Summer Sale Limited Time 65% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: ecus65

IIA IIA-CIA-Part2 - Practice of Internal Auditing

Page: 5 / 15
Total 495 questions

The final engagement communication contains the following observation:

The internal auditor discovered that three of the 10 contracts reviewed failed to meet the organization's competitive bidding requirements Management explained that senior management deemed these purchases to be critical and awarded them as sole-source."

Which of the following components is missing in the documentation of the observation?

A.

Criteria.

B.

Effect

C.

Condition

D.

Cause

The internal audit activity has become aware of public complaints regarding the sales practices of telephone marketing personnel in a large organization. The internal auditors decide to review a sample of all complaints within the last three months to ensure they are reflective of current marketing practices. Which of the following best describes this sampling technique?

A.

Judgmental sampling

B.

Random sampling

C.

Discovery sampling

D.

Statistical sampling

Which of the following is an example of internal benchmarking?

A.

Book value per common share ratio is lower than that of the prior year.

B.

Staff turnover ratio is higher than the comparable organization in the same industry.

C.

Utilities expense of the sales unit is higher than that of the customer service unit.

D.

Sales are significantly higher than the industry’s average for five years.

Which of the following components should be included in an audit finding?

1. The scope of the audit.

2. The standard(s) used by the auditor to make the evaluation.

3. The engagement's objectives.

4. The factual evidence that the internal auditor found in the course of the examination.

A.

1 and 2

B.

1 and 3 only

C.

2 and 4

D.

1, 3, and 4

A senior internal auditor is hired within the internal audit activity for a period of two years before advancing to an operations manager role within the business operations team. When staffing arrangement is being used in this scenario?

A.

Comer of competence

B.

Career model

C.

Rotational model

D.

Cosourcing agreement

Which of the following activities demonstrates an example of the chief audit executive performing residual risk assessment?

A.

Cost-benefit analysis of management not implementing a recommendation to address an observation.

B.

Inquiry of corrective action to be completed within a certain period.

C.

Reporting the status of every observation for every engagement in a detailed manner.

D.

Soliciting management’s feedback after completion of the audit engagement.

An employee in the sales department completes a purchase requisition and forwards it to the purchaser. The purchaser places competitive bids and orders the requested items using approved purchase orders. When the employee receives the ordered items, she forwards the packing slips to the accounts payable department. The invoice for the ordered items is sent directly to the sales department, and an administrative assistant in the sales department forwards the invoices to the accounts payable department for payment. Which of the following audit steps best addresses the risk of fraud in the cash receipts process?

A.

Verify that approvals of purchasing documents comply with the authority matrix.

B.

Observe whether the purchase orders are sequentially numbered.

C.

Examine whether the sales department supervisor approves invoices for payment.

D.

Determine whether the accounts payable department reconciles all purchasing documents prior to payment.

In order to obtain background information on an assigned audit of data center operations an internal auditor administers control questionnaires to select individuals who have primary responsibilities within the process. Which of the following is a drawback of this approach?

A.

It will be difficult to quantify the information obtained through this approach

B.

This approach does not help the auditor learn about the existence of controls

C.

It takes the auditor a long time to assess the relevant controls using this approach

D.

Information on control functionality is limited

According to IIA guidance, which of the following are the most important objectives for helping to ensure the appropriate completion of an engagement?

1. Coordinate audit team members to ensure the efficient execution of all engagement procedures.

2. Confirm engagement workpapers properly support the observations, recommendations, and conclusions.

3. Provide structured learning opportunities for engagement auditors when possible.

4. Ensure engagement objectives are reviewed for satisfactory achievement and are documented properly.

A.

1, 2, and 3

B.

1, 2, and 4

C.

1, 3, and 4

D.

2, 3, and 4

During the filework phase of an assurance engagement the internal auditor decides that she wants to adjust the audit work program. Which of the following is the most appropriate next step for the auditor to take9

A.

Request additional information needed from management of the area under review.

B.

Obtain approval from the engagement supervisor

C.

Obtain the required resources, including IT. to complete the work

D.

Discuss the change in scope with management of the area under review.