IIA IIA Certifications IIA-CIA-PART2 Questions & Answers

• Question 231:

  Which of the following documents should the chief audit executive review and approve?

  1.

  Workpaper retention policy.

  2.

  Audit committee meeting minutes.

  3.

  Internal audit handbook.

  4.

  Quarterly financial statements.

  A. 1 and 2 only

  B. 1 and 3 only

  C. 2 and 4 only

  D. 1, 3, and 4 only

  Correct Answer: B

• Question 232:

  Reviewing internal audit report drafts with clients is:

  1.

  Required according to the Standards.

  2.

  A form of courtesy.

  3.

  Ethically mandated.

  4.

  A form of validation.

  A. 1 and 2 only

  B. 2 and 3 only

  C. 2 and 4 only

  D. 3 and 4 only

  Correct Answer: C

• Question 233:

  In addition to the internal auditor, which of the following parties should be present at an exit or closing conference?

  1.

  Audit committee members.

  2.

  The external auditor.

  3.

  The management responsible for the areas covered by the engagement.

  4.

  The chief executive officer.

  A. 2 only

  B. 3 only

  C. 3 and 4 only

  D. 1, 3, and 4 only

  Correct Answer: B

• Question 234:

  According to the Standards, which of the following is an attribute when applied to the observations and recommendations contained in the audit report?

  A. Client accomplishments.

  B. Effect.

  C. Supportive information.

  D. Scope statements.

  Correct Answer: B

• Question 235:

  An internal auditor was assigned to conduct an inventory control and stock room area engagement. During the audit, the auditor observed that there were some items that have a shelf life expiration date requirement based on a certificate of conformance received with the product. The certificates of conformance are kept on file in the inventory area office and the expiration date is verified at the time the item is taken from stock. The auditor reviewed the items in the stock room and also on the production floor for the expiration dates to see if there was any expired product. All items with a shelf life requirement were found to be within the expiration date requirement. Which of the following recommendations would be appropriate?

  A. Take no action, because all the items were within the expiration date requirement, and no corrective action is needed.

  B. Permit production staff the access to files where the certificates of conformity are kept, so they can choose the items with the closest expiration date.

  C. Determine the cost of inventory for the items that have a shelf life and apply a new policy regarding inventory levels to be maintained (i.e., minimums, maximums, reorder points etc.).

  D. Add to the product label a "use by date" line, enter the expiration at the time of receipt, and perform periodic inventory checks.

  Correct Answer: D

• Question 236:

  During an engagement the internal auditors reported that the organization was paying suppliers without receiving the merchandise. Management responded that it would immediately establish the use of receiving reports. As part of the follow- up activity, which of the following procedures would be the most appropriate in determining that management action was implemented?

  A. Ask management if the new policy related to the receiving reports is in place.

  B. Select a sample of receiving reports and determine if payments were made.

  C. Interview warehouse employees to ascertain adherence to new policy.

  D. Select a sample of payments and determine if a receiving report exists.

  Correct Answer: D

• Question 237:

  If the chief audit executive believes that senior management has accepted a level of residual risk that is unacceptable to the organization, they should:

  A. Accept the decision of senior management as they are ultimately responsible for risk management.

  B. Report the concern directly to the board.

  C. Discuss the concern with management and if not resolved, escalate it to the board.

  D. Disclose the issue in the audit report when auditing the area where the risk was identified.

  Correct Answer: C

• Question 238:

  The following audit observation was included in the final audit report:

  "Our review concluded that bank reconciliation statements for March and April did not show evidence of

  supervisory review. We recommend strict compliance with the controller's manual, which requires the

  department head to place their initials on the reconciliation statements to document their review."

  Which of the following attributes are missing from the above audit observation?

  1.

  Criteria.

  2.

  Condition.

  3.

  Cause.

  4.

  Effect.

  A. 1 and 4 only

  B. 2 and 3 only

  C. 1, 3, and 4 only

  D. 3 and 4 only

  Correct Answer: D

• Question 239:

  Which two of the following considerations must an internal auditor take into account while planning an audit of an accounting system/application that has been in use for the last five years?

  1.

  The level and manner of linkages between the business' mission, objectives, and structure and the accounting system/application.

  2.

  Presence or absence of computerized and manual controls that address risks.

  3.

  Identification of risks at the application level, e.g. availability and security of the system.

  4.

  Testing of the system/application for bugs and errors.

  A. 1 and 3 only

  B. 2 and 3 only

  C. 2 and 4 only

  D. 3 and 4 only

  Correct Answer: B

• Question 240:

  Which of the following is a preventive control for fraud?

  A. Determining if the number of manually prepared disbursement checks is high.

  B. Reconciling the purchase orders with the requisitions.

  C. Verifying that new vendors appear on the vendor pre-approved list.

  D. Conducting an inventory count of the warehouse.

  Correct Answer: C