IIA-CIA-PART2 practice questions 401–410

1. Question 401 · 475 in bank

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

   • AThe annual audit plan should only be adjusted in response to problems with resourcing, scope, and data availability
   • BThe chief audit executive (CAE) may incorporate risk information, including risk appetite levels from management, for the audit plan at her discretion
   • CIn an immature risk management environment, it is preferable for the CAE to rely solely on her judgment regarding risk identification and assessment to develop the audit plan.
   • DThe CAE may make adjustments to the annual audit plan as needed without senior management or board approval

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   Answer: B

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2. Question 402 · 475 in bank

   The internal audit activity noted there were minimal controls in place over the petty cash fund. Which of the following recommendations would be the most appropriate?

   • AEliminate the petty cash fund and require all expenses to be reimbursed through an expense report.
   • BRecommend that surprise cash counts be performed by another independent employee.
   • CAdvise management to purchase a vault along with security cameras to monitor the movement of cash.
   • DInstitute a monthly reconciliation process with reimbursement through a miscellaneous expense account.

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   Answer: C

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3. Question 403 · 475 in bank

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

   • ACost-benefit analysis of management not implementing a recommendation to address an observation.
   • BInquiry of corrective action to be completed within a certain period.
   • CReporting the status of every observation of every engagement in a detailed manner.
   • DSoliciting management’s feedback after completion of the audit engagement.

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   Answer: D

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4. Question 404 · 475 in bank

   According to IIA guidance, which of the following should be a primary objective for an internal auditor who is conducting an exit conference?

   • AImprove relations with the engagement clients.
   • BPresent the final engagement communication.
   • CIdentify concerns for future audit engagements.
   • DEnsure the accuracy of engagement conclusions.

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   Answer: A

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5. Question 405 · 475 in bank

   A chief audit executive (CAE) following up on action plans from previously completed audits identifies that management has determined that certain action plans are no longer necessary. If the CAE disagrees with management's decision, which of the following is the most appropriate next step for the CAE to take?

   • AThe CAE must discuss the matter with senior management.
   • BThe CAE must discuss the matter with key shareholders.
   • CThe CAE must discuss the matter with legal counsel.
   • DThe CAE must discuss the matter with the board.

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   Answer: A

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6. Question 406 · 475 in bank

   Which of the following statements is true regarding risk assessments, including the evaluation and prioritization of risk and control factors?

   • AA risk-by-process matrix enables the user to determine associations between any of the processes and the risks.
   • BThe risk-factor approach for linking business processes and risks is more direct than the use of a risk-by-process matrix.
   • CInternal risk factors are built into the environment and the nature of the process itself.
   • DA risk map is used primarily to depict which risks will be reduced and which will be shared.

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   Answer: C

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7. Question 407 · 475 in bank

   While planning for an accounts payable audit, an internal auditor performs an entity-level controls analysis. Which of the following statements is true regarding the approach used by the auditor?

   • AIt enables the auditor to identify the inherent risks to the effective operation of accounts payable process controls.
   • BIt enables the auditor to understand the framework of the activities and associated accounts payable subprocesses.
   • CIt enables the auditor to understand the accounts payable process and its flow, including key steps and systems.
   • DIt enables the auditor to categorize the population of transactions within the accounts payable process.

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   Answer: C

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8. Question 408 · 475 in bank

   An internal auditor was assigned to review controls in the accounts payable function. Most of the accounts payable processes are performed by a third-party service provider. The auditor included in the audit report a number of control deficiencies involving processes performed by the service provider. The service provider requested a copy of the report. Which of the following would be the most appropriate response from the chief audit executive (CAE)?

   • AThe CAE would automatically send a copy of the report to the service provider, as many of the findings relate to the area managed by the service provider.
   • BThe CAE may distribute the report to the service provider at no cost, after consulting with legal counsel and the chief compliance officer.
   • CThe CAE may provide a copy of the audit report to the service provider if an agreement is signed and the service provider agrees to reimburse the cost of the audit.
   • DThe CAE should benchmark with other organizations in the industry by consulting with colleagues and distribute the report only if it is an acceptable practice in the industry.

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   Answer: B

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9. Question 409 · 475 in bank

   An engagement work program is of greatest value to audit management when which of the following is true?

   • AThe work program provides more detailed support for the audit report.
   • BThe work program helps determine the required amount of audit resources.
   • CThe work program helps ensure the achievement of the engagement objectives.
   • DThe work program assists the auditor in developing and managing audit tests.

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   Answer: C

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10. Question 410 · 475 in bank

    According to IIA guidance, which of the following actions should the internal auditor take immediately after having considered fraud scenarios and identified and prioritized fraud risks?

    • ADetermine which controls, if any, are in place to mitigate the fraud risks.
    • BFollow established protocols for internal reporting and investigating fraud allegations.
    • CResearch frauds that have occurred in similar organizations.
    • DIncorporate the fraud risk assessment into the engagement plan.

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    Answer: D

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IIA-CIA-PART2 practice, question 401. 475 questions available.