auditor to take?
- A. Ensure that the inherent risk has been eliminated as a result of resolving the issue.
- B. Ensure that controls have been implemented to prevent the issue from occurring again.
- C. Ensure that the entity has begun to experience benefits as a result of resolving the issue.
- D. Ensure that the steps being taken resolve the condition disclosed by the initial finding.
Answer: A
NEW QUESTION 149
Controls are implemented to:
- A. Mitigate risk and reduce the potential for loss.
- B. Eliminate risk and reduce the potential for loss.
- C. Mitigate risk and eliminate the potential for loss.
- D. Eliminate risk and eliminate potential for loss.
Answer: A
Explanation:
Section: Volume D
NEW QUESTION 150
Which of the following best describes the primary concern of the audit manager upon review of engagement working papers of an auditor?
- A. To ensure that the work papers create background for subsequent reviews.
- B. To ensure adequate control over the custody of working papers is exercised by the auditor.
- C. To ensure that the audit programs are followed by the auditor.
- D. To ensure that as part of the documentation the auditor collected original documents that can corroborate the audit findings.
Answer: C
NEW QUESTION 151
Which of the following statements is true pertaining to interviewing a fraud suspect?
1. Information gathered can be subjective as well as objective to be useful.
2. The primary objective is to obtain a voluntary written confession.
3. The interviewer is likely to begin the interview with open-ended questions.
4. Video recordings always should be used to provide the highest quality evidence.
- A. 1 only
- B. 1 and 3
- C. 4 only
- D. 2 and 4
Answer: B
NEW QUESTION 152
Which of the following is a red flag associated with improper asset valuation?
- A. Unusual decrease in the number of days' purchases in inventory.
- B. Recurring positive cash flows from operations.
- C. Unusual increase in gross margin.
- D. Allowance for bad debts that is increasing in percentage terms.
Answer: C
Explanation:
Section: Volume B
NEW QUESTION 153
The internal audit activity of an organization obtained approval to add a senior auditor to its staff. The chief audit executive, audit manager, and audit supervisor each will interview the candidates. According to the Standards, which of the following best explains the involvement of management in the interview process?
- A. Provides audit management with the opportunity to communicate expectations regarding ethical behavior standards.
- B. Allows audit management to explain the criteria that will be used to evaluate the senior auditor's performance.
- C. Assists audit management in planning by more effectively allocating the senior auditor to appropriate audits.
- D. Enables audit management to outline its quality assurance and improvement program with the senior auditor.
Answer: C
NEW QUESTION 154
After issuance of the engagement final communication for an audit of an organization's accounts payable function, which of the following should be sent satisfaction surveys?
I. Manager of disbursements.
II. Controller.
III. Chief operating officer.
IV. Audit committee members.
- A. II, III, and IV only
- B. I and II only
- C. I only
- D. II and III only
Answer: B
Explanation:
Section: Volume B
Explanation/Reference:
NEW QUESTION 155
......
A fully updated 2021 IIA-CIA-Part2 Exam Dumps exam guide from training expert TestBraindump: https://www.testbraindump.com/IIA-CIA-Part2-exam-prep.html
Practice To IIA-CIA-Part2 - TestBraindump Remarkable Practice On your Practice of Internal Auditing Exam: https://drive.google.com/open?id=1AcaOURNQfCPqEVTQavZz4twcohu9UJtO
