Free Access IIA.IIA-CIA-Part2.v2022-01-22.q283 Practice Test (Page 44)

Question 211

Persuasive evidence indicates that a member of senior management has been involved in insider trading that would be considered fraudulent. However, the evidence was encountered during an operational audit and is not considered relevant to the audit. Which of the following is the most appropriate action for the chief audit executive to take?

A.Report the evidence to external legal counsel for investigation. Report the legal counsel findings to management.

B.Report the evidence to the chairperson of the audit committee and recommend an investigation.

C.Conduct sufficient audit work to conclude whether fraudulent activity has taken place, then report the findings to the chairperson of the audit committee and to government officials if appropriate action is not taken.

D.Discontinue audit work associated with the insider trading since it is not relevant to the existing audit.

Question 212

The chief audit executive's responsibility regarding control processes includes:

A.Assisting senior management and the audit committee in the development of an annual assessment about internal control.

B.Overseeing the establishment of internal control processes.

C.Maintaining the organization's governance processes.

D.Ensuring that the internal audit activity assesses all control processes annually.

Question 213

According to the International Professional Practices Framework, which of the following is correct regarding conducting and reporting follow-up activities by the internal audit activity (IAA)?

A.Due to management changes, the IAA is advised by management that no further work will be done. Further follow-up work is not required as management has accepted the related risk.

B.In situations where the identified risk may have a significant impact to the business and senior management has accepted the risk, it is not necessary for the CAE to inform the board of the decision.

C.Management has stopped implementing several key recommendations citing a growing disagreement with their effectiveness. The auditor communicates the situation to the CAE who then escalates the matter to senior management.

D.A newly appointed auditor immediately proceeds to conduct follow-up testing based on previous work performed for the engagement and then reports the results to the chief audit executive (CAE).

Question 214

Which of the following is most likely to be judged as a significant residual risk that would exceed the organization's acceptable risk level?

A.Any risk involving organizational expansion into a new geographical area with an unstable political environment.

B.Any risk that can cause material or financial loss

C.Any risk involving investments into bitcoin and suspicious derivatives

D.Any risk that could cause injuries or pollute the environment

Question 215

Checklists used to assess audit risk have been criticized for all of the following reasons except:

A.Providing a false sense of security that all relevant factors are addressed.

B.Being incapable of translating the experience or sound reasoning intended to be captured by each item on the checklist.

C.Inappropriately implying equal weight to each item on the checklist.

D.Decreasing the uniformity of data acquisition.

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Question 211

Question 212

Question 213

Question 214

Question 215

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