Free Certified Internal Auditor – Part 2, Conducting the Internal Audit Engagement Exam IIA-CIA-Part2 Exam Practice Test

Which of the following would be the most helpful to a chief audit executive when developing a talent management strategy?

• Gap analysis
• Staff preferences
• Maturity analysis
• Extent of external audit coverage

Which of the following would present the most critical external risk to an organization?

• The organization experiences a merger, and the management team is reorganized and redistributed globally
• The organization launches a product into new global markets
• After minimal testing, the organization implements a new system to replace a legacy system
• Regulators announce broad legislative reforms applicable to the industry within which the organization operates

Due to a recent system upgrade, an audit is planned to test the payroll process. Which of the following audit objectives would be most important to prevent fraud?

• Verify that amounts are correct.
• Verify that payments are on time.
• Verify that recipients are valid employees.
• Verify that benefits deductions are accurate.

An organization's internal audit plan includes a recurring assurance review of the human resources (HR) department. Which of the following statements is true regarding preliminary communication between the auditor in charge (AIC) and the HR department?1. The AIC should notify HR management when the draft audit plan is being developed, as a courtesy.2. The AIC should notify HR management before the planning stage begins.3. The AIC should schedule formal status meetings with HR management at the start of the engagement.4. The AIC should finalize the scope of the engagement before communicating with HR management.

• 1 and 3
• 1 and 4
• 2 and 3
• 2 and 4

Which of the following best describes the manual audit procedure known as vouching?

• Testing the validity of information by following it backward to a previously prepared record
• Testing the accuracy of the control by reperforming the task or process required
• Soliciting and obtaining written verification of the accuracy from an independent third party
• Testing the completeness of information forward from a record to a subsequently prepared document

An audit client responded to recommendations from a recent consulting engagement. The client indicated that several recommended process improvements would not be implemented. Which of the following actions should the internal audit activity take in response?

• Escalate the unresolved issues to the board, because they could pose significant risk exposures to the organization.
• Confirm the decision with management and document this decision in the audit file.
• Document the issue in the audit file and follow up until the issues are resolved.
• Initiate an assurance engagement on the unresolved issues.

According to IIA guidance, which of the following accurately describes the responsibilities of the chief audit executive with respect to the final audit report?1. Coordinate post-engagement conferences to discuss the final audit report with management.2. Include management's responses in the final audit report.3. Review and approve the final audit report.4. Determine who will receive the final audit report.

• 1 and 2
• 1 and 4
• 2 and 3
• 3 and 4

During an audit of the accounts receivable (AR) process, an internal auditor noted that reconciliations are still not performed regularly by the AR staff, a recommendation that was made following a previous audit. Monitoring by the financial reporting function has failed to detect the shortcoming. Both the financial reporting function and AR report to the controller, who is responsible for implementing action plans. Which of the following supports the internal auditor's decision to combine both observations into one reported finding?

• The observation was made during the same audit, and the action plan has a common owner.
• The observation relates to the same control activity within a common process.
• The observation has a common control, and it was noted in a prior audit.
• The observation has a common process, and the action plan for the observation has a common owner.

An internal auditor submitted a report containing recommendations for management to enhance internal controls related to investments. To follow up, which of the following is the most appropriate action for the internal auditor to take?

• Observe corrective measures.
• Seek a management assurance declaration.
• Follow up during the next scheduled audit.
• Conduct appropriate testing to verify management responses.

Which of the following is the most appropriate approach for the internal audit activity to follow up on management action plans?

• Create a tracking system for follow up
• Ensure that follow-up activities are performed at least weekly.
• Delegate follow-up activities to qualified administrative staff within the business unit
• Ensure that follow-up activities are performed by the most senior auditor on staff