[Free] Download New Updated (October 2016) IIA IIA-CIA-Part2 Real Exam 301-310

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QUESTION 301

The chief executive officer has requested that the chief audit executive (CAE) coordinate the establishment of an enterprise risk management (ERM) program for the organization. Which of the following would be the most appropriate action for the CAE?

 

A.

Accept the request as the role of coordinating ERM is a core function of internal audit.

B.

Decline the request as this role compromises the CAE’s objectivity.

C.

Accept the request after consulting with the board and adhering to proper safeguards.

D.

Decline the request as internal audit has limited knowledge and experience of risk at the enterprise level to undertake the assignment.

 

Correct Answer: C

 

 

QUESTION 302

According to IIA guidance, which of the following is the least appropriate role for the internal audit activity in the organization’s risk management program?

 

A.

Conducting full investigations of suspected fraud.

B.

Monitoring the organization’s whistle-blower hotline.

C.

Assessing the risk of fraudulent activity in the organization.

D.

Providing ethics training sessions to organization staff.

 

Correct Answer: C

 

 

QUESTION 303

Which of the following conditions should a chief audit executive take into account when deciding if a follow-up audit engagement is necessary?

 

1. The reported observations were significant and high risk.

2. Internal audit resources and the time it will require for follow-up.

 

3. Management may not have the resources to take action.

 

4. Management has previously decided not to take any action.

 

A.

1, 2, and 3 only

B.

1, 2, and 4 only

C.

1, 3, and 4 only

D.

2, 3, and 4 only

 

Correct Answer: B

 

 

QUESTION 304

In addition to the internal auditor, which of the following parties should be present at an exit or closing conference?

 

1. Audit committee members.

 

2. The external auditor.

 

3. The management responsible for the areas covered by the engagement.

 

4. The chief executive officer.

 

A.

2 only

B.

3 only

C.

3 and 4 only

D.

1, 3, and 4 only

 

Correct Answer: B

 

 

QUESTION 305

Ordinarily, which of the following would not be an objective of an internal audit quality assurance review?

 

A.

Ensuring that the internal audit activity meets the external auditor’s expectations.

B.

Ensuring that the internal audit activity has an audit charter approved by the board of directors.

C.

Complying with specific standards for the professional practice of internal auditing.

D.

Ensuring the adequacy of the goals, mission and vision of the internal audit activity.

 

Correct Answer: A

 

 

QUESTION 306

Which of the following would be a legitimate action for the internal auditor to take when monitoring audit engagement results?

 

1. Disregard a certain risk because management and the board accepted the risk in the past.

 

2. Abdicate the responsibility for a particular risk because it is not part of the audit plan.

 

3. Obtain agreement from senior management that unresolved audit issues will be reported to the board. Request corrective action from management in writing.

 

A.

1 and 3 only

B.

2 and 3 only

C.

3 and 4 only

D.

1, 2, and 4 only

 

Correct Answer: C

 

 

QUESTION 307

A manufacturing organization is considering a merger with a similar firm, and requests that the chief audit executive (CAE) perform a due diligence audit. During the preliminary survey, the CAE notes that inventory management is a high risk area. In consultation with the external auditors and legal advisors, the CAE learns that they share those concerns. Which of the following is the CAE’s best course of action?

 

A.

Perform an independent audit of the merging firm’s inventory management practices to verify the concerns and to provide relevant and reliable results to management for their consideration and action.

B.

Advise management that internal audit, external audit, and legal advisors all have concerns about inventory management and, given the high materiality of inventory, management should no
t proceed with the merger.

C.

Coordinate a review of inventory management with external auditors and legal advisors and ensure each group focuses on their area of expertise to ascertain the extent of the problems, if any.

D.

Coordinate with the merging firm’s internal audit department to better understand the inventory management function and whether the concerns are well-founded.

 

Correct Answer: C

 

 

QUESTION 308

Which of the following would most likely include recommendations for process improvements?

 

1. Due diligence engagement.

 

2. Forensic investigation.

 

3. Internal audit engagement.

 

4. Consulting engagement.

 

A.

1, 2, and 3 only

B.

1, 2, and 4 only

C.

1, 3, and 4 only

D.

2, 3, and 4 only

 

Correct Answer: D

 

 

 

 

QUESTION 309

Which of the following documents should the chief audit executive review and approve?

 

1. Workpaper retention policy.

 

2. Audit committee meeting minutes.

 

3. Internal audit handbook.

 

4. Quarterly financial statements.

 

A.

1 and 2 only

B.

1 and 3 only

C.

2 and 4 only

D.

1, 3, and 4 only

 

Correct Answer: B

 

 

QUESTION 310

Which of the following statements is true?

 

A.

Consulting engagements provide the internal audit activity with flexibility to add value and do not need to be included in the long-range audit plan.

B.

The internal audit activity’s plan of engagments must be based on a formal quantitative risk assessment.

C.

The chief audit executive should consider changes to the long-range audit plan based on the requests of business unit managers.

D.

A risk assessment on which to base the internal audit activity’s long-range plan must be undertaken at least once every three years.

 

Correct Answer: C

 

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