IIA-CIA-PART2 practice questions 291–300

1. Question 291 · 475 in bank

   According to IIA guidance, which of the following factors should an internal auditor consider when assessing the likelihood of fraud risk?

   • AThe effect on the organization's reputation.
   • BAny potential damage to the organization's relationship with customers.
   • CPast fraud allegations and actual occurrences.
   • DThe potential and realized financial impacts.

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   Answer: C

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2. Question 292 · 475 in bank

   Management has taken immediate action to address an observation received during an audit of the organization's manufacturing process. Which of the following is true regarding the validity of the observation closure?

   • AValid closure requires evidence that ensures the corrected process will function as expected in the future.
   • BValid closure requires the client to address not only the condition, but also the cause of the condition.
   • CValid closure of an observation ensures it will be included in the final engagement report.
   • DValid closure requires assurance from management that the original problem will not recur in the future.

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   Answer: B

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3. Question 293 · 475 in bank

   In which of the following situations would an internal control questionnaire best suit the internal auditor's purpose?

   • AThe auditor wants to receive mid-level management insight on how to improve hiring practices.
   • BThe auditor wants to obtain information on whether adherence to approval matrices is actually taking place in different maintenance units.
   • CThe auditor wants to gain assurance that inventory counts are conducted in accordance with established procedures.
   • DThe auditor wants to assess whether different subsidiaries apply centrally established procurement rules in the same manner.

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   Answer: D

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4. Question 294 · 475 in bank

   The internal audit manager has been delegated the task of preparing the annual internal audit plan for the forthcoming fiscal year. All engagements should be appropriately categorized and presented to the chief audit executive for review. Which of the following would most likely be classified as a consulting engagement?

   • AEvaluating procurement department process effectiveness.
   • BHelping in the design of the risk management program.
   • CAssessing financial reporting control adequacy.
   • DReviewing environmental, social, and governance reporting compliance.

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   Answer: B

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5. Question 295 · 475 in bank

   A corporate merger decision prompts the chief audit executive (CAE) to propose interim changes to the existing annual audit plan to account for emerging risks. Which of the following is the most appropriate action for the CAE to take regarding the changes made to the audit plan?

   • APresent the revised audit plan directly to the board for approval.
   • BCommunicate with the chief financial officer and present the revised audit plan to the CEO for approval.
   • CPresent the revised audit plan directly to the CEO for approval.
   • DCommunicate with the CEO and present the revised audit plan to the board for approval.

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   Answer: D

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6. Question 296 · 475 in bank

   An internal auditor tested whether purchase orders were supported by appropriately approved purchase requisitions. She sampled a population of purchase documents and identified instances where purchase requisitions were missing. However, she did not notice that in some cases purchase requisitions were approved by an unauthorized person. Which of the following risks most appropriately describes this situation?

   • ANonsampling risk.
   • BSampling risk.
   • CInherent risk.
   • DDue diligence risk.

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   Answer: A

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7. Question 297 · 475 in bank

   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?

   • ACreating an automated tool that monitors the computer program on a daily basis for potential issues that need corrective actions.
   • BUsing an automated system that assists internal auditors with automating the risk analysis of the computer program for invoicing.
   • CEmbedding tools in the computer program to analyze the review processes of invoices for potential issues that may hamper payments.
   • DAdding invoices to the computer program to assess the reliability and effectiveness of the review process and whether controls work.

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   Answer: D

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8. Question 298 · 475 in bank

   An internal auditor is assigned to validate calculations on the organization's billing application. As part of the test, the internal auditor is required to use an automated audit tool to simulate transactions for testing. Which of the following would most appropriately be used for this purpose?

   • AGeneralized audit software.
   • BUtility software.
   • CIntegrated test facilities.
   • DAudit expert systems.

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   Answer: D

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9. Question 299 · 475 in bank

   An internal auditor observes a double payment transaction on a supplier invoice during an accounts payable engagement. Which of the following steps would be the most effective in helping the auditor determine whether fraud exists?

   • ASwitch the existing assurance engagement into a fraud investigation engagement.
   • BExtend the audit scope and perform additional testing of controls on other related areas.
   • CReview the prior year's transaction volume and amounts paid compared to the prior year's budget.
   • DPerform data analytics on the supplier's information, invoiced amounts, and payments performed.

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   Answer: D

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10. Question 300 · 475 in bank

    Which of the following is true about surveys?

    • AA survey with open-ended questions is weaker than a structured interview.
    • BA survey with closed-ended questions can produce quantifiable evidence.
    • CA survey's participants are likely to volunteer information that was not specifically requested.
    • DA survey, like inspections and confirmations, are best used to test the operating effectiveness of controls.

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    Answer: B

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IIA-CIA-PART2 practice, question 291. 475 questions available.