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Financial CIA-II Exam Questions
Certified Internal Auditor (Page 17 )

Updated On: 17-Apr-2026
Page 17 of 103
PDF with 508 Questions

Which of the following would provide the best audit evidence regarding the effectiveness of an applied research department?

  1. Develop a cost-per-product analysis for products developed over the past five years.
  2. Develop a report on revenue generated by or cost savings directly attributable to newly developed products.
  3. Compare research as a percentage of revenue between this company and all major competitors in the same industry.
  4. Compare the number of this year's new product developments to the number of new product developments for the past five years.

Answer(s): B



A retail company uses a computer program that matches electronic vendor invoices with the applicable purchase orders and receiving information, which are also maintained electronically.
If an invoice does not match the other items within predefined ranges, a report is generated and sent to the accounts payable department for further investigation. All of the applicable documents are electronically marked, cross-referenced, and retained in open files. Both an integrated test facility and a systems control audit review file (SCARF) have been included in the system.
An auditor wants to determine the extent to which items are not matched at year end and to investigate the potential causes of the unmatched items. Which of the following audit procedures would be most effective in determining the items to investigate?

  1. Use generalized audit software to read the electronically marked unmatched items.
  2. Use generalized audit software to read the purchase orders and trace to applicable receiving and vendor invoice files.
  3. Use the SCARF to identify unusual items. Select an attributes sample and trace to the underlying documentation.
  4. Submit test data to identify attributes of unmatched items. Follow up by investigating the identified attributes.

Answer(s): A



An auditor receives anonymous information that fraud is occurring in the operation being audited, but no details are given as to the type of fraud or the individuals involved. There are several areas in which fraud could occur. The auditor should:

  1. Identify the area that has the greatest volume of transactions and design a sampling plan for substantive testing.
  2. Apply analytical procedures to areas that might be impacted by possible fraudulent activities.
  3. Interview employees to identify areas where the fraud could be occurring.
  4. Plan detailed tests of the areas that have the highest dollar amount of transactions.

Answer(s): B



A company has recently incurred significant cost overruns on one of its construction projects. Management suspects that these overruns were caused by the contractor improperly accounting for costs related to contract change orders. Which of the following procedures would be appropriate for testing this suspicion?

  1. Verify that the contractor has not charged change orders with costs that have already been billed to the original contract.
    II. Determine if the contractor has billed for original contract work that was canceled as a result of change orders.
    III. Verify that the change orders were properly approved by management.
  2. I only
  3. III only
  4. I and II only
  5. I and III only

Answer(s): C



An internal audit activity is participating in the due diligence work for an acquisition that a company is considering. One engagement objective is to determine if the acquisition's accounts payable contain all outstanding liabilities. Which of the following audit procedures would not be relevant for this objective?

  1. Examine supporting documentation of subsequent (after-period) cash disbursements and verify period of liability.
  2. Send confirmations, including zero-balance accounts, to vendors with whom the company normally does business.
  3. Select a sample of accounts payable from the accounts payable list and verify the supporting receiving reports, purchase orders, and invoices.
  4. Trace receiving reports issued before the period end to the related vendor invoices and accounts payable list.

Answer(s): C



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