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Financial CIA-II Exam Actual Questions
Certified Internal Auditor (Page 14 )

Updated On: 7-Jul-2026
Page 14 of 103
PDF with 508 Questions

Which of the following is used to identify and prioritize critical business applications to determine those that must be restored and the order of restoration in the event that a disaster impairs information systems processing?

  1. Contingent facility contract analysis.
  2. System backup analysis.
  3. Vendor supply agreement analysis.
  4. Risk analysis.

Answer(s): D



In forming a team to investigate an organization's potential adoption of an activity-based costing system, the best reason to include an internal auditor on the team would be the auditor's knowledge of:

  1. Activities and cost drivers.
  2. Information processing procedures.
  3. Current product cost structures.
  4. Internal control alternatives.

Answer(s): D



Given the scarcity of internal audit resources, a chief audit executive (CAE) decided not to
schedule a follow-up of audit recommendations when developing engagement work schedules.
Does the CAE's decision violate the Standards?

  1. No, because the Standards do not specify whether follow-up is needed.
  2. No, because when there is evidence of sufficient motivation by the client, there is no need for follow-up action.
  3. Yes, because scarcity of resources is not a sufficient reason to omit follow-up action.
  4. Yes, because the Standards require the auditors to determine whether the client has appropriately implemented all of the auditor's recommendations.

Answer(s): C



An auditor for a major retail company suspects that inventory fraud is occurring at three stores which have high costs of goods sold. Which of the following audit activities would provide the most persuasive evidence that fraud is occurring?

  1. Use an integrated test facility (ITF) to compare individual sales transactions with test transactions submitted through the ITF and investigate all differences.
  2. Interview the three individual store managers to determine if their explanations about the observed differences are the same, and then compare their explanations to that of the section manager.
  3. Schedule a surprise inventory audit to include a physical inventory and investigate areas of inventory shrinkage.
  4. Select a sample of individual store prices and compare them with the sales entered on the cash register for the same items.

Answer(s): C



Which of the following procedures would be most helpful in providing additional evidence when an auditor suspects that an unidentified employee is submitting and approving invoices for payment?

  1. Use generalized audit software to identify invoices from vendors with post office box numbers or other unusual features. Select a sample of those invoices and trace to supporting documents such as receiving reports.
  2. Select a sample of payments made during the year and investigate each one for approval.
  3. Select a sample of receiving reports representative of the period under investigation and trace to approved payment. Note any items not properly processed.
  4. Select a sample of invoices paid during the past month and trace them to appropriate vendor accounts.

Answer(s): A



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