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NEW QUESTION 68
Risk assessments can vary in format, but generally include:
1. A description of identified risks.
2. Tests of audit controls.
3. A system of rating risks.
4. Sample size identification.
- A. 1, 3, and 4 only
- B. 2, 3, and 4 only
- C. 1 and 2 only
- D. 1 and 3 only
Answer: D
Explanation:
Section: Volume C
NEW QUESTION 69
Which of the following is least likely to help ensure that risk is considered in a work program?
- A. Risks are discussed with audit client.
- B. Client efforts to affect risk management are considered.
- C. All available information from the risk-based plan is used.
- D. Prior risk assessments are considered.
Answer: D
NEW QUESTION 70
An internal audit manager is supervising an engagement. A senior auditor deviates from the approved engagement plan but meets all deadlines in the approved time schedule. Which activity is not required for the audit manager to provide proper engagement supervision?
- A. Actively participate in audit procedures.
- B. Ensure compliance with the time schedule.
- C. Ensure that all engagement objectives are met.
- D. Approve the deviation from the engagement plan.
Answer: A
Explanation:
Section: Volume C
Explanation/Reference:
NEW QUESTION 71
Because of an abundance of high priority requests from management, an internal audit activity no longer has the resources to meet all of its commitments contained in the annual audit plan. Which of the following would be the best course of action for the chief audit executive to follow?
- A. Advise the board immediately and seek their support for additional resources to meet the needs of the plan.
- B. Present a reassessment of the plan to the board and senior management for consideration.
- C. Continue with the plan and seek opportunities to adjust priorities and reallocate resources.
- D. Reassess the plan and either cancel or divert resources away from the lowest priority activities.
Answer: B
NEW QUESTION 72
A company's policy requires that all customers be treated in a fair and consistent manner. Which of the following audit procedures would provide the most persuasive evidence that the policy was followed?
- A. Compare the aging of outstanding receivables due from each customer.
- B. Compare the ratio of outstanding receivables to the authorized credit limit for each customer.
- C. Compare the sales discounts offered to each customer.
- D. Compare credit reports with annual sales for a sample of customers.
Answer: C
NEW QUESTION 73
Which of the following tasks would be considered unusual for planning a control self-assessment workshop?
- A. Identifying key stakeholders and ensuring they are represented in the group.
- B. Conducting interviews to identify relevant issues for the discussion.
- C. Ensuring that managers are willing to accept constructive criticism.
- D. Securing an external subject matter expert to arbitrate disputes.
Answer: D
Explanation:
Section: Volume C
NEW QUESTION 74
Which of the following events would most likely cause the chief audit executive to consider changing the current year's audit plan?
1. The government announced that new regulatory requirements will be introduced in the coming years which may significantly impact the organization's primary product.
2. A major competitor unexpectedly introduced a new model at a lower price point to compete with the organization's market leading product.
3. The organization announced a new joint venture with a long time corporate partner to introduce a new product with development costs and sales beginning next fiscal year.
4. An equal joint venture partner filed a lawsuit against the organization and requested that the court issue an immediate suspension of future product shipments.
- A. 3 and 4 only
- B. 1 and 3 only
- C. 2 and 4 only
- D. 1 and 2 only
Answer: C
NEW QUESTION 75
An organization's internal auditors are reviewing production costs at a gas-powered electrical generating plant. They identify a serious problem with the accuracy of carbon dioxide emissions reported to the environmental regulatory agency, due to computer errors. The auditors should immediately report the concern to:
- A. The risk management function.
- B. A plant health and safety officer.
- C. Plant management.
- D. The regulatory agency.
Answer: C
NEW QUESTION 76
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?
- A. Current level of performance of the human resources department.
- B. Sufficiency of controls over payroll rate increases.
- C. Degree of compliance with human resources policies.
- D. Adequacy of controls over hiring new employees.
Answer: A
NEW QUESTION 77
While investigating a compromised Web server, an auditor found that the Web server logs had been deleted. The auditor should recommend that the Web server logs be:
- A. Generated and maintained on a separate secure server.
- B. Encrypted to ensure that the logs cannot be deleted.
- C. Accessible by administrative users only
- D. Restored automatically to the Web server from backup files.
Answer: A
NEW QUESTION 78
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.
- A. I, II, and III only.
- B. I, III, and IV only.
- C. I, II, III, and IV.
- D. II and IV only.
Answer: A
NEW QUESTION 79
When establishing a quality assurance and improvement program, the chief audit executive should ensure the program is designed to accomplish which of the following objectives?
1. Add value.
2. Improve operations.
3. Provide assurance that the internal audit activity conforms with the Standards.
4. Provide assurance that the internal audit activity conforms with the IIA Code of Ethics.
- A. 1 and 3 only
- B. 1 only
- C. 1, 2, 3, and 4
- D. 1 and 2 only
Answer: C
Explanation:
Section: Volume E
NEW QUESTION 80
Which of the following is an appropriate role for the internal audit activity with regard to the organization's risk management program?
- A. Attain an adequate understanding of the organization's key risk mitigation strategies.
- B. Identify and manage risks in line with the organization's risk appetite.
- C. Identify and ensure that appropriate controls exist to mitigate risks.
- D. Ensure that a proper and effective risk management process exists.
Answer: A
NEW QUESTION 81
Which of the following is the least relevant when preparing the internal audit activity's annual engagement plan?
- A. The organization's current risk priority and exposure.
- B. Coordination with the audit plans of the external auditor.
- C. A rotation of internal audit engagements selected on a time basis.
- D. Senior management's requests for internal audit engagements.
Answer: C
NEW QUESTION 82
Which characteristic of risk assessment makes it a useful tool for audit planning?
- A. It provides a process for identifying and analyzing potentially adverse effects.
- B. It ranks the severity of potentially adverse effects on the organization.
- C. It provides a list of auditable activities in the organization.
- D. It evaluates the probability that an event or action may adversely affect the organization.
Answer: A
NEW QUESTION 83
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