IIA IIA Certifications IIA-CIA-PART2 Questions & Answers

• Question 341:

  With which of the following would the internal audit activity discuss findings, conclusions and recommendations prior to issuance of internal audit report?

  1.

  Business unit management.

  2.

  Chief audit executive.

  3.

  Audit committee.

  4.

  Chief executive officer.

  A. 1 and 2 only

  B. 1 and 3 only

  C. 2 and 3 only

  D. 1, 2, 3, and 4

  Correct Answer: A

• Question 342:

  When determining the nature, timing, and extent of follow up, the chief audit executive considers all of the following factors except:

  A. Significance of the reported observation or recommendation, degree of effort, and cost needed to correct the reported condition.

  B. Impact that may result should the corrective action fail.

  C. Authority and responsibility of the person required to take corrective action.

  D. Complexity of the corrective action and time period involved.

  Correct Answer: C

• Question 343:

  The internal auditor's opinion in terms of due professional care should be:

  A. Limited to the effectiveness of internal controls.

  B. Expressed only when consensus with top management has been achieved.

  C. Based on experience and free of all bias.

  D. Based on sufficient factual evidence.

  Correct Answer: D

• Question 344:

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

  A. The standards, measures, or expectations used in making an evaluation or verification.

  B. The reason for the difference between the expected state and the actual state.

  C. The factual evidence that the internal auditor found in the course of the examination.

  D. The risk or exposure the organization encounters because the actual state is not consistent with the criteria.

  Correct Answer: C

• Question 345:

  Information gathered in a forensic investigation of business fraud is usually gathered with which of the following standards in mind?

  A. Generally Accepted Auditing Standards.

  B. Generally Accepted Accounting Principles.

  C. The International Professional Practices Framework.

  D. Legal evidence.

  Correct Answer: D

• Question 346:

  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 adequate control over the custody of working papers is exercised by the auditor.

  B. To ensure that as part of the documentation the auditor collected original documents that can corroborate the audit findings.

  C. To ensure that the work papers create background for subsequent reviews.

  D. To ensure that the audit programs are followed by the auditor.

  Correct Answer: D

• Question 347:

  Which of the following types of contracts would provide the least incentive for a contractor to achieve economy and efficiency?

  A. Lump-sum contract.

  B. Cost-plus contract.

  C. Unit-price contract.

  D. Indefinite delivery contract.

  Correct Answer: B

• Question 348:

  Production managers for a manufacturing company are authorized to prepare emergency purchase orders for raw materials. These manually prepared orders do not go through the purchasing department and do not require a receiving report. The managers forward the invoice and purchase order to the accounting department for payment. Which of the following internal controls would efficiently prevent abuse of this system?

  A. Institute a company policy requiring rotation of orders among several suppliers.

  B. Require a manual receiving report from the warehouse prior to payment.

  C. Forbid the use of emergency purchase orders.

  D. Review the level of safety stock.

  Correct Answer: B

• Question 349:

  Which of the following is most appropriate when conducting an interview during the course of a fraud investigation?

  A. Schedule the interview well in advance.

  B. Explain the detailed purpose to the interviewee.

  C. Assume that the interviewee is guilty.

  D. Have a witness present during the interview.

  Correct Answer: D

• Question 350:

  An organization's policies allow buyers to authorize expenditures up to $50,000 without any other approval. Which of the following audit procedures would be most effective in determining if fraud in the form of payments to fictitious companies has occurred?

  A. Use generalized audit software to list all purchases over $50,000 to determine whether they were properly approved.

  B. Develop a snapshot technique to trace all transactions by suspected buyers.

  C. Use generalized audit software to take a random sample of all expenditures under $50,000 to determine whether they were properly approved.

  D. Use generalized audit software to select a sample of paid invoices to new vendors and examine evidence that shows that services or goods were received.

  Correct Answer: D