IIA-CIA-PART2 Online Practice Questions and Answers

The use of standard operating procedure questionnaires in audit fieldwork can be beneficial because.

A. These questionnaires can both identify discrepancies and educate clients.

B. Standard operating procedures are essential to the effectiveness and efficiency of operations.

C. These questionnaires are more comprehensive than are other types of techniques for gathering data during fieldwork.

D. These questionnaires do not normally require prior clearance with management of the audited area.

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:

A. Performed in accordance with the terms of the contract.

B. Carried out in accordance with the Standards.

C. Performed under the supervision of the information technology department.

D. Carried out using standard review procedures for retailers.

Which of the following is typically not a reason for committing financial statement fraud?

A. To dispel negative market perception.

B. To disguise a duplicate payment to a vendor.

C. To obtain more favorable terms on financing.

D. To receive performance-related bonuses.

What type of analysis is performed when an auditor tests for unusual variations in information by comparing the number of employees working at a factory site with the direct cost of production each month over a period of one year?

A. Trend analysis.

B. Ratio analysis.

C. Regression analysis.

D. Horizontal analysis.

When planning an audit engagement, what should an internal auditor first consider when assessing the risk of fraud in the area to be audited?

A. Impact of and exposure to fraud.

B. Existence of evidence of fraud.

C. Organizational structure.

D. Management's risk appetite.

During an audit of a contract for computer security, a governmental auditor finds that a contractor has developed a system that could be the most advanced in the industry. If it seems that the contractor is charging the government for developmental cost of a system that might be sold to other organizations, what is the auditor's best course of action?

A. Estimate the cost to develop the advanced security system and inform the contractor that it will be a disallowed cost.

B. Exclude the observation from the engagement final communication because the contract was vague and the level of security is clearly acceptable.

C. Estimate the added cost, report it to management, and suggest that management meet with its lawyers and the contractor to resolve differences.

D. Compare the cost of the security program with previous costs incurred by governmental operations and inform the contractor that the difference will be a disallowed cost.

According to IIA guidance, which of the following is true about the supervising internal auditor's review notes?

1.

They are discussed with management prior to finalizing the audit.

2.

They may be discarded after working papers are amended as appropriate.

3.

They are created by the auditor to support her fieldwork in case of questions.

4.

They are not required to support observations issued in the audit report.

A. 1 and 3 only

B. 1 and 4 only

C. 2 and 3 only

D. 2 and 4 only

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?

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

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

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

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

An internal auditor for a regional bank suspects that the head of commercial lending has been granting loans without the required collateral. Which of the following sampling techniques will be most effective for investigating the auditor's suspicion?

A. Variables sampling.

B. Dollar-unit sampling.

C. Judgmental sampling.

D. Discovery sampling.

As part of the preliminary survey, an internal auditor sent an internal control questionnaire to the accounts payable function. Based on the questionnaire responses, the auditor determines that there is no established procedure for adding and approving new vendors. What would the auditor do next?

A. Determine that this situation is acceptable and focus on more significant issues.

B. Document the issue in the draft audit report.

C. Document the observation for further follow up when testing the operating effectiveness of controls.

D. Interview the personnel associated with this observation.