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Free CIA-II Exam Braindumps
Certified Internal Auditor Questions 206–210 (page: 43)

Updated On: 10-Feb-2026
Page 43 of 103
PDF with 508 Questions

An internal auditor has completed an audit of an organization's activities and is ready to issue a report. However, the client disagrees with the internal auditor's conclusions. The auditor should:

  1. Withhold the issuance of the audit report until agreement on the issues is obtained.
  2. Issue the audit report and state both the auditor and client positions and the reasons for the disagreement.
  3. Issue the audit report and omit the client's conclusion as it is not the opinion of the internal auditor.
  4. Perform additional work, with the client's concurrence, to resolve the areas of disagreement and delay the issuance of the report until agreement is reached.

Answer(s): B



Which of the following is an advantage of an interim report?

  1. An interim report provides timely feedback to the audit engagement client.
    II.
    An interim report provides a mechanism for communicating information on red flags promptly while they are being investigated.
    III.
    An interim report provides an opportunity for auditor follow-up of findings before the engagement is completed.
    IV.
    An interim report increases the probability that corrective action will be initiated more quickly.
  2. I and IV only
  3. II and III only
  4. I, III, and IV only
  5. I, II, III, and IV.

Answer(s): C



An internal auditor recommended that an organization implement computerized controls in its sales system in order to prevent sales representatives from executing contracts in excess of their delegated authority levels. A follow-up review found that the sales system had not been modified, but a process had been implemented to obtain written approval by the vice president of sales for all contracts in excess of $1 million. The chief audit executive (CAE) would be justified in reporting this situation to the organization's board iF.

  1. In the opinion of the CAE, the level of residual risk assumed by senior management is too high.
    II.
    Testing of compliance with the new process finds that all new contracts in excess of $1 million have been approved by the vice president of sales.
    III.
    The cost of modifying the sales system to include a preventive control is less than $100,000.
  2. I only
  3. III only
  4. I and III only
  5. I, II, and III

Answer(s): A



Which of the following factors would not be considered in determining appropriate follow-up procedures?

  1. The significance of the audit finding.
  2. The effort and cost needed to correct the reported condition.
  3. The availability of funds in the audited department's budget to correct the reported condition.
  4. The potential consequences if the corrective action fails.

Answer(s): C



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?

  1. Report the evidence to external legal counsel for investigation. Report the legal counsel findings to management.
  2. Report the evidence to the chairperson of the audit committee and recommend an investigation.
  3. 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.
  4. Discontinue audit work associated with the insider trading since it is not relevant to the existing audit.

Answer(s): B



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