IIA-CIA-PART2 practice questions 251–260

1. Question 251 · 475 in bank

   An internal auditor has been assigned to perform a quality audit on a manufacturing plant. Which course of action should the auditor perform first?

   • ACompare the planned outputs with the actual outputs.
   • BAscertain the costs of materials purchased.
   • CEvaluate the plant's ability to meet production quotas.
   • DReview the levels of scrap and rework.

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   Answer: D

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2. Question 252 · 475 in bank

   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:

   • ACarefully work out the details of implementation before presenting it to department management.
   • BDiscuss it with operating supervisors who are directly affected by the change, and then with department management.
   • CBring it to the audit manager, who should bring it immediately to senior management's attention.
   • DWait until the exit conference to discuss it in order to ensure all affected parties are present.

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   Answer: B

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3. Question 253 · 475 in bank

   According to IIA guidance, which of the following are acceptable strategies for an internal audit activity (IAA) to establish or build relationships?

   • AAssist executives with their administrative and governance responsibilities, and encourage all IAA members to develop relationships with the organization's executives.
   • BAssist executives with their administrative and governance responsibilities, and ensure that all communications with the board are formal audit reports or preset agendas.
   • CDuring an engagement, restrict communications with affected executives to matters pertaining to the engagement; and encourage all IAA members to develop relationships with the organization's executives.
   • DDuring an engagement, restrict communications with affected executives to matters pertaining to the engagement; and ensure that all communications with the

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   Answer: A

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4. Question 254 · 475 in bank

   Which of the following factors would increase the confidence level in a variables sampling plan? I. A larger sample size. II. A stratified sample. III. A larger standard deviation.

   • AI and II only
   • BI and III only
   • CII and III only
   • DI, II, and III

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   Answer: A

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5. Question 255 · 475 in bank

   Which of the following statements is true regarding the communication of audit engagement observations?

   • ACriteria, condition, cause, and effect must be communicated for material observations only
   • BCriteria, condition, cause, and effect must be communicated for material observations and significant deficiencies only
   • CCriteria, condition, cause, and effect must be communicated for all engagement observations.
   • DCriteria, condition, cause, and effect do not need to be communicated for insignificant observations with adequate compensating key controls.

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   Answer: C

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6. Question 256 · 475 in bank

   If an auditor is sampling to test compliance with a particular company policy, which of the following factors should not affect the allowable level of sampling risk?

   • AThe experience and knowledge of the auditor.
   • BThe adverse consequences of noncompliance.
   • CThe acceptable level of risk of making an incorrect audit conclusion.
   • DThe cost of performing auditing procedures on sample selections.

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   Answer: A

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7. Question 257 · 475 in bank

   During an audit of an ethics program, which of the following procedures are most appropriate to evaluate the effectiveness of the program? Testing whether corrective actions taken on involved parties breaching the ethics program are adequate. Testing whether all employees are mandated through policy to comply with the ethics program. Testing whether all employees are required to confirm in writing their compliance with the ethics program. Testing through surveys employee's level of understanding and commitment to the ethics program.

   • A1 and 2 only
   • B1 and 4 only
   • C2 and 3 only
   • D3 and 4 only

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   Answer: B

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8. Question 258 · 475 in bank

   The chief audit executive of a large publicly held bank is using a risk based approach to update the annual audit plan. Which of the following sources of information will have the least impact on the plan?

   • AThe 12 month forecast of commercial property values.
   • BRecent changes to the bank's strategic plan.
   • CRegulatory changes impacting capitalization for all publicly traded banks.
   • DContinuous changes in the prime lending rate set by the country's central bank.

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   Answer: A

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9. Question 259 · 475 in bank

   According to IIA guidance, which of the following should be considered when creating policies and procedures for the internal audit activity (IAA)?

   • ANumber of auditors, complexity of audit activities, and structure of the IAA.
   • BNumber of auditors, complexity of audit activities, and audit staff skills and competencies.
   • CNumber of auditors, structure of the IAA, and audit staff skills and competencies.
   • DComplexity of audit activities, structure of the IAA, and audit staff skills and competencies.

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   Answer: A

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10. Question 260 · 475 in bank

    According to IIA guidance,when performing a compliance audit of data security standards for a large e-commerce retailer, which of the following would represent the least likely area of risk exposure?

    • AOperational risks.
    • BChange or configuration risks.
    • CAccess risks.
    • DPhysical security risks.

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    Answer: D

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IIA-CIA-PART2 practice, question 251. 475 questions available.