IIA IIA Certifications IIA-CIA-PART2 Questions & Answers

• Question 381:

  Which of the following is not likely to be included as an audit step when assessing vendor performance policies?

  A. Determine whether agreed-upon lot sizes were sent by vendors.

  B. Determine whether only authorized items were received from vendors.

  C. Determine whether the balances owed to vendors are correct.

  D. Determine whether the quality of the goods purchased from the vendors has been satisfactory.

  Correct Answer: C

• Question 382:

  Which of the following is least likely to vary when conducting audit engagements in different regions of an international organization?

  A. Application of governmental regulations to business activities.

  B. Work schedules and holidays of the individual regions.

  C. Level of workpaper documentation needed to support audit observations.

  D. Availability of technology and technical support.

  Correct Answer: C

• Question 383:

  A chief audit executive (CAE) is evaluating four potential audit engagements based on the following factors: the engagement's ability to reduce risk to the organization, the engagement's ability to save the organization money, and the extent of change in the area since the last engagement. The CAE has scored the engagements for each factor from low to high, assigned points, and calculated an overall ranking. The results are shown below with the points in parentheses:

  Risk Reduction Cost Savings Changes

  High (3) Medium (2) Low (1)

  High (3) Low (1) High (3)

  Low (1) High (3) Medium (2)

  Medium (2) Medium (2) High (3)

  If the organization has asked the CAE to consider the cost savings factor to be twice as important as any other factor, which engagements should the CAE pursue?

  A. 1 and 2 only

  B. 1 and 3 only

  C. 2 and 4 only

  D. 3 and 4 only

  Correct Answer: D

• Question 384:

  A bank uses a risk analysis matrix to quantify the relative risk of auditable entities. The analysis involves rating auditable entities on risk factors using a scale of 1 to 10, with 10 representing the greatest risk. A partial list of risk factors and the ratings given to three of the bank's departments is provided below: Which of the following statements regarding risk in the department is true?

  

  A. As compared to departments A and C, department B has a stronger control system to compensate for the greater complexity of the department's transactions and dollar value of its assets.

  B. The internal audit activity should schedule audits of department B more often than audits of department C because of the relative control strength of department C as compared to department B.

  C. The nature of department A's control structure may be justified by the nature of the department's assets and the complexity of its transactions.

  D. The relative ranking of the departments in order of their risk, from greatest to least risk, is: A; C; B.

  Correct Answer: C

• Question 385:

  Which of the following would have the least impact (either positive or negative) on an assessment of a department's control environment?

  A. The department managed long-term investments, including investment in derivatives and other financial instruments, to maximize return.

  B. The department manager sets a tone of honesty and integrity in all business dealings and this tone is emulated by department personnel.

  C. Many department functions were duplicated or verified by other department employees as part of the department's normal procedures.

  D. Audit tests designed to verify compliance with control procedures detected a general failure to follow standard procedures for transaction authorization.

  Correct Answer: A

• Question 386:

  During an audit, an employee, who does not want to be identified, offers to provide information that would be damaging to the organization and may concern illegal activities. Which of the following actions by the auditor would not be consistent with the IIA Code of Ethics and Standards?

  A. Promising to maintain the employee's anonymity and listening to the information.

  B. Suggesting that the employee consider talking to legal counsel.

  C. Informing the employee that an attempt will be made to keep the source of the information confidential while looking into the matter further.

  D. Informing the employee of other methods of communicating this type of information.

  Correct Answer: A

• Question 387:

  In reviewing the appropriateness of the minimum quantity level of inventory established by a department, an auditor would be least likely to consider:

  A. Stockout costs, including lost customers.

  B. Seasonal variations in forecasting inventory demand.

  C. Optimal order sizes determined by an economic order quantity model.

  D. The potential for obsolescence of inventory items.

  Correct Answer: C

• Question 388:

  Which of the following examples of audit evidence is the most persuasive?

  A. Real estate deeds, which were properly recorded with a government agency.

  B. Canceled checks written by the treasurer and returned from a bank.

  C. Time cards for employees, which are stored by a manager.

  D. Vendor invoices filed by the accounting department.

  Correct Answer: A

• Question 389:

  Which of the following data sources would provide the least valid data for an audit of a retail store's customer service?

  A. A graph that compares staffing levels for selected times with store traffic (number of customers) over the same time period.

  B. A random survey of customer satisfaction given to customers as they leave the store.

  C. Interviews of randomly selected service personnel regarding the quality of service that they provide.

  D. A graph of customer service training across stores, comparing training with overall levels of service satisfaction.

  Correct Answer: C

• Question 390:

  Which of the following types of sampling techniques should an internal auditor use when testing the effectiveness of internal controls?

  A. Mean-per-unit sampling.

  B. Attributes sampling.

  C. Variables sampling.

  D. Dollar-unit sampling.

  Correct Answer: B