IIA-CIA-PART2 practice questions 131–140

1. Question 131 · 475 in bank

   The efficiency of internal audit operations is best enhanced if workpaper standards:

   • APermit the extent of documentation to vary according to engagement objectives.
   • BRequire supervisors to initial and date each workpaper that they review.
   • CAllow access to workpapers by external parties if approved by senior management or the audit committee.
   • DMandate the workpaper retention period.

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   Answer: A

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2. Question 132 · 475 in bank

   According to the International Professional Practices Framework, which of the following statements is correct regarding the communication of audit results? I. Summary reports may be issued separately from or in conjunction with the final report. II. Interim reports may be written or oral. III. Detailed reports should always be issued to the audit committee. IV. Interim reports should be used to communicate information which requires immediate attention.

   • AI and III only
   • BII and IV only
   • CI, II, and IV only
   • DI, II, III, and IV.

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   Answer: C

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3. Question 133 · 475 in bank

   A newly promoted chief audit executive (CAE) is faced with a backlog of assurance engagement reports to review for approval. In an attempt to attach a priority for this review, the CAE scans the opinion statement on each report. According to IIA guidance, which of the following opinions would receive the lowest review priority? 1. Graded positive opinion. 2. Negative assurance opinion. 3. Limited assurance opinion. 4. Third-party opinion.

   • A1 and 3
   • B1 and 4
   • C2 and 3
   • D2 and 4

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   Answer: C

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4. Question 134 · 475 in bank

   According to the Standards, which of the following is applicable to the internal audit activity's quality assurance and improvement program?

   • APeriodic monitoring of the internal audit activity should be done.
   • BAll aspects of the internal audit activity should be evaluated.
   • CAn external assessment should be obtained every three years.
   • DThe review of assurance services should be the primary focus.

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   Answer: B

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5. Question 135 · 475 in bank

   During the planning phase of an audit of the treasury function, an internal auditor conducted a risk assessment of the function in order to:

   • AReport any high-risk exposures of the treasury function to management and the board.
   • BDetermine whether appropriate resources are present to carry out the treasury function.
   • CComply with the internal audit charter and applicable regulatory requirements.
   • DIdentify areas of the treasury function that should be considered for potential engagement objectives.

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   Answer: D

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6. Question 136 · 475 in bank

   After finalizing an assurance engagement concerning safety operations in the oil mining process, the audit team concluded that no key controls were compromised. However, some opportunities for improvement were noted. Which of the following would be the most appropriate way for the chief audit executive (CAE) to report these results?

   • AThe CAE should send the final report to operational and senior management and the audit committee.
   • BThe CAE should send the final report to operational management only, as there is no need to communicate this information to higher levels.
   • CThe CAE should notify operational and senior management that the audit engagement was completed with no significant findings to report.
   • DThe CAE should send the final report to operational management and notify senior management and the audit committee that no significant findings were

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   Answer: D

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7. Question 137 · 475 in bank

   As part of an operational audit, an auditor compared records of current inventory with usage during the prior two-year period and determined that the spare parts inventory was excessive. What step should the auditor perform first?

   • ADetermine the effects of a stock-out on the organization's profitability.
   • BDetermine whether a clear policy exists for setting inventory limits.
   • CDetermine who approved the purchase orders for the spare parts.
   • DDetermine whether purchases were properly recorded.

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   Answer: B

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8. Question 138 · 475 in bank

   The chief audit executive (CAE) determined that based on management's oral response, the action taken regarding an audit observation was sufficient when weighted against the relative importance of the audit recommendation. Which of the following is the most appropriate step for the internal auditor to take next?

   • AInitiate a follow-up audit to ensure that action has really been taken.
   • BFollow-up with management until a written response is obtained.
   • CEscalate the issue to the board and get their position on the issue.
   • DNote in the permanent file that follow-up needs to be performed as part of the next engagement.

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   Answer: D

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9. Question 139 · 475 in bank

   Ordinarily, which of the following would not be an objective of an internal audit quality assurance review?

   • AEnsuring that the internal audit activity meets the external auditor's expectations.
   • BEnsuring that the internal audit activity has an audit charter approved by the board of directors.
   • CComplying with specific standards for the professional practice of internal auditing.
   • DEnsuring the adequacy of the goals, mission and vision of the internal audit activity.

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   Answer: A

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10. Question 140 · 475 in bank

    Which of the following would be the least desirable criteria against which to judge current operations of an organization's treasury function?

    • AThe operations of the treasury function as documented during the last audit engagement.
    • BCompany policies and procedures delegating authority and assigning responsibilities.
    • CFinance textbook illustrations of generally accepted good treasury function practices.
    • DCodification of best practices of the treasury function in relevant industries.

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    Answer: A

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IIA-CIA-PART2 practice, question 131. 475 questions available.