IIA IIA-CIA-Part2 Practice Test - Questions Answers, Page 6

According to IIA Standards, acceptable practices for testing conformance through a quality assurance review include conducting a self-assessment with independent validation (2) and arranging for reciprocal peer review with another CAE (4). These methods provide a cost-effective and practical approach to ensuring compliance with professional standards, especially for small internal audit activities. Using an external service provider (1) and arranging for a review by qualified employees outside of the IAA (3) are also valid, but self-assessment with independent validation and peer review are specifically highlighted for smaller IAAs.

Reference: IIA Standard 1312 -- External Assessments, IIA Practice Guide -- Quality Assurance and Improvement Program

The chief audit executive (CAE) should prioritize risks to be used for the audit plan. Although the CAE is not accountable for managing risks, he is responsible for ensuring that the internal audit activity provides assurance on the effectiveness of the risk management processes. The CAE must understand the organization's risk landscape and determine which areas require audit attention based on their significance and potential impact.

Reference: IIA Standard 2010 -- Planning, IIA Practice Guide -- Coordinating Risk Management and Assurance

When identifying audit resource requirements, the chief audit executive (CAE) should consider approaching an external service provider to conduct internal audits in areas where the organization lacks the necessary skills (2). This ensures that audits are conducted by individuals with the appropriate expertise. Additionally, communicating to senior management a summary report on the status and adequacy of audit resources (4) keeps them informed about the internal audit activity's capacity and any resource constraints. Considering employees from other operational areas as audit resources (1) could compromise objectivity and independence, while suggesting deferral of audits (3) is generally not advisable as it might leave significant risks unaddressed.

Reference: IIA Standard 2030 -- Resource Management, IIA Practice Advisory 2030-1

The most likely reason the chief risk officer (CRO) chose the workshop approach is that it allows workshop participants to learn while contributing ideas toward the objectives. Workshops facilitate an interactive and collaborative environment where participants can share their insights and experiences. This approach helps in generating innovative solutions and fosters a sense of ownership among participants. It also enables participants to gain a better understanding of the issues at hand and the potential improvements that can be made.

Reference: IIA Practice Guide -- Facilitation and Collaboration Techniques, COSO Framework on Risk Management

The primary purpose of financial statement audit engagements is to review financial reports and ensure they comply with generally accepted accounting principles (GAAP). This involves verifying the accuracy and fairness of the financial statements, ensuring they provide a true and fair view of the organization's financial position and performance.

Reference: = IIA Practice Guide: ''Auditing Financial Statements'' and IIA Standard 2110.A1.

When employees continue to violate segregation-of-duty controls despite previous recommendations, the most effective approach is to recommend appropriate awareness training. This training can help employees understand the importance of these controls and how to comply with them, addressing the root cause of the violations.

Reference: = IIA Standard 2130 - Control and IIA Practice Guide: ''Auditing Segregation of Duties''.

The efficiency of an audit is greatly influenced by the adequacy of preliminary survey information. Thorough preliminary surveys help auditors understand the audit scope, identify potential issues early, and plan their work efficiently, thereby increasing overall audit efficiency.

Reference: = IIA Practice Guide: ''Engagement Planning: Establishing Objectives and Scope'' and IIA Standard 2201 - Planning Considerations.

While discussing risks with the audit client can provide useful insights, it is the least structured method compared to using all available information from the risk-based plan, considering client efforts to manage risk, and reviewing prior risk assessments. These latter methods are more systematic and ensure that the audit work program is comprehensive and focused on relevant risks.

Reference: = IIA Standard 2200 - Engagement Planning, IIA Practice Guide: ''Developing the Audit Plan''.

According to IIA guidance, the chief audit executive (CAE) has several appropriate options when the audit objectives are not complete despite the auditor having worked the full amount of budgeted hours. The CAE should determine if the work already completed is sufficient to conclude the engagement (2). The CAE should also provide feedback on areas of improvement for future engagements (3) and give instructions and directions to complete the audit (4). Allowing the auditor to decide whether to extend the audit engagement (1) is not typically an appropriate option as this decision should involve senior management or the CAE to ensure alignment with organizational priorities and resource allocation.

Reference: = IIA Standard 2010 - Planning, IIA Standard 2020 - Communication and Approval, IIA Standard 2040 - Policies and Procedures.