IIA-CIA-Part2 Exam Dumps - Practice of Internal Auditing

Analytical procedures involve evaluating financial and operational information by comparing it with expected values. These expectations can be based on historical data, industry benchmarks, budgets, or other relevant criteria. The primary purpose of analytical procedures is to identify any unusual or unexpected variations that could indicate potential issues or areas requiring further investigation.

IIA References:

IIA Standard 2320: Analysis and Evaluation requires internal auditors to analyze and evaluate the information gathered during an engagement. Analytical procedures are a critical part of this process, as they help auditors identify trends, anomalies, and areas of risk by comparing actual results with expectations.

The Practice Guide on Analytical Procedures defines these procedures as the analysis of relationships between different sets of data, with the goal of identifying inconsistencies or unexpected patterns.

The efficiency of an audit is greatly influenced by the adequacy of preliminary survey information. Thorough preliminary surveys help auditors understand the audit scope, identify potential issues early, and plan their work efficiently, thereby increasing overall audit efficiency. References: = IIA Practice Guide: “Engagement Planning: Establishing Objectives and Scope” and IIA Standard 2201 - Planning Considerations.

According to IIA guidance, the internal audit plan should be based on an assessment of risks to the organization (1), designed to determine the effectiveness of the organization's risk management process (2), and aligned with the organization's goals (4). The development of the audit plan is typically the responsibility of the chief audit executive, often with input from senior management and the audit committee, rather than being solely developed by senior management (3). References: IIA Standard 2010 – Planning, IIA Practice Guide – Developing the Internal Audit Plan

When facilitating a risk and control self-assessment (RCSA) workshop, the internal auditor's most appropriate role is to provide the necessary techniques and guidelines for conducting the exercise. This involves guiding participants on the methodology and framework for identifying and assessing risks and controls without influencing their inputs or conclusions, thereby ensuring an objective and effective self-assessment process. References: = IIA Practice Guide: "Facilitation Skills for Auditors".

When reviewing the board of directors, internal auditors should consider testing the presence of an independent critical mass. This refers to the existence of a sufficient number of independent directors who can provide unbiased judgment and oversight. Independence is a cornerstone of effective governance, ensuring that decisions are made in the best interest of the organization without undue influence from management. This attribute is crucial for maintaining the integrity and objectivity of the board's decisions and actions.References: IIA's Practice Guide on Assessing Organizational Governance.

An The top-down approach to understanding business processes is conducted from a broad organizational perspective, beginning with the overall objectives and strategic goals of the organization and then drilling down into the specific processes that support these goals. While this approach ensures alignment with the organization's objectives, it has the greatest risk of overlooking critical processes at the lower levels, especially those that might be operationally significant but not directly linked to top-level objectives.

IIA References:

IIA Standard 2010: Planning suggests that internal auditors should understand the organization’s business processes in relation to its objectives. The top-down approach aligns with this but can risk missing important operational details that might be captured through a more granular (e.g., bottom-up) approach.

According to IIA guidance, a request for an increase in the Chief Audit Executive's (CAE) salary for the next fiscal year should be submitted only to the CEO. Compensation matters typically fall under the purview of executive management rather than the board, as the board focuses on broader governance issues, including risk assessment, audit plans, and resource allocation. References: IIA Standard 1100 – Independence and Objectivity, IIA Practice Advisory 1110-1 – Organizational Independence

The chief audit executive should give the most consideration to the organization's risk management policy when communicating an identified unacceptable risk to management. The risk management policy outlines the organization's approach to managing risk, including risk tolerance levels, risk appetite, and the procedures for identifying, assessing, and mitigating risks. By aligning the communication with the risk management policy, the CAE ensures that the discussion about unacceptable risk is framed within the context of the organization's established risk management framework, facilitating a more structured and effective response from management.References: The IIA's International Standards for the Professional Practice of Internal Auditing, Standard 2010 - Planning and COSO's Enterprise Risk Management Framework.