IIA IIA-CIA-Part2 Exam With Confidence Using Practice Dumps

When recalculating exchange losses from foreign currency purchases, the internal auditor needs to validate the spot exchange rate on the transaction date (2) and the terms of the forward contract (3). These details are crucial to accurately assess the financial impact and ensure that the hedge is effectively mitigating the exchange rate risk. References: = IIA’s Practice Guide: “Auditing Derivatives” and IIA Standard 1220 - Due Professional Care.

The appropriate conclusion that can be drawn from the findings is that the internal controls guiding contract management are not operating effectively. The listed findings, such as noncompliance with contract provisions, lack of monitoring compliance with contract obligations and deliverables, and absence of contract agreements with key vendors, indicate significant control deficiencies in the contract management process. These deficiencies suggest that the controls intended to ensure compliance and effective management of contracts are either inadequate or not functioning as intended.

IIA's Guide on Internal Controls and Audit Findings.

The observation in question includes the condition ("no approved credit risk management policy" and "17 out of 50 contacts showed clients with a poor credit history") and the cause (the subsidiary concluding contacts with high-risk clients). However, it lacks the effect, which should explain the potential or actual impact of this deficiency on the organization (e.g., financial losses, increased credit risk). Additionally, it is missing the criteria, which should reference the specific rules or policies that are not being followed (e.g., the organization’s credit risk management policy requirements). Including these components would provide a complete and actionable observation.

The Institute of Internal Auditors (IIA) - Practice Guide: Audit Reports and Working Papers