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Many CIA exam candidates have already failed the CIA Part 2 exam and are wondering why they continue to fail. The reason is that they are not prepared enough to pass the exam.
Many people spend too much time reading books and not enough time practicing what they have learned. IIA CIA part 2 exam dumps are a great resource for candidates who are preparing for the exam. They also do not go through enough practice questions which are similar to the ones in the actual IIA CIA Part 2 exam.
Here are some tips on how to prepare for the CIA Part 2 Exam:
Purchase a good set of study materials (like those from SurePassExams) that include practice questions and solutions
Use a mobile app as well as a web simulator (like those offered by SurePassExams) so that you can easily access your study materials anywhere at anytime
Do not spend too much time reading books. Read books only when necessary and then spend more time practicing with practice questions similar to those found in the actual IIA CIA Part 2.
Practice, Practice, Practice! There is no way around this one. The more you practice with questions similar to those found in the actual CIA Exam, the better chance you will have of passing. Remember, “practice makes perfect”.
NEW QUESTION 28
A company used simple regression analysis to analyze maintenance costs against machine hours (MH) for a 26-week period when the plant was in full operation. The regression yielded the following estimated cost function:
Maintenance Cost = $60 + $0.25/MH
The regression analysis also generated a coefficient of determination (R2), or goodness of fit, of 0.85. Which of the following statements regarding this regression analysis is appropriate?
- A. The $0.25 component is the slope coefficient of the cost estimate and represents the average variable maintenance cost per machine hour.
- B. This regression can be used to determine the maintenance cost for any period at any activity level by substituting the machine hours in the equation.
- C. The $60 component represents the best estimate of fixed maintenance costs for the company in a shutdown situation.
- D. The coefficient of determination of R2 = 0.85 indicates that the goodness of fit is poor because the value is close to the maximum value of one.
Answer: A
NEW QUESTION 29
Which of the following actions has the least influence on the chief audit executive's development of an audit plan?
- A. Input from senior management and the board.
- B. An evaluation of the complexity of each audit engagement.
- C. An assessment of risk and exposures affecting the organization.
- D. Changes in the organizations structure or budget.
Answer: B
NEW QUESTION 30
During an audit of a major contract, an auditor finds that actual hours and dollars billed are consistently at or near budgeted amounts. This condition is a red flag for which of the following procurement fraud schemes?
- A. Bid rotation.
- B. Fictitious vendor.
- C. Defective pricing.
- D. Cost mischarging.
Answer: D
NEW QUESTION 31
The balanced scorecard approach differs from traditional performance measurement approaches because it adds which of the following measures?
1. Financial measures.
2. Internal business process measures.
3. Client satisfaction measures.
4. Innovation and learning measures.
- A. III and IV only
- B. II and IV only
- C. I only
- D. II, III, and IV only
Answer: D
NEW QUESTION 32
The chief audit executive (CAE) of a small internal audit activity (IAA) plans to test conformance with the Standards through a quality assurance review. According to the Standards, which of the following are acceptable practice for this review?
1. Use an external service provider.
2. Conduct a self-assessment with independent validation.
3. Arrange for a review by qualified employees outside of the IAA.
4. Arrange for reciprocal peer review with another CAE.
- A. 1, 2, and 3
- B. 1 and 2
- C. 2 and 4
- D. 2, 3, and 4
Answer: B
Explanation:
Section: Volume E
NEW QUESTION 33
In a payroll audit, a staff auditor suspects that signatures on some of the documents being sampled for examination are not authentic. What action should the auditor take before proceeding with the examination?
- A. Suggest to the payroll manager that the suspicious documents should be sent to the organization's security department for forensic review.
- B. Review the suspicious documents with the chief audit executive and seek advice concerning further examination.
- C. Keep the suspicious documents in the workpaper file until the end of the engagement, and then discuss the suspicions with the payroll manager.
- D. Discuss the suspicious documents with payroll staff to seek their views on the authenticity of the signatures.
Answer: B
Explanation:
Section: Volume C
NEW QUESTION 34
An organization's board would like to establish a formal risk management function and has asked the chief audit executive (CAE) to be involved in the process. According to IIA guidance, which of the following roles should the CAE not undertake?
- A. Audit risk management processes.
- B. Become involved in risk oversight committees, monitoring activities, and status reporting.
- C. Accept management's responsibility for risk management without board approval.
- D. Manage and coordinate risk management processes.
Answer: C
NEW QUESTION 35
According to IIA guidance, which of the following is the most appropriate action to be taken by the chief executive (CAE) if management refuses to accept audit recommendations and implement corrective actions, Even after escalation to senior management?
- A. The CAE should ask that additional testing be undertaken to strengthen his case as to the need for corrective action.
- B. The CAE should advise senior management of his intention to escalate the matter to the board.
- C. The CAE should note in the final report that management has decided to accept the risk.
- D. The CAE should continue to meet with management to obtain their agreement for corrective action
Answer: B
NEW QUESTION 36
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?
- A. Verify that amounts are correct.
- B. Verify that recipients are valid employees.
- C. Verify that benefits deductions are accurate.
- D. Verify that payments are on time.
Answer: B
NEW QUESTION 37
An audit department has received anonymous information that an employee has allegedly been able to steal and cash checks sent to the organization by customers. What is the most efficient way for an auditor to determine how this type of fraud could occur and who might be the perpetrator?
- A. Confirm accounts receivable.
- B. Confirm accounts payable.
- C. Flowchart and analyze key controls in the cash receipts process.
- D. Review the endorsements and banks of deposit on customers' canceled checks.
Answer: C
NEW QUESTION 38
According to IIA guidance, when would an interim report typically be produced?
- A. Following management's update tor actions taken on outstanding recommendations.
- B. During lengthy audit engagements involving several organizational units.
- C. During a standard audit engagement when management wants to address an issue before the final report is drafted.
- D. Following each workshop conducted during a consulting engagement.
Answer: B
NEW QUESTION 39
Which of the following would be the most important reason for the chief audit executive (CAE) to use inputs from management strategy to update the audit universe?
- A. The CAE wants to consider the organization's strategic plan including attitude toward risk and the degree of difficulty to achieving planned objectives.
- B. The CAE wants to determine internal audit resourcing requirements to cover the organization's major processes and activities over time.
- C. The audit charter requires the CAE to update the audit universe before embarking on the selection of potential audit engagements.
- D. The CAE wants to cover management planned activities for the upcoming year in the audit plan.
Answer: A
Explanation:
Section: Volume D
NEW QUESTION 40
A bank is developing an integrated customer information system. The type of audit involvement that would most likely help avoid implementation of a system that does not cover all types of accounts would be:
- A. An application control review.
- B. A source code review.
- C. A design review.
- D. An access control review.
Answer: C
NEW QUESTION 41
Which of the following statements is true regarding a drawback of using internal control questionnaires (ICQs)?
- A. ICQs are inadequate to provide effective assurance on how organizational processes are executed in practice.
- B. It is generally difficult for internal auditors to process completed questionnaires, because ICQs frequently elicit detailed comments and long answers from management
- C. When internal auditors need to cover many control procedures using ICQs is generally less efficient than conducting observations and inspections
- D. It is generally difficult for internal auditors lo compile appropriate ICQs for business activities that are governed by standardized operating procedures
Answer: A
NEW QUESTION 42
If management expects 100 percent compliance with a procedure, which of the following sampling approaches would be most appropriate?
- A. Discovery sampling.
- B. Targeted sampling.
- C. Variables sampling.
- D. Attributes sampling.
Answer: A
NEW QUESTION 43
Company A has a formal comprehensive corporate code of ethics while company B does not.
Which of the following statements regarding the existence of the code of ethics in company A can be logically inferred?
I. Company A exhibits a higher standard of ethical behavior than does company B.
II. Company A has established objective criteria by which an employee's actions can be evaluated.
III.
The absence of a formal corporate code of ethics in company B would prevent a successful audit of ethical behavior in that company.
- A. I and II only
- B. II and III only
- C. II only
- D. III only
Answer: C
NEW QUESTION 44
Which of the following tasks would be considered unusual for planning a control self-assessment workshop?
- A. Identifying key stakeholders and ensuring they are represented in the group.
- B. Ensuring that managers are willing to accept constructive criticism.
- C. Securing an external subject matter expert to arbitrate disputes.
- D. Conducting interviews to identify relevant issues for the discussion.
Answer: C
NEW QUESTION 45
The chief audit executive (CAE) notes that management has adopted the option of not taking action on an audit issue involving a sizeable risk which has been accepted in the past. Which would be an appropriate action by the CAE?
- A. Accept management's decision as the same risk has been accepted in the past.
- B. Close the issue by noting that follow-up will be completed as part of the next engagement.
- C. Report the situation to the board for immediate resolution.
- D. Discuss the matter with management to determine a resolution.
Answer: D
Explanation:
Section: Volume D
NEW QUESTION 46
As part of a preliminary survey of the purchasing function, an internal auditor reads the department's policies and procedures manual and concludes that the manual describes the processing steps clearly and contains an appropriate internal control design. The next engagement objective is to evaluate the operating effectiveness of internal controls. Which procedure would fulfill this objective most effectively?
- A. Perform a systems test.
- B. Perform an efficiency test.
- C. Perform a design test.
- D. Perform a compliance test.
Answer: D
Explanation:
Section: Volume C
NEW QUESTION 47
During an audit of a major metropolitan museum, an auditor was unable to locate selected items from the museum's collection. The director of the museum informed the auditor that the upcoming replacement of the museum's inventory tracking system would address the auditor's concerns. What follow-up activity should the auditor propose?
- A. Determine whether the items are indeed missing and assess the ability of the new system to remedy the problem.
- B. Schedule an audit of the museum's security systems to determine if theft is a problem.
- C. Receive periodic feedback from museum staff regarding the status of the system implementation.
- D. Monitor the system implementation and schedule a follow-up review once the new system is in place.
Answer: A
Explanation:
Section: Volume B
Explanation/Reference:
NEW QUESTION 48
A company's policy requires that all customers be treated in a fair and consistent manner. Which of the following audit procedures would provide the most persuasive evidence that the policy was followed?
- A. Compare credit reports with annual sales for a sample of customers.
- B. Compare the sales discounts offered to each customer.
- C. Compare the ratio of outstanding receivables to the authorized credit limit for each customer.
- D. Compare the aging of outstanding receivables due from each customer.
Answer: B
Explanation:
Section: Volume A
NEW QUESTION 49
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:
Which of the following statements regarding risk in the department is true?
- A. The relative ranking of the departments in order of their risk, from greatest to least risk, is: A; C; B.
- B. 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.
- C. 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.
- D. 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.
Answer: B
Explanation:
Section: Volume C
Explanation/Reference:
NEW QUESTION 50
An organization has developed a large database that tracks employees, employee benefits,
payroll deductions, job classifications, and other similar information. The internal auditor reviews the retirement benefits plan and determines that the pension and medical benefits have been changed several times in the past ten years. The auditor wishes to determine whether there is justification to perform further audit investigation. The most appropriate audit procedure would be to:
- A. Use generalized audit software to select a monetary-unit sample of retirement pay, and determine whether each retired employee was paid correctly.
- B. Use generalized audit software to select an attributes sample of retirement pay, and perform detailed testing to determine whether each person chosen was given the proper benefits.
- C. Review reasonableness of retirement pay and medical expenses on a per-person basis stratified by which plan was in effect when the employee retired.
- D. Review the trend of overall retirement expense over the last ten years. If the retirement expense increased, it would indicate the need for further investigation.
Answer: C
NEW QUESTION 51
Given the scarcity of internal audit resources, a chief audit executive (CAE) decides not to schedule a follow-up of audit recommendations when developing engagement work schedules. Why does the CAE's decision violate the Standards?
- A. When resources are scarce, the follow-up can be incorporated into the next engagement.
- B. Lack of resources is not a sufficient reason to forgo a follow-up.
- C. Follow-up actions should take priority over new engagements in scheduling.
- D. It is not the CAE's responsibility to establish a process for a follow-up.
Answer: B
Explanation:
Section: Volume C
NEW QUESTION 52
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