IIA CIA IIA-CIA-Part2 New Questions

The chief audit executive (CAE) typically performs several activities following an audit engagement, including reporting follow-up activities to senior management, implementing follow-up procedures to evaluate residual risk, and evaluating the extent of improvements. These activities are crucial to ensure that audit recommendations are properly addressed and that any residual risks are managed effectively. However, determining the costs of implementing the recommendations is not typically a responsibility of the CAE. This task is usually handled by the management of the area being audited, as they have the detailed operational knowledge necessary to accurately estimate these costs. References:

The IIA’s International Standards for the Professional Practice of Internal Auditing (Standards), specifically Standard 2500 - Monitoring Progress.

The IIA’s Practice Guide on Follow-up Processes.

Facilitated team workshops are a risk assessment approach that involves gathering data from work teams representing different levels of an organization. This method encourages collaboration and open discussion among team members, allowing for a comprehensive identification and evaluation of risks from various perspectives within the organization. It helps in capturing a wide range of insights and facilitates consensus on risk priorities, making it a valuable tool for effective risk assessment.

References:

The Institute of Internal Auditors (IIA) Practice Guide on "Risk Assessment in Audit Planning"

COSO Enterprise Risk Management Framework

Issuing an opinion on the overall effectiveness of internal control inherently carries the risk of increased audit risk and associated legal implications. This is because the opinion represents a high level of assurance, and any errors or omissions in the underlying audit work can lead to significant consequences, including potential legal liability. Therefore, auditors must be thorough and ensure that their conclusions are well-supported by the evidence obtained during the audit process.

References:

The Institute of Internal Auditors (IIA) Practice Guide: Forming an Opinion on the Overall Adequacy and Effectiveness of Internal Controls

IIA Standard 2400 - Communicating Results

A. The decision affects the test procedures performed:Correct. The choice between statistical and nonstatistical sampling affects the design of the sample selection, execution of audit procedures, and the nature of conclusions drawn. Statistical sampling involves probabilistic techniques that influence sample size and evaluation, whereas nonstatistical sampling relies on auditor judgment.

B. The auditor's response to errors detected will be influenced:While error response is critical, it is influenced more by the nature and materiality of the errors than by the sampling approach.

C. The competence of the evidence obtained is greater with statistical sampling:This is incorrect because the competence of evidence depends on the procedure itself, not the sampling method used. Both methods can yield competent evidence if applied correctly.

D. Nonstatistical sampling may be more cost effective:While this can sometimes be true, it is context-dependent and not universally applicable, so it is not the best answer.

CIA Exam Syllabus Reference:

Domain II: Risk Management and Control – Sampling Techniques and Audit Evidence.