[Free] Download New Updated (October 2016) IIA IIA-CIA-Part2 Real Exam 221-230

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QUESTION 221

The internal auditor’s opinion in terms of due professional care should be:

 

A.

Limited to the effectiveness of internal controls.

B.

Expressed only when consensus with top management has been achieved.

C.

Based on experience and free of all bias.

D.

Based on sufficient factual evidence.

 

Correct Answer: D

 

 

QUESTION 222

Whic
h of the following would be the least desirable criteria against which to judge current operations of an organization’s treasury function?

 

A.

The operations of the treasury function as documented during the last audit engagement.

B.

Company policies and procedures delegating authority and assigning responsibilities.

C.

Finance textbook illustrations of generally accepted good treasury function practices.

D.

Codification of best practices of the treasury function in relevant industries.

 

Correct Answer: A

 

 

QUESTION 223

Inadequate risk assessment would have the strongest negative impact in which of the following phases of an audit engagement?

 

A.

Determining the scope.

B.

Reviewing internal controls.

C.

Testing.

D.

Evaluating findings.

 

Correct Answer: A

 

 

 

QUESTION 224

After becoming aware of control weaknesses indicating that a fraud could have been committed, which of the following actions should an internal auditor take next?

 

A.

Issue a written report identifying the control weaknesses.

B.

Perform tests directed toward the identification of other fraud indicators.

C.

Notify external auditors of the suspicion that fraud has been committed.

D.

Recommend that a fraud investigation be conducted involving internal auditors, lawyers, investigators, security personnel, and other specialists, as appropriate.

 

Correct Answer: B

 

 

QUESTION 225

The chief audit executive (CAE) of a multinational entity with highly automated and complex operations has just completed the update of the risk-based audit plan. Interviews with management revealed the introduction of new technology and a significant increase in both the number and severity of technology-based risk exposures. According to the International Professional Practices Framework, which of the following would be the best course of action for the CAE to undertake next?

 

A.

Develop a detailed audit plan that makes the most efficient use and reallocation of existing internal audit resources.

B.

Arrange for the outsourcing of some technology intensive audit processes and procedures based on the plan changes.

C.

Evaluate whether appropriate skills and knowledge required to perform the necessary audit work currently exist in the department.

D.

Begin planning to recruit information technology audit specialists and other expert personnel into the internal audit activity.

 

Correct Answer: C

 

 

QUESTION 226

According to IIA guidance, which of the following should be considered when creating policies and procedures for the internal audit activity (IAA)?

 

A.

Number of auditors, complexity of audit activities, and structure of the IAA.

B.

Number of auditors, complexity of audit activities, and audit staff skills and competencies.

C.

Number of auditors, structure of the IAA, and audit staff skills and competencies.

D.

Complexity of audit activities, structure of the IAA, and audit staff skills and competencies.

 

Correct Answer: A

 

 

QUESTION 227

The best method for assessing the relative importance of risk factors is to:

 

A.

Change the rating of the factors from a 1-3 scale to a 1-5 scale.

B.

Assign weights to the factors based on the comparative impact.

C.

List the risk factors in a priority order.

D.

Use data from an independent source.

 

Correct Answer: B

 

 

QUESTION 228

A chief audit executive (CAE) is evaluating four potential audit engagements based on the following factors: the engagement’s ability to reduce risk to the organization, the engagement’s ability to save the organization money, and the extent of change in the area since the last engagement. The CAE has scored the engagements for each factor from low to high, assigned points, and calculated an overall ranking. The results are shown below with the points in parentheses:

 

Risk Reduction

 

Cost Savings

 

Changes

 

High (3)

 

Medium (2)

 

Low (1)

 

High (3)

 

Low (1)

 

High (3)

 

Low (1)

 

High (3)

 

Medium (2)

 

Medium (2)

 

Medium (2)

 

High (3)

 

If the organization has asked the CAE to consider the cost savings factor to be twice as important as any other factor, which engagements should the CAE pursue?

 

A.

1 and 2 only

B.

1 and 3 only

C.

2 and 4 only

D.

3 and 4 only

 

Correct Answer: D

 

 

 

 

 

QUESTION 229

An internal audit manager is supervising an engagement. A senior auditor deviates from the approved engagement plan but meets all deadlines in the approved time schedule. Which activity is not required for the audit manager to provide proper engagement supervision?

 

A.

Actively participate in audit procedures.

B.

Ensure that all engagement objectives are met.

C.

Approve the deviation from the engagement plan.

D.

Ensure compliance with the time schedule.

 

Correct Answer: A

 

 

QUESTION 230

A bank uses a risk analysis matrix to quantify the relative risk of auditable entities. The analysis involves rating auditable entities on risk factors using a scale of 1 to 10, with 10 representing the greatest risk. A partial list of risk factors and the ratings given to three of the bank’s departments is provided below:

 

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Which of the following statements regarding risk in the department is true?

 

A.

As compared to departments A and C, department B has a stronger control system to compensate for the greater complexity of the department’s transactions and dollar value of its assets.

B.

The internal audit activity should schedule audits of department B more often than audits of department C because of the relative control strength of department C as compared to department B.

C.

The nature of department A’s control structure may be justified by the nature of the department’s assets and the complexity of its transactions.

D.

The relative ranking of the departments in order of their risk, from greatest to least risk, is: A; C; B.

 

Correct Answer: C

 

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