Online Access Free IIA-CIA-Part2 Practice Test

A manufacturing organization specializes in the production of evaporated milk and breakfast cereals.
The manufacturing processes create significant loss in the form of waste and byproducts. The provision for normal production loss is known to senior management, but little action is taken when abnormal production losses occur. The organization sells its production byproducts to fish farmers at a reduced price. The byproducts are a widely recognized and used product in the fish farming industry. The organization has a policy that also allows its employees to purchase the byproducts at a negligible price.
Based on the above, which of the following risks should the internal audit function consider when planning an engagement of the production process?

• A.Increased misappropriation of finished products.
• B.The production team may work overtime and be overworked.
• C.Risk that the finished product quality may be impaired.
• D.The production team may be incentivized to increase production losses.

Which of the following is an appropriate documentation of proper engagement supervision?

• A.The email exchanges between the audit team and the supervisor.
• B.A supervisor's approval of resources allocated to the engagement
• C.The supervisor's review notes on engagement workpapers.
• D.A completed engagement workpaper review checklist.

Which of the following would most likely prompt special notification from the chief audit executive to same management?

• A.Operational management has decried to weigh an audit issue against the organization's risk tolerance
• B.The controls that management performed to confirm compliance with health and safety standards were not systematically documented
• C.Occurrences of asset misappropriation have been identified as a result of an ineffective operational control design
• D.A controls inaccurate operation has materially impacted the accuracy of the poor year's financial statements

Which of the following statements is true regarding the chief audit executive's (CAT$) responsibilities after completing an assurance or consulting engagement?

• A.The CAE may delegate the responsibility for communicating the results of consulting engagements although this responsibility cannot be delegated for assurance engagements
• B.The CAE must communicate the results of assurance and consulting engagements lo whoever can ensure that the results are given due consideration.
• C.The CAE must establish a follow-up process tor both assurance and consulting engagements to monitor that management actions have been effectively implemented to address observations
• D.The CAE must acknowledge satisfactory performance when communicating the results of assurance and consulting engagements

Which of the following performance measures is considered a lagging indicator to the largest degree?

• A.Return on investment
• B.Employee satisfaction
• C.Cost of research and development
• D.Customer retention