Guide (New 2026) Actual IIA IIA-CIA-Part2 Exam Questions
IIA-CIA-Part2 Exam Dumps Pass with Updated 2026 Certified Exam Questions
NEW QUESTION # 288
Which of the following is a red flag associated with improper asset valuation?
- A. Allowance for bad debts that is increasing in percentage terms.
- B. Unusual increase in gross margin.
- C. Unusual decrease in the number of days' purchases in inventory.
- D. Recurring positive cash flows from operations.
Answer: B
NEW QUESTION # 289
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. Cost mischarging.
- B. Fictitious vendor.
- C. Defective pricing.
- D. Bid rotation.
Answer: A
NEW QUESTION # 290
An internal auditor has been assigned to perform a quality audit on a manufacturing plant. Which course of action should the auditor perform first?
- A. Review the levels of scrap and rework.
- B. Ascertain the costs of materials purchased.
- C. Compare the planned outputs with the actual outputs.
- D. Evaluate the plant's ability to meet production quotas.
Answer: A
NEW QUESTION # 291
Which of the following is not a primary reason for outsourcing a portion of the internal audit activity?
- A. To gain access to a wider variety of skills, competencies and best practices.
- B. To provide the organization with appropriate contingency planning for the internal audit function.
- C. To complement existing expertise with a required skill and competency for a particular audit engagement.
- D. To focus on and strengthen core audit competencies.
Answer: B
NEW QUESTION # 292
Which of the following is one of the five attributes that internal auditors include when documenting a deficiency?
- A. The criteria used to make the evaluation
- B. The scope of work performed during the engagement
- C. The methodology used to analyze data
- D. The proposed follow-up engagement work to be performed
Answer: A
Explanation:
One of the five attributes that internal auditors include when documenting a deficiency is the criteria used to make the evaluation. The criteria represent the standards, measures, or expectations used in the evaluation process. Documenting the criteria is essential as it provides a benchmark against which the actual conditions can be compared, thereby helping to identify and explain deficiencies in controls or processes.
The Institute of Internal Auditors (IIA) Standard 2410 - Criteria for Communicating: "Final communication of engagement results must, where appropriate, contain the internal auditors' overall opinion and/or conclusions, as well as the criteria used for evaluation." IIA Practice Guide on "Documenting Internal Audit Observations"
NEW QUESTION # 293
Risk assessments can vary in format, but generally include:
1.A description of identified risks.
2.Tests of audit controls.
3.A system of rating risks.
4.Sample size identification.
- A. 1 and 3 only
- B. 1 and 2 only
- C. 2, 3, and 4 only
- D. 1, 3, and 4 only
Answer: A
NEW QUESTION # 294
When constructing a staffing schedule for the internal audit activity (IAA), which of the following criteria are most important for the chief audit executive to consider for the effective use of audit resources?
1. The competency and qualifications of the audit staff for specific assignments.
2. The effectiveness of IAA staff performance measures.
3. The number of training hours received by staff auditors compared to the budget.
4. The geographical dispersion of audit staff across the organization.
- A. 1 and 4
- B. 2 and 4
- C. 1 and 3
- D. 2 and 3
Answer: A
Explanation:
Section: Volume E
NEW QUESTION # 295
Information gathered in a forensic investigation of business fraud is usually gathered with which of the following standards in mind?
- A. Legal evidence.
- B. Generally Accepted Accounting Principles.
- C. The International Professional Practices Framework.
- D. Generally Accepted Auditing Standards.
Answer: A
NEW QUESTION # 296
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. Decline the request as this role compromises the CAE's objectivity.
- B. Decline the request as internal audit has limited knowledge and experience of risk at the enterprise level to undertake the assignment.
- C. Accept the request as the role of coordinating ERM is a core function of internal audit.
- D. Accept the request after consulting with the board and adhering to proper safeguards.
Answer: D
NEW QUESTION # 297
During an audit of suspense accounts the internal auditor found that there were no written policies on how suspense accounts should be treated. The auditor also found that suspense account balances were cleared once per week, not daily. Which of the following is the most appropriate first response by the auditor?
- A. The auditor should conclude that suspense accounts were not being cleared on a timely basis because they should be cleared daily
- B. The auditor should conclude that the clearing of suspense accounts was timely and appropriate because weekly clearing is sufficient.
- C. The auditor should rely on his professional judgment and experience to develop criteria for evaluating the existing controls over suspense accounts
- D. The auditor should ask management whether any undocumented policies exist and. if so, determine whether they are adequate
Answer: D
Explanation:
When an internal auditor finds that there are no written policies regarding the treatment of suspense accounts, the most appropriate first response is to inquire with management about any undocumented policies or procedures that may be in place. This approach helps the auditor understand the existing practices and assess their adequacy. Jumping to conclusions without this understanding could lead to inaccurate audit findings.
Ensuring that the auditor comprehensively understands all relevant practices is crucial before evaluating their effectiveness or making recommendations.
:
IIA Standard 2210: Engagement Objectives
IIA Practice Guide: Auditing the Management of Internal Controls
NEW QUESTION # 298
Which of the following best describes the most important criteria when assigning responsibility for specific tasks required in an audit engagement?
- A. Auditors must be given assignments based primarily upon their years of experience.
- B. All audit team members must have the skills necessary to satisfactorily complete any task that will be required in the audit engagement.
- C. Tasks must be assigned to the audit team member who is most qualified to perform them.
- D. All auditors assigned an audit task must have the knowledge and skills necessary to complete the task satisfactorily.
Answer: D
NEW QUESTION # 299
An auditor-in-charge is preparing her audit team for a consulting engagement at one of the organization's foreign subsidiaries. According to the Standards, which of the following would not be a necessary step prior to beginning the engagement?
- A. Communicate what logistical support will be provided by the subsidiary for the duration of the engagement.
- B. Verify that none of the audit team worked for the foreign subsidiary within the last year to ensure independence.
- C. Agree, in writing, with the subsidiary's senior management regarding the scope of the engagement.
- D. Communicate a time frame as well as a contingency plan in the event the engagement may take longer than expected.
Answer: B
Explanation:
Section: Volume C
NEW QUESTION # 300
Which of the following should be the focus of the effect section of the preliminary observations document?
- A. Residual risk
- B. Control activities
- C. Inherent risk
- D. Compensating controls
Answer: A
Explanation:
The focus of the effect section of the preliminary observations document should be on residual risk. Residual risk is the remaining risk after management has taken action to mitigate the inherent risk with controls and other risk responses. Documenting the effect in terms of residual risk helps in understanding the potential impact of the observed issues on the organization if not addressed.
References:
* IIA Standards: 2310 - Identifying Information
* IIA Practice Guide: Communicating the Results of an Audit
NEW QUESTION # 301
Which of the following behaviors could represent a significant ethical risk if exhibited by an organization's board?
1. Intervening during an audit involving ethical wrongdoing.
2. Discussing periodic reports of ethical breaches.
3. Authorizing an investigation of an unsafe product.
4. Negotiating a settlement of an employee claim for personal damages.
- A. 1 and 2
- B. 3 and 4
- C. 1 and 4
- D. 2 and 3
Answer: C
NEW QUESTION # 302
An internal auditor observes a double payment transaction on a supplier invoice during an accounts payable engagement. Which of the following steps would be the most effective in helping the auditor determine whether fraud exists?
- A. Extend the audit scope and perform additional testing of controls on other related areas
- B. Review the poor year's transaction volume and amounts paid compared to the poor year's budget
- C. Perform data analytics on the supplier's information, invoiced amounts, and payments performed
- D. Switch the existing assurance engagement into a fraud investigation engagement
Answer: C
Explanation:
The most effective step in helping the auditor determine whether fraud exists after observing a double payment transaction on a supplier invoice is to perform data analytics on the supplier's information, invoiced amounts, and payments performed. Data analytics allows the auditor to systematically analyze large volumes of transactions to identify patterns, anomalies, and potential fraudulent activities. This approach is more comprehensive and effective in uncovering fraud than simply extending the audit scope or switching to a fraud investigation engagement without a thorough initial analysis.
:
IIA Standards: 1220.A1 - Due Professional Care
IIA Practice Guide: Auditing for Fraud
NEW QUESTION # 303
Which of the following should the chief audit executive do when evaluating the possibility of relying on external auditors' work?
- A. Examine objectivity and any perceived or actual conflicts of interest.
- B. Recalculate all financial calculations to confirm competency.
- C. Review audit tests employed in all previous audits.
- D. Perform comprehensive background checks on all independent auditors on the engagement.
Answer: A
Explanation:
When the chief audit executive (CAE) evaluates the possibility of relying on external auditors' work, the primary focus should be on examining the objectivity and any perceived or actual conflicts of interest that might affect the external auditors' work. Ensuring that the external auditors are objective and free from conflicts is crucial for determining whether their work can be relied upon by the internal audit activity.
Detailed Explanation:
IIA Standard 2050 - Coordination and Reliance:
This standard requires that the internal audit activity coordinates its efforts with external auditors to ensure proper coverage and minimize duplication of efforts. When relying on external auditors, the CAE must assess the external auditors' objectivity and independence.
Objectivity and Conflicts of Interest:
Objectivity refers to the unbiased mental attitude that allows external auditors to perform their work with integrity and impartiality. Conflicts of interest, whether perceived or actual, can compromise this objectivity. The CAE needs to ensure that external auditors are free from any relationships or interests that could affect their judgment.
IIA Practice Advisory 2050-2:
The advisory suggests that the internal audit activity should evaluate the competence, objectivity, and independence of external auditors before relying on their work. A thorough examination of potential conflicts of interest is essential to ensure that the reliance on their work is justified.
Why Not Other Options?
Option A (Perform comprehensive background checks): While background checks may be useful, the primary focus should be on objectivity and conflicts of interest.
Option B (Recalculate all financial calculations): This approach is excessive and unnecessary if the external auditors' work can be relied upon.
Option D (Review audit tests in previous audits): While reviewing previous work is important, it does not address the key issue of objectivity and independence.
Conclusion: Option C is correct because the CAE must focus on ensuring that external auditors are objective and free from conflicts of interest, which is essential for relying on their work, in accordance with IIA standards.
NEW QUESTION # 304
......
IIA-CIA-Part2 (Practice of Internal Auditing) certification exam is an essential step towards becoming a certified internal auditor. IIA-CIA-Part2 exam is designed to test the understanding and knowledge of candidates in the various aspects of internal auditing practices. IIA-CIA-Part2 exam is administered by the Institute of Internal Auditors (IIA) and is one of the three exams necessary to attain the Certified Internal Auditor (CIA) designation.
Pass Guaranteed Quiz 2026 Realistic Verified Free IIA: https://examcertify.passleader.top/IIA/IIA-CIA-Part2-exam-braindumps.html