IIA Updated IIA-CIA-Part2 Exam Questions and Answers by dakota

A. Determine whether the purchasing department complies with policy by examining a random selection of purchase orders:Correct. Reviewing a random sample of purchase orders is a standard procedure for evaluating compliance with purchasing policies, such as approval requirements, vendor selection, and adherence to budget constraints.

B. Evaluate whether purchasing requests are properly approved by authorized staff by obtaining independent verification from the vendors:Vendor verification is not typically used to evaluate internal approvals as this information is available within the organization’s records.

C. Ascertain whether material receipts are recorded on a timely basis by reviewing physical inventory stock counts:Physical inventory reviews focus on inventory management and reconciliation, not specifically on the timeliness of receipts.

D. Determine whether prices charged for goods received are correct by reviewing the appropriate accounts payable record by vendor:While reviewing accounts payable records helps verify the accuracy of pricing, it does not directly evaluate the purchasing department’s adherence to procedures.

CIA Exam Syllabus Reference:

Domain V: Performing Internal Audit Services – Audit Engagement Objectives and Procedures.

According to IIA guidance, if management refuses to accept audit recommendations and implement corrective actions, the chief audit executive (CAE) has a responsibility to ensure that the audit committee or the board is aware of the unresolved risks. The CAE should escalate the matter to senior management first. If senior management still does not take action, the CAE should then inform the board. This escalation process ensures that the board is fully informed about significant risks that management has decided to accept and can take appropriate action if necessary.

The Institute of Internal Auditors (IIA) - Standards for the Professional Practice of Internal Auditing, Standard 2600 - Communicating the Acceptance of Risks

A. Vendor contracts:While vendor contracts may reveal terms, they do not directly identify potential conflicts of interest.

B. Employee master list:Correct. Comparing the employee master list with vendor information can help identify conflicts of interest, such as vendor ownership or employee relationships.

C. Payment records:Useful for verifying transactions but not for identifying conflicts of interest.

D. Purchasing policy:Provides guidelines but does not assist directly in identifying conflicts.

CIA Exam Syllabus Reference:

Domain II: Risk Management and Control – Identifying and Mitigating Conflicts of Interest.

If an internal auditor decides to adjust the audit work program during the fieldwork phase of an assurance engagement, the most appropriate next step is to obtain approval from the engagement supervisor. This ensures that any changes to the scope or procedures are reviewed and sanctioned by the audit management, maintaining the integrity and alignment of the audit objectives.

IIA Standards: 2240 - Engagement Work Program

IIA Practice Guide: Engagement Planning