Which of the following statements about assurance maps is correct?

An assurance map is used by the chief audit executive to coordinate assurance activities with other internal and external assurance providers

An assurance map is a picture of all assurance engagements performed by the internal audit activity across the organization

An assurance map is used by the engagement supervisor to coordinate the roles of various internal audit team members assigned to assurance engagements

An assurance map lists the procedures and testing activities performed by an internal audit team during an assurance engagement

Which of the following is most likely to be judged as a significant residual risk that would exceed the organization's acceptable risk level?

Any risk that could cause injuries or pollute the environment

Any risk involving organizational expansion into a new geographical area with an unstable political environment.

Any risk involving investments into bitcoin and suspicious derivatives

Any risk that can cause material or financial loss

Any risk that could cause injuries or pollute the environment

An audit observation noted that annual inventory counts of biofuel was not being performed appropriately Fuel yards were not visited and physical amounts of biofuel were not reconciled with accounting data Management of the division understood the issue and promised to resolve the problem When should the internal auditor schedule a follow-up review?

As soon as possible, no later than two months after the audit

When convenient for both parties

When management has indicated that the issue has been resolved

A chief audit executive (CAE) is trying to balance the internal audit activity's needs for technical audit skills budget efficiency and staff development opportunities. Which of the following would best assist the CAE in achieving this balance1?

Hierarchical organizational structure

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?

To perform an assessment of the effectiveness of process controls

To perform an assessment of the adequacy of process controls.

To perform an assessment of the effectiveness of process controls

To perform a detailed assessment of process risks

To perform an assessment of the sufficiency of residual process risks.

An internal auditor is asked to review a recently completed renovation to a retail outlet. Which of the following would provide the most reliable evidence that the completed work conformed to the plan?

A physical inspection of the retail outlet.

An interview with the employee who performed the work

An analysis of purchasing and receiving documentation

Existence of a signed completion document accepting the work

A physical inspection of the retail outlet.

The chief audit executive can illustrate the value of the internal audit activity by reporting which of the following to the board?

The overall performance resulting from the internal audit balanced scorecard

The number of outstanding and overdue management actions

The experience of the organization's internal auditors

The number of audits in the annual audit plan relative to similar organizations

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?

Valid closure requires evidence that ensures the corrected process will function as expected in the future

Valid closure requires the client lo address not only the condition, but also the cause of the condition

Valid closure of an observation ensures it will be included in the final engagement report

Valid closure requires assurance from management that the original problem will not recur in the future

Which of the following situations is most critical for the chief audit executive to report to the board?

The chief audit executive disagreed with the business unit manager's initial decision to accept a particular risk Management ultimately agreed to address the risk only after discussing the issue with senior management.

The internal audit activity was restructured, which resulted in a significant change in responsibilities among audit managers and supervisors for some audits

A staff internal auditor had difficulties completing a portion of the audit because management of the area under review was unwilling to cooperate and provide information timely.

The resignation of an internal audit manager during the year caused the chief audit executive to defer a number of audit engagements to the following year.

Which of the following statements regarding the risk management process' support of the internal audit activity is true?

The risk management process supports internal audit by evaluating whether critical controls are adequate and effective.

The risk management process can provide more extensive internal audit services to the organization if it does not have an internal audit department

The risk management process supports internal audit by evaluating whether critical controls are adequate and effective.

The risk management process can determine whether all significant risks have been identified and are being treated.

The risk management process establishes an organization-specific documented risk management framework.

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?

Perform data analytics on the supplier's information, invoiced amounts, and payments performed

Switch the existing assurance engagement into a fraud investigation engagement

Extend the audit scope and perform additional testing of controls on other related areas

Review the poor year's transaction volume and amounts paid compared to the poor year's budget

Perform data analytics on the supplier's information, invoiced amounts, and payments performed

According to HA guidance, the chief audit executive is directly responsible for which of the following?

Establishing the objectives scope and plan for each engagement

Maintaining a quality assurance program even in the absence of management support

Periodically reviewing and approving the internal audit charier

Providing opportunities for all staff auditors to satisfy their professional development requirements

Establishing the objectives scope and plan for each engagement

A corporate merger decision prompts the chief audit executive (CAE) lo 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''

Communicate with the CEO and present the revised audit plan to the board for approval.

Present the revised audit plan directly to the board for approval.

Communicate with the chief financial officer and present the revised audit plan to the CEO tor approval

Present the revised audit plan directly to the CEO for approval

Communicate with the CEO and present the revised audit plan to the board for approval.

Which of the following is the primary reason for internal auditors to conduct interim communications with management of the area under review?

To provide timely discussion of results

To demonstrate good project oversight

To provide timely discussion of results

To demonstrate internal auditor proficiency

To follow up on previously requested information

Which of the following sampling techniques is typically used when an internal auditor wants to test a large sample for fraud?

Probability-proportional-to-size sampling

Which of the following describes (he primary reason why a preliminary risk assessment is conducted during engagement planning?

To ensure that significant risks are included in the engagement scope

To identify the greatest risks organizationwide

To ensure that the engagement work program covers all risk areas

To ensure that risks identified during previous audits of the area have been adequately addressed

To ensure that significant risks are included in the engagement scope

Senior management requested that the internal audit activity perform a consulting project to assist in making a decision on a new software system. Which of the following would be used to determine the engagement objectives?

An understanding of the engagement client's expectations

An assessment of risks to the business objectives

An understanding of the engagement client's expectations

The probability of significant errors fraud or noncompliance

Criteria previously established by the board

Which of the following is true about surveys?

A survey with closed-ended questions can produce quantifiable evidence

A survey with open-ended questions is weaker than a structured interview

A survey with closed-ended questions can produce quantifiable evidence

A survey's participants are likely to volunteer information that was not specifically requested

A survey, like inspections and confirmations are best used to test the operating effectiveness of controls

During a consulting engagement an internal auditor wants to determine whether all principal stakeholders are involved in a project. Which tool should the auditor use?

RACI (responsible, accountable, consult and inform) chart

SWOT{strengths. weaknesses opportunities, and threats) analysis

During the filework phase of an assurance engagement the internal auditor decides that she wants to adjust the audit work program. Which of the following is the most appropriate next step for the auditor to take9

Obtain approval from the engagement supervisor

Request additional information needed from management of the area under review.

Obtain approval from the engagement supervisor

Obtain the required resources, including IT. to complete the work

Discuss the change in scope with management of the area under review.

Which of the following should management action plans include at a minimum?

An implementer for the action plan

The internal auditor's next review date of the action plan

Detailed procedures for the action plan

An internal auditor completed a review of expenses related to the launch of a new project. The auditor sampled 45 transactions approved by a senior project manager and identified 30 with questionable vendor documentation. Which of the following is the most appropriate conclusion for the auditor to include in the audit report?

The organization had weaknesses in its review process which allowed questionable transactions with some vendors

The organization incurred excessive cost overruns that resulted in significant financial and legal risk to the project.

The organization experienced a potential conflict of interest

The organization had weaknesses in its review process which allowed questionable transactions with some vendors

The organization allowed the project to launch without assurance that all transactions were regularly approved

An organization s inventory is stored m multiple warehouses. During an inventory audit which of the following activities would most benefit from the use of computerized audit tools?

Valuating the obsolete Inventory from all the warehouse locations

Verifying the existence of inventory items in each warehouse

Assigning the tolerable deviation rate to determine the sample size

Valuating the obsolete Inventory from all the warehouse locations

Confirming that the purchased items are recorded In the correct period

An organization's finance manager plans to implement a state-of-the-art management system to better manage the organization's receivables. The finance manager consulted the chief audit executive (CAE) and asked for her assistance in determining whether the organization is able to accommodate this system. How would the CAE proceed to determine the objectives of this engagement

Discuss the concerns with the finance manager and work together to agree on the engagement objectives

Ask the CEO to determine the scope and objectives of the engagement

Request that the board disclose its concerns over governance for inclusion in the engagement

Discuss the concerns with the finance manager and work together to agree on the engagement objectives

Review previous audit reports from the area and develop engagement objectives to address the area's key risks and controls

Which of the following is a primary reason for an internal auditor to use a risk and control questionnaire when auditing financial processes?

To gam an understanding of the control environment

To collect as much financial data as possible before engagement fieldwork begins.

To test the effectiveness of financial controls in an efficient and relatively inexpensive way

To facilitate the quantification of financial data obtained

Which of the following statements is true regarding engagement planning?

For a consulting engagement, planning typically occurs after the engagement objectives and scope have already been determined

The engagement objectives are the boundaries for the engagement, which outline what will be included in the review

The risk-based objectives of the engagement can be determined once the scope of the engagement has been formed

For a consulting engagement, planning typically occurs after the engagement objectives and scope have already been determined

For an assurance engagement, once the scope is established and testing has begun, the scope cannot be modified.

IIA IIA-CIA-Part2 Practice Test 4 - Free Online Exam Prep & Questions

Which of the following should be the focus of the effect section of the preliminary observations document?

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