IIA-CIA-PART2 practice questions 451–460

1. Question 451 · 475 in bank

   Management and internal audit are discussing possible solutions to address the organization's insufficient petty cash. Which action would most effectively and efficiently mitigate the risk?

   • AImplement policies to submit a daily petty cash reconciliation to the branch manager's superior and to replenish petty cash when it is 50% depleted.
   • BAnalyze the expenses that are paid using petty cash and increase the limit of the petty cash float to satisfy the expenses.
   • CAppoint a new petty cash custodian for processing cash disbursements.
   • DRequire recording all disbursements in a petty cash log.

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   Answer: B

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2. Question 452 · 475 in bank

   Which of the following statements is true regarding the internal audit activity's reliance on the work of other internal or external assurance providers?

   • AThe internal audit activity should place greater reliance on the work of external assurance providers than that of internal assurance providers.
   • BThe internal audit activity should always complete additional assurance work to supplement the work of external assurance providers.
   • CThe internal audit activity should use an ad hoc process to determine how it will place reliance on the work of others.
   • DThe internal audit activity may place reliance on the work of other assurance providers regardless of whether the other assurance providers are independent.

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   Answer: B

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3. Question 453 · 475 in bank

   Which of the following would best contribute to the success of a guest auditor program that allows people from other areas of the organization to serve as subject matter experts?

   • ASelecting guest auditors whose work has recently been audited by the internal audit activity.
   • BRecommending the guest auditor to design the internal audit program and perform testing procedures.
   • CSoliciting feedback from the guest auditor once the engagement is complete.
   • DEnabling the guest auditor to interact with internal audit staff to identify mutually beneficial opportunities.

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   Answer: D

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4. Question 454 · 475 in bank

   Which of the following statements best applies to audit observations being considered for the final audit report?

   • AReported audit observations require an audit rating
   • BThe board will follow up on the observations separately
   • CReported audit observations are exempt from due dates
   • DReported audit observations should continue to appear on interim reports

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   Answer: D

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5. Question 455 · 475 in bank

   Which of the following is most likely to help the chief audit executive determine whether the level of the risk accepted by operational management exceeds the organization’s risk tolerance level?

   • AA brainstorming session within the internal audit activity.
   • BA review of the organizational risk management philosophy.
   • CA discussion of the issue with senior management.
   • DA reliance on risk registers and results from recent risk assessments.

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   Answer: D

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6. Question 456 · 475 in bank

   Which of the following steps is conducted first in the planning stage of an assurance engagement?

   • AIdentification of the inherent risks of the audited process or project
   • BIdentification of objectives of the audited process or project
   • CIdentification of risk responses applied for the audited project or process
   • DIdentification of the design of controls of the audited process or project

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   Answer: B

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7. Question 457 · 475 in bank

   Upon completing a follow-up audit engagement, the chief audit executive (CAE) noted that management has not implemented any mitigation measures to address the high risks that were reported in the initial audit report. What initial step must the CAE take to address this situation?

   • ACommunicate the issue to senior management.
   • BDiscuss the issue with members of management responsible for the risk area.
   • CReport the situation to the external auditors.
   • DEscalate the issue to the board.

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   Answer: B

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8. Question 458 · 475 in bank

   An internal audit report includes a recommendation to remove inappropriate user access to an IT application. Which of the following does the recommendation represent?

   • AAn agreed action adopted by management.
   • BA condition-based recommendation as an interim solution to correct a current condition.
   • CA cause-based recommendation to prevent inappropriate access being granted again.
   • DA management action plan.

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   Answer: B

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9. Question 459 · 475 in bank

   Below is a flowchart detailing an organization's bank reconciliation process. Which of the following conclusions can be drawn from the flowchart?

   

   • AThere is a conflict in the segregation of duties between preparing bank reconciliations and posting payments to the accounting books.
   • BThere is an appropriate segregation of duties in the treasury department during the bank reconciliation process.
   • CThere is a large workload for the treasury accountant during the bank reconciliation process.
   • DBank statements should be obtained at a higher level, such as through the treasury supervisor.

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   Answer: B

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10. Question 460 · 475 in bank

    Which of the following would be most likely found in an internal audit procedures manual?

    • AA summary of the strategic plan of the area under review.
    • BAppropriate response options for when findings are disputed by management.
    • CAn explanation of the resources needed for each engagement.
    • DThe extent of the auditor's authority to collect data from management.

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    Answer: B

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IIA-CIA-PART2 practice, question 451. 475 questions available.