IIA IIA-CIA-Part2 Practice Test - Questions Answers, Page 9

When developing the scope of an audit engagement, the internal auditor typically considers factors that directly impact the audit's objectives, risks, and execution. This includes the potential impact of key risks (Option B), the expected outcomes and deliverables (Option C), and the operational and geographic boundaries (Option D). While the need and availability of automated support (Option A) may be a practical consideration for how the audit is conducted, it is not fundamental to defining the scope of the audit engagement itself. The scope is primarily concerned with what is to be audited and why, rather than how the audit will be performed.

Reference:

IIA Standard 2200: Engagement Planning.

IIA Practice Guide on Audit Engagement Planning.

A finding can be removed from the final audit report if management provides additional information that accurately contradicts the initial findings. This indicates that the initial findings may have been based on incomplete or incorrect information. Disagreements (Option A) or beliefs about the insignificance (Option D) of the finding do not justify removal unless they are supported by new, contradicting evidence. Even if corrective actions are already taken (Option B), the original finding may still be relevant for documentation and historical context.

Reference:

IIA Standard 2410: Criteria for Communicating.

IIA Practice Guide on Communicating Results.

Enhancing stakeholders' perception of the value added by the internal audit activity (IAA) involves demonstrating strong relationships with audit clients (Option 3) and participating in project teams and task forces in an advisory capacity (Option 4). These activities show the IAA's active involvement in the organization's operations and its commitment to adding value beyond traditional auditing roles. While the use of computer-assisted audit techniques (Option 1) and a consistent risk-based approach (Option 2) are important, they are more related to internal audit efficiency and effectiveness rather than directly enhancing stakeholder perception of value.

Reference:

IIA Practice Guide on Demonstrating Value.

IIA Standard 2100: Nature of Work.

According to IIA guidance, curiosity is a key attribute that indicates a candidate's ability to probe further when reviewing incidents that have the appearance of misbehavior. Curiosity drives the auditor to ask deeper questions, seek out underlying causes, and thoroughly investigate anomalies. While integrity (Option A), flexibility (Option B), and initiative (Option C) are important qualities for an internal auditor, curiosity specifically relates to the propensity to investigate and uncover the truth behind incidents.

Reference:

IIA Standard 1200: Proficiency and Due Professional Care.

IIA Practice Guide on Competency Framework for Internal Auditing.

According to the IIA guidance, reviewing and approving payroll timesheets by the timekeeper before processing is considered least effective in managing the risk of payroll fraud. While this procedure might detect some errors or irregularities, it does not provide a robust control against fraud because the timekeeper can collude with employees or fail to review timesheets adequately. On the other hand, procedures such as comparing payroll lists to personnel records, deactivating payroll database access upon termination, and validating changes to payroll by the personnel department involve checks and balances that are more effective at preventing or detecting fraudulent activities.

IIA Practice Guide: Managing the Business Risk of Fraud: A Practical Guide

IIA Standards and Guidance: IPPF -- Practice Guide

According to the IIA guidance, the most appropriate next step when discovering a sales manager approving contracts beyond their authorization limit is to communicate the finding to the supervisor of the sales manager through an interim report. This approach ensures that the issue is addressed promptly and management can take immediate corrective actions to prevent further unauthorized activities. Including new contracts under negotiation in the final report would delay action, while reminding the sales manager of their authority limits does not escalate the issue appropriately.

IIA Standards: 2440 - Disseminating Results

IIA Practice Guide: Communicating Audit Results

When an internal auditor finds that the incidents of noncompliance exceed the organization's acceptable tolerance level, this should be included in the final engagement report. In this case, the 8 out of 90 desks found with sensitive information represent an 8.9% noncompliance rate, which exceeds the organization's tolerance limit of 4%. Reporting this observation in the final engagement report ensures that management is informed and can take necessary corrective actions to address the noncompliance.

IIA Standards: 2410 - Criteria for Communicating

IIA Practice Guide: Reporting and Monitoring

The primary reason the chief audit executive should consider the organization's strategic plans when developing the annual audit plan is that strategic plans reflect the organization's business objectives and overall attitude toward risk. Understanding the strategic direction of the organization helps the internal audit function align its activities with the key risks and objectives, ensuring that the audit plan is relevant and adds value to the organization by focusing on areas that could impact the achievement of strategic goals.

IIA Standards: 2010 - Planning

IIA Practice Guide: Developing the Internal Audit Strategic Plan

The role of the CAE includes ensuring that all significant risks, including those related to health and safety, are properly managed. Even though the chief health and safety officer reports directly to the CEO, the CAE should still coordinate with and review the work of this officer to understand and evaluate the management of health and safety risks. This helps ensure a comprehensive risk management approach within the organization and supports the overall assurance framework. It is not appropriate for the CAE to have no role (Option A), report directly to the regulator (Option C), or hire an external specialist annually without internal coordination (Option D).

Reference:

IIA Standard 2010: Planning.

IIA Practice Guide on Coordinating Risk Management and Assurance.