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Home IIA IIA-CIA-Part2

IIA IIA-CIA-Part2 Exam Practice Questions (P. 5)

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Question #41
Which of the following is true of engagement recommendations?
I. Specific suggestions for implementation must be included.
II. The internal auditor's observations and conclusions may serve as the basis.
III. Actions to correct existing conditions or improve operations may be included.
IV. Approaches to correcting or enhancing performance may be suggested.
  1. A
    I only
  2. B
    III only
  3. C
    I, III, and IV only
  4. D
    II, III, and IV only

Correct Answer:
D

Question #42
Which of the following performance criteria would be most useful when measuring the performance of a customer service desk?
  1. A
    The number of customer inquiries recorded per day.
  2. B
    The percentage of customer issues resolved within 24 hours.
  3. C
    The number of customer complaints recorded per day.
  4. D
    The percentage of total customers served per day.

Correct Answer:
B

Question #43
The efficiency of internal audit operations is best enhanced if workpaper standards:
  1. A
    Permit the extent of documentation to vary according to engagement objectives.
  2. B
    Require supervisors to initial and date each workpaper that they review.
  3. C
    Allow access to workpapers by external parties if approved by senior management or the audit committee.
  4. D
    Mandate the workpaper retention period.

Correct Answer:
A

Question #44
According to the International Professional Practices Framework, which of the following statements is correct regarding the communication of audit results?
I. Summary reports may be issued separately from or in conjunction with the final report.
II. Interim reports may be written or oral.
III. Detailed reports should always be issued to the audit committee.
IV. Interim reports should be used to communicate information which requires immediate attention.
  1. A
    I and III only
  2. B
    II and IV only
  3. C
    I, II, and IV only
  4. D
    I, II, III, and IV.

Correct Answer:
C

Question #45
The chief audit executive (CAE) determined that based on management's oral response, the action taken regarding an audit observation was sufficient when weighted against the relative importance of the audit recommendation. Which of the following is the most appropriate step for the internal auditor to take next?
  1. A
    Initiate a follow-up audit to ensure that action has really been taken.
  2. B
    Follow-up with management until a written response is obtained.
  3. C
    Escalate the issue to the board and get their position on the issue.
  4. D
    Note in the permanent file that follow-up needs to be performed as part of the next engagement.

Correct Answer:
D

Question #46
Which of the following will be an appropriate course of action when an auditor disagrees with a client about a well-documented audit finding?
  1. A
    Include both the audit finding and the client's position in the audit report.
  2. B
    Defer reporting the item and plan to perform more detailed work during the next audit.
  3. C
    Change the finding so that it is acceptable to the client.
  4. D
    Address the issue with senior management and the board for resolution prior to issuing the final report.

Correct Answer:
A

Question #47
A governmental auditor was assigned to determine reasons why the students in one region scored significantly higher on education evaluation tests than did the students in another region. Previous research showed that there is a direct correlation between public financial support and student results. Which of the following is most likely to explain the difference in the regional results?
  1. A
    The more successful region spends 30 percent more money on education than does the other region.
  2. B
    A higher percentage of the general tax fund is spent on education in the more successful region than in the other region.
  3. C
    The more successful region spends more money per student on education than does the other region.
  4. D
    The more successful region has increased educational spending by an average of 10 percent each year for the last three years, whereas the other region's

Correct Answer:
C

Question #48
Which of the following would constitute a violation of the IIA Code of Ethics?
  1. A
    An internal auditor, who has recently joined the organization, has accepted an assignment to audit the electronics manufacturing division. The auditor previously served as senior auditor for the external audit of that division and has audited many electronics companies during the past two years.
  2. B
    An internal auditor has accepted an assignment to audit the warehousing function six months from now. The auditor has no expertise in that area but has signed up for courses in warehousing that will be completed before the assignment begins.
  3. C
    An internal auditor has no ambitions for promotion and has not engaged in training or other professional development activities during the last three years. The auditor's performance assessments indicate consistent quality of work.
  4. D
    An internal auditor discovered an internal financial fraud during the year, and the financial statements were adjusted to properly reflect the loss associated with

Correct Answer:
C

Question #49
An auditor decides to perform an inventory turnover analysis for both raw materials inventory and finished goods inventory. The analysis would be potentially useful in:
I. Identifying products for which management has not been attuned to changes in market demand.
II. Identifying potential problems in purchasing activities.
III. Identifying obsolete inventory.
  1. A
    III only
  2. B
    I and II only
  3. C
    II and III only
  4. D
    I, II, and III

Correct Answer:
D

Question #50
An internal auditor provided the following statement about division A's performance during the month: "Because supplies of raw material X were scarce, division
A's profits declined by 15 percent."
Which of the following can be validly concluded from the auditor's statement?
I. Division A's production level declined by 15 percent.
II. Division A could have sold more products than it produced.
III. Division A usually sells all of the products that it produces.
  1. A
    I only
  2. B
    II only
  3. C
    III only
  4. D
    I and II only

Correct Answer:
B

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