IIA-CIA-PART2 Online Practice Questions and Answers

When conducting research, which of the following is most important?

A. Using computer databases or the Internet to find all relevant sources.

B. Providing documentation of the reference sources.

C. Presenting only those facts that support the conclusion.

D. Presenting all contrary views to balance the opinion.

What is the most important risk in determining the validity of construction delay claims?

A. Contractor claims may be submitted prior to completion of the work.

B. Contractor claims may include costs considered in the fixed-price portion of the work.

C. Contractor claims may include subcontractor estimates of balances due to the subcontractor.

D. Contractor claims may be understated.

Which of the following is the correct ratio to use in calculating the dollar value of the population if the auditor is using ratio estimation?

Number of Items Audited Value Carrying Amount Sample $500,000 $480,000 Population 3,000 $5,000,000

A. 0.10

B. 0.96

C. 1.04

D. 10.00

Why should internal auditors develop a strong relationship with the external auditors?

A. External auditors offer an additional layer of approval to internal auditors' reports.

B. External auditors can help improve the effectiveness of internal control sampling techniques.

C. External auditors can offer an independent and knowledgeable viewpoint.

D. External auditors can share information gained from work with similar clients.

Which of the following conditions should a chief audit executive take into account when deciding if a follow-up audit engagement is necessary?

1.

The reported observations were significant and high risk.

2.

Internal audit resources and the time it will require for follow-up.

3.

Management may not have the resources to take action.

4.

Management has previously decided not to take any action.

A. 1, 2, and 3 only

B. 1, 2, and 4 only

C. 1, 3, and 4 only

D. 2, 3, and 4 only

The chief audit executive (CAE) is adding a new audit position to the team. According to the International Professional Practices Framework, which of the following candidates would the CAE be least likely to accept for the position?

A. The candidate is applying for an IT audit position, while originally coming from an IT background, but has only experiences of financial and compliance audits in the previous position.

B. The candidate is knowledgeable about potential indicators of fraud including typical risks, but has only participated as a staff auditor in one investigative fraud audit.

C. The candidate meets the minimum educational requirements established by the chief audit executive, but has less formal education than any of the other candidates being considered.

D. The candidate provides examples of previous reports demonstrating excellent writing skills, but lacks ability to clearly communicate ideas and conclusions in a meeting.

Which of the following are key characteristics of enterprise risk management?

1.

It considers risk in the formulation of strategy.

2.

It applies risk management in some units of an entity.

3.

It takes a portfolio view of risks throughout the enterprise.

4.

It restricts the organization's ability to seize opportunities inherent in future events.

A. 2 and 3 only

B. 1 and 3 only

C. 2 and 4 only

D. 1 and 4 only

In which of the following situations would an internal auditor consider the need to outsource competencies and skills?

A. During the inspection of a wind turbine, an internal auditor notices that some replaced parts look used. According to purchase documents, the parts still have a long lifespan.

B. The auditor believes that the audit client's actions contradict the organization's code of conduct. The audit client disagrees and says his actions are for the organization's benefit.

C. An audit team member is allocated to conduct an assurance engagement in the sales unit. However, the same auditor performed an assurance engagement in that area just one year prior.

D. During an inventory count, the auditor ascertained that some goods were missing. The audit client argues that the auditor does not understand how inventory should be counted.

Which of the following statements about including consulting engagements in the annual internal audit plan is true?

A. All requests for consulting engagements must be included in the annual internal audit plan.

B. Assurance engagements must be included in the annual internal audit plan, but there is no requirement to include consulting engagements.

C. Consulting engagements do not need to be included in the annual internal audit plan unless requested by the board.

D. The acceptance of proposed consulting engagements into the annual internal audit plan may depend on their ability to add value.

At a construction company, an internal auditor is planning an audit of the company's process for designing and building grid connections. The process involves customers making payments in three parts:

The first payment of 10% after approval of the customer's application. The second payment of 70% prior to construction.

The third payment of 20% after construction is complete.

Which of the following key controls should the auditor test to ensure that the company is not taking any unwanted credit risks?

A. Controls that ensure that grid connection design is finalized before construction is approved to begin.

B. Controls that ensure construction orders are initiated after the second invoice is paid.

C. Controls that ensure all three invoices are calculated correctly according to the total project cost.

D. Controls that ensure that applications are verified for approval prior to initiating design and construction.