Pass Exam With Full Sureness – IIA-CIA-Part2 Dumps with 360 Questions [Q214-Q234]

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Pass Exam With Full Sureness – IIA-CIA-Part2 Dumps with 360 Questions

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QUESTION 214
Which of the following statements regarding the use of external contracted services by the chief audit executive (CAE) is false?

The CAE’s responsibility is not impaired by engaging an external expert.

The external expert could have a prior relationship with the audit client.

The audit report should not disclose the use of contracted services.

The expert should be directed by the objectives and scope of work.

QUESTION 215
According to IIA guidance, which of re following actions should the internal auditor take immediately after having considered fraud scenarios and identified and prioritized fraud risks?

Determine which controls if any are in place to mitigate the fraud risks

Follow protocol for internal reporting and investigating fraud allegations

Research frauds that nave occurred t similar organizations

Incorporate the fraud risk assessment into the engagement plan

QUESTION 216
Which of the following does not represent a difficulty in using red flags as fraud indicators?

Many common red flags are also associated with situations where no fraud exists.

Some red flags are difficult to quantify or to evaluate.

Red flag information is only gathered in extraordinary circumstances.

The red flags literature is not well enough established to have a positive impact on auditing.

QUESTION 217
It is close to the fiscal year end for a government agency, and the chief audit executive (CAE) has the following items to submit to either the board or the chief executive officer (CEO) for approval. According to IIA guidance, which of the following items should be submitted only to the CEO?

The internal audit risk assessment and audit plan for the next fiscal year.

The internal audit budget and resource plan for the coming fiscal year.

A request for an increase of the CAE’s salary for the next fiscal year.

The evaluation and compensation of the internal audit team.

QUESTION 218
Which of the following data sources would provide the least valid data for an audit of a retail store’s customer service?

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

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

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

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

QUESTION 219
Which of the following actions best describes an internal auditor’s use of test data to determine whether an organization’s new accounts payable system avoids processing questionable invoices for payment?

Creating an automated tool that monitors the computer program on a daily basis for potential issues that need corrective actions.

Using an automated system that assists internal auditors with automating the risk analysis of the computer program for invoicing

Embedding tools in the computer program to analyze the review processes of invoices for potential issues that may hamper payments

Adding invoices to the computer program to assess the reliability and effectiveness of the review process and whether controls work.

QUESTION 220
An auditor evaluating excessive product rejection rates should investigatE.
I.
Communication between sales and production departments on sales returns.
II.
Volume of product sales year-to-date in comparison to prior year-to-date.
III.
Changes in credit ratings of customers versus sales to those customers.
IV.
Detailed product scrap accounts and accumulations.

I and III only

I and IV only

II, III, and IV only

I, II, III, and IV.

QUESTION 221
Which of the following is a red flag associated with improper asset valuation?

Unusual increase in gross margin.

Unusual decrease in the number of days’ purchases in inventory.

Recurring positive cash flows from operations.

Allowance for bad debts that is increasing in percentage terms.

QUESTION 222
Which of the following conditions is the strongest indicator of possible fraud?

An assistant treasurer who refuses to take vacations.

Independent reconciliations of subsidiary to general ledgers that are not always completed on a timely basis.

A condition of excess manufacturing waste material.

A manager who is often over budget at the end of a reporting period.

QUESTION 223
Which of the following best exemplifies having effective risk management and internal control processes?

Relevant risk indicators and mitigation plans are in place

All risks are identified and assessed

Business profitability is likely to be achieved

Risk information is communicated to customers and suppliers

QUESTION 224
Due to a recent system upgrade, an audit is planned to test the payroll process. Which of the following audit objectives would be most important to prevent fraud?

Verify that amounts are correct.

Verify that payments are on time.

Verify that recipients are valid employees.

Verify that benefits deductions are accurate.

QUESTION 225
An internal auditor recommended that an organization implement computerized controls in its sales system in order to prevent sales representatives from executing contracts in excess of their delegated authority levels. A follow-up review found that the sales system had not been modified, but a process had been implemented to obtain written approval by the vice president of sales for all contracts in excess of $1 million. The chief audit executive (CAE) would be justified in reporting this situation to the organization’s board if:
I. In the opinion of the CAE, the level of residual risk assumed by senior management is too high.
II. Testing of compliance with the new process finds that all new contracts in excess of $1 million have been approved by the vice president of sales.
III. The cost of modifying the sales system to include a preventive control is less than $100,000.

I only

III only

I and III only

I, II, and III

QUESTION 226
Reviewing internal audit report drafts with clients is:
—-
Required according to the Standards.
A form of courtesy.
Ethically mandated.
A form of validation.

1 and 2 only.

2 and 3 only.

2 and 4 only.

3 and 4 only.

QUESTION 227
If management expects 100 percent compliance with a procedure, which of the following sampling approaches would be most appropriate?

Attributes sampling.

Discovery sampling.

Targeted sampling.

Variables sampling.

QUESTION 228
Which of the following is the best approach for obtaining feedback from engagement clients regarding the quality of internal audit work?

Ask questions during the exit interviews and send copies of the documented responses to the clients.

Call engagement clients after the exit interviews and send copies of the documented responses to the clients.

Distribute questionnaires to selected engagement clients shortly before preparing the internal audit annual activity report.

Provide questionnaires to engagement clients at the beginning of each engagement and request that the clients complete and return them after the engagements.

QUESTION 229
An internal audit intends to create a risk and control matrix to better understand the organization’s complex manufacturing process. With which of the following approaches would the auditor most likely start?

Assess management responses to key risk exposures

Analyze the costs and benefits of key controls

Evaluate the design adequacy of known controls

Conduct a walk-through of all related activates

QUESTION 230
An internal auditor has a recommendation to change operations which could potentially increase profits by $50,000. The best way to sell this recommendation to management is to:

Carefully work out the details of implementation before presenting it to department management.

Discuss it with operating supervisors who are directly affected by the change, and then with department management.

Bring it to the audit manager, who should bring it immediately to senior management’s attention.

Wait until the exit conference to discuss it in order to ensure all affected parties are present.

QUESTION 231
An internal auditor is conducting an initial risk assessment of an audit area and wants to assess management’s compliance with privacy laws for safeguarding customer information stored on the organization’s servers Which course of action is appropriate for this phase of the engagement?

Solicit the services of a specialist information systems auditor

Obtain the most current approved copies of the organization’s privacy policy

Consult with legal counsel about new privacy laws to establish appropriate criteria

Consider the detection risk of noncompliance with the laws

QUESTION 232
A chief audit executive (CAE) of a major retailer has engaged an independent firm of information security specialists to perform specialized internal audit activities. The CAE can rely on the specialists’ work only if it is:

Performed in accordance with the terms of the contract.

Carried out in accordance with the Standards.

Performed under the supervision of the information technology department.

Carried out using standard review procedures for retailers.

QUESTION 233
The most effective procedure to verify compliance with a requirement that materials be purchased from the lowest-priced source is to compare:

Prices paid for selected materials with prices listed on related purchase orders.

Bids obtained for selected purchases with related purchase orders.

Vendors’ current prices with prices listed on related purchase orders.

Approved vendor lists with bids obtained for selected purchases.

QUESTION 234
The chief audit executive (CAE) of an organization has established an internal audit activity (IAA) quality assessment program. According to IIA guidance, which of the following would be part of this program?

Assessment of the IAA conducted independently of client feedback, and the review of individual audits to determine the quality and timeliness of supervision.

Assessment of the IAA conducted independently of client feedback, and identified areas of improvement reviewed at the end of the year.

Compliance with a checklist of required audit procedures, and review of individual audits to determine the quality and timeliness of supervision.

Compliance with a checklist of required audit procedures, and identified areas of improvement reviewed at the end of the year.

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