Exactprep IIA-CIA-Part2 Questions

According to IIA guidance, if the internal audit activity does not have sufficient time to complete its usual root cause analysis, the chief audit executive (CAE) may recommend that management conduct further work to identify the root cause and address the issue. This approach ensures that the root cause is still identified and addressed without delaying the audit report, maintaining the integrity and usefulness of the audit findings while leveraging management’s resources.

References:

IIA Standards: 2410.A1 - Criteria for Communicating

IIA Practice Guide: Root Cause Analysis

According to the IIA guidance, when determining the need to follow-up on recommendations, the internal audit activity should consider factors such as the degree of effort and cost needed to correct the reported condition, the complexity of the corrective action, and the impact that may result should the corrective action fail. These factors are critical in assessing the importance and urgency of follow-up. However, the amount of resources required to conduct the follow-up activities should not be a primary consideration, as the focus should be on the significance of the issues and the potential risks associated with them. References: IIA Standard 2500 – Monitoring Progress, IIA Practice Advisory 2500.A1-1

One disadvantage of using flowcharts during a risk assessment is that they may not capture serious risks that are not part of the linear process flow. Flowcharts are excellent tools for visualizing processes and identifying control points within a structured workflow. However, they might overlook risks that arise from non-linear interactions, external factors, or complex interdependencies that are not easily represented in a flowchart format. This limitation can result in an incomplete risk assessment if the auditor relies solely on flowcharts without considering other methods to identify all potential risks.References:

Institute of Internal Auditors (IIA), Practice Guide – Auditing the Control Environment.

The internal auditor's objective in sorting the data by vehicle and identifying instances of refueling on the same or sequential dates is most likely to determine whether fuel purchases were legitimate and for work-related purposes. By analyzing patterns of refueling, the auditor can identify any anomalies or unusual activity that may suggest misuse or personal use of the organization's vehicles. This helps ensure that organizational resources are being used appropriately and that there are no instances of fraud or abuse.

References:

The Institute of Internal Auditors (IIA) Standard 1220 – Due Professional Care: "Internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor."

IIA Practice Guide on "Data Analytics and Continuous Auditing"