IIA IIA Certifications IIA-CIA-PART2 Questions & Answers

• Question 451:

  Which of the following must an auditor establish in order to demonstrate that fraud has occurred?

  A. Monetary damage to the victim.

  B. The suspect's intent.

  C. Existence of an internal control deficiency.

  D. Evidence of collusion.

  Correct Answer: B

• Question 452:

  Which of the following is not relevant when developing recommendations for inclusion in audit reports?

  A. Feasibility.

  B. Cost of implementation.

  C. Underlying causes.

  D. Timing of follow-up.

  Correct Answer: D

• Question 453:

  As a result of a recent discovery of false information on employment applications, an internal auditor has reviewed hiring procedures. Which of the following represents a weakness in the control system?

  I. Applicants are not required to have their signed applications legally authenticated.

  II. Applicants' educational information is not validated with the educational institution before employment is offered.

  III.

  Information related to applicants' long-term work history is not validated before employment is offered.

  A.

  III only

  B.

  I and II only

  C.

  II and III only

  D.

  I, II, and III

  Correct Answer: C

• Question 454:

  Recommendations should be included in the audit report in order to:

  A. Provide management with options for addressing audit findings.

  B. Ensure that audit findings are resolved in the manner suggested by the auditor.

  C. Minimize the amount of time required to correct audit findings.

  D. Ensure that audit findings are addressed by management.

  Correct Answer: A

• Question 455:

  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.

  II and IV only

  B.

  I, II, and III only

  C.

  I, III, and IV only

  D.

  I, II, III, and IV.

  Correct Answer: B

• Question 456:

  When conducting audit follow-up of a finding related to cash management routines, an internal auditor would expect to find that all of the following changes have occurred except:

  A. The steps being taken are resolving the condition disclosed by the finding.

  B. Inherent risk has been eliminated as a result of resolution of the condition.

  C. Controls have been implemented to deter or detect a recurrence of the finding.

  D. Benefits have accrued to the entity as a result of resolving the condition.

  Correct Answer: B

• Question 457:

  An internal auditor found that the cost of some material installed on capital projects had been transferred to the inventory account because the capital budget had been exceeded. Which of the following would be an appropriate technique for the auditor to use to determine the extent of the problem?

  A. Identify variances between amounts capitalized each month and the capital budget.

  B. Analyze a sample of capital transactions each quarter to detect instances in which installed material was transferred to inventory.

  C. Review all journal entries that transferred costs from capital to inventory accounts.

  D. Compare inventory receipts with debits to the inventory account and investigate discrepancies.

  Correct Answer: C

• Question 458:

  An audit identified a number of weaknesses in the configuration of a critical client/server system. Although some of the weaknesses were corrected prior to the issuance of the audit report, correction of the rest will require between six and 18 months for completion. Consequently, management has developed a detailed action plan, with anticipated completion dates, for addressing the weaknesses. Which of the following is the most appropriate course of action for the chief audit executive to take?

  A. Assess the adequacy of the action plan and monitor key dates and deliverables.

  B. Schedule a follow-up audit engagement to assess the status of corrective action.

  C. Reassign information systems auditors to assist the information technology department in correcting the weaknesses.

  D. Evaluate statistics related to unplanned system outages, unauthorized access attempts, and denials of service to assess the effectiveness of corrections.

  Correct Answer: A

• Question 459:

  The scope of a business process review primarily involves:

  A. Appraising the environment and comparing against established criteria.

  B. Assessing the organization's system of internal controls.

  C. Reviewing routine financial information and assessing the appropriateness of various accounting treatments.

  D. Evaluating organizational and departmental structures, including assessments of transaction flows.

  Correct Answer: D

• Question 460:

  A performance audit engagement typically involves:

  A. Review of financial statement information, including the appropriateness of various accounting treatments.

  B. Tests of compliance with policies, procedures, laws, and regulations.

  C. Appraisal of the environment and comparison against established criteria.

  D. Evaluation of organizational and departmental structures, including assessments of process flows.

  Correct Answer: C