Authentic IIA Certification Exam IIA-CIA-Part2 Questions Answers

Coordinating audit plans with other internal and external assurance providers is critical to ensure coverage and avoid duplication of efforts. According to IIA Practice Advisory 2050-1, sharing high-level information such as objectives, scope, and timing supports effective coordination and minimizes the risk of conflicts of interest, while still maintaining confidentiality. Detailed sharing of risk assessments, planned tests, and past results might breach confidentiality and independence standards.

The Institute of Internal Auditors (IIA) - Practice Advisory 2050-1: Coordination of Internal and External Audit Activities

Bank confirmations are the most reliable source for verifying the current year-end bank balances. These confirmations are direct responses from the bank to the auditor, providing independent verification of the account balances as of the end of the year. This external confirmation is considered more reliable than internal documents like bank statements, reconciliations, or general ledger balances because it comes directly from a third-party source, ensuring its accuracy and completeness.

The Institute of Internal Auditors (IIA) - Practice Guide: External Confirmations

Auditing Standards (e.g., ISA 505 - External Confirmations)

After management has implemented an action plan to improve controls, the most appropriate follow-up action for the auditor is to perform retesting. Retesting involves verifying that the new procedures are effective in addressing the control deficiencies identified during the initial audit.

IIA Standard 2500 – Monitoring Progress:

This standard requires the internal audit activity to monitor and ensure that management actions have been implemented and are working as intended. Retesting is a critical component of this process because it confirms that the new controls effectively mitigate the risks.

Importance of Retesting:

Retesting allows the auditor to verify that the specific control activities, which were previously found to be deficient, have been corrected. This hands-on approach provides direct evidence of the effectiveness of the new procedures.

IIA Practice Advisory 2500-1:

The advisory emphasizes the need for follow-up activities to include retesting when necessary to confirm that management’s actions have resolved the issues identified.

Option A (Conduct another audit): Conducting a completely new audit might be excessive; follow-up and retesting are sufficient to confirm the effectiveness of the corrective actions.

Option B (Ensure procedures are documented): Documentation is important, but it does not confirm that the procedures are actually effective.

Option D (Analyze procedures and report to management): Analysis is useful, but retesting provides direct verification of effectiveness.

Detailed Explanation:Why Not Other Options?Conclusion: Option C is correct because retesting confirms that the new procedures effectively address the previously identified deficiencies, ensuring that the risks have been mitigated as intended, in line with IIA guidance.