IIA-CIA-PART2 practice questions 311–320

1. Question 311 · 475 in bank

   Some time after the final audit report was issued, the engagement supervisor learned that several internal control deficiencies were not remedied, despite management's previous agreement to remedy them. According to IIA guidance, which of the following is the most appropriate response?

   • AThe engagement supervisor must notify the chief audit executive (CAE) that the deficiencies have not been rectified.
   • BThe engagement supervisor should rely on professional judgment as to whether the CAE should be informed, or the management action plan should be adjusted.
   • CThe engagement supervisor should rely on his negotiation skills and issue an ultimatum to management to remedy the control deficiencies.
   • DEnsure that these deficiencies are captured in the documentation as high-priority areas to be reviewed during the next audit.

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   Answer: D

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2. Question 312 · 475 in bank

   A chief audit executive (CAE) reviews the supervision of an internal audit engagement. Which of the following would most likely assure the CAE that the engagement had adequate supervision?

   • AThe engagement supervisor has an open door policy for audit team members to discuss concerns.
   • BThe supervisor reviews weekly progress reports from the audit team members.
   • CThe supervisor reviews and initials internal audit workpapers for the engagement.
   • DThe supervisor meets periodically with management in the reviewed area to get feedback during the engagement.

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   Answer: C

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3. Question 313 · 475 in bank

   Which of the following would present the most critical external risk to an organization?

   • AThe organization experiences a merger, and the management team is reorganized and redistributed globally.
   • BThe organization launches a product into new global markets.
   • CAfter minimal testing, the organization implements a new system to replace a legacy system.
   • DRegulators announce broad legislative reforms applicable to the industry within which the organization operates.

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   Answer: D

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4. Question 314 · 475 in bank

   Which of the following statements is true regarding the final assurance engagement report issued to management?

   • ARatings are only used to assess the condition of an observation made by an internal auditor.
   • BAudit findings may be communicated to management prior to issuance of the final approved audit report.
   • CCommunications must be relevant, logical, and free from errors before they are disseminated.
   • DThe audit report must present the information in the following order: (1) audit scope, (2) engagement objectives, and (3) engagement results.

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   Answer: B

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5. Question 315 · 475 in bank

   An internal auditor for a regional bank suspects that the head of commercial lending has been granting loans without the required collateral. Which of the following sampling techniques will be most effective for investigating the auditor's suspicion?

   • AVariables sampling.
   • BDollar-unit sampling.
   • CJudgmental sampling.
   • DDiscovery sampling.

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   Answer: D

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6. Question 316 · 475 in bank

   An internal auditor is conducting an initial risk assessment of an audit area and wants to assess management's compliance with privacy laws for safeguarding customer information stored on the organization's servers. Which course of action is appropriate for this phase of the engagement?

   • ASolicit the services of a specialist information systems auditor.
   • BObtain the most current approved copies of the organization's privacy policy.
   • CConsult with legal counsel about new privacy laws to establish appropriate criteria.
   • DConsider the detection risk of noncompliance with the laws.

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   Answer: B

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7. Question 317 · 475 in bank

   An internal auditor receives a document displaying all the steps of a process and the path taken as transactions flow between each step of the process. How is the internal auditor most likely to use this document during the engagement?

   • ATo perform an assessment of the adequacy of process controls.
   • BTo perform an assessment of the effectiveness of process controls.
   • CTo perform a detailed assessment of process risks.
   • DTo perform an assessment of the sufficiency of residual process risks.

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   Answer: A

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8. Question 318 · 475 in bank

   The chief audit executive (CAE) should determine whether the internal audit activity has confirmed the status of all of management's corrective actions. Doing so would help the CAE assess which of the following?

   • ADisclosure risk.
   • BResidual risk.
   • CCompliance risk.
   • DInherent risk.

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   Answer: B

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9. Question 319 · 475 in bank

   Which of the following is the most important determinant of the objectives and scope of assurance engagements?

   • AThe organizational chart, business objectives, and policies and procedures of the area to be reviewed.
   • BThe most recent risk assessment conducted by management of the area to be reviewed.
   • CThe requests of operational and senior management throughout the organization.
   • DThe preliminary risk assessment performed by internal auditors planning the engagement.

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   Answer: D

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10. Question 320 · 475 in bank

    According to IIA guidance, which of the following statements regarding audit workpapers is true?

    • AAudit reports should include the workpapers as a reference for the audit conclusions.
    • BThe internal auditor's workpapers are the primary reference for reported control deficiencies.
    • CAd-hoc communications with management of the area under review should be excluded from the workpapers.
    • DBoth draft and final versions of workpapers should be saved at the end of the engagement.

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    Answer: B

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IIA-CIA-PART2 practice, question 311. 475 questions available.