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CIA-II - Certified Internal Auditor (CIA) - Dump Information

Vendor : Financial
Exam Code : CIA-II
Exam Name : Certified Internal Auditor (CIA)
Questions and Answers : 808 Q & A
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CIA-II Questions and Answers

Pass4sure CIA-II Dumps with Real Questions & Practice Test


Confirmations are a highly regarded form of information. Confirmation is most effective

in addressing the existence assertion for the

  1. Addition of a milling machine to a machine shop.

  2. Sale of merchandise during regular course of business.

  3. Inventory held on consignment.

  4. Granting of a patent for a special process developed by the organization.

Answer: C

When inventories are held by an outside custodian, such as a consignee, the internal auditor ordinarily obtains direct confirmation in writing from the custodian. Confirmation of consigned goods is most likely to be effective for the existence and rights-and- obligations assertions.


Observation is considered a reliable engagement procedure, but one that is limited in usefulness. However, it is used in a number of different engagement situations. Which of the following statements is true regarding observation as an engagement technique?

  1. It is the most effective engagement methodology to use in filling out internal control questionnaires.

  2. It is the most persuasive methodology to learn how transactions are really processed during the period under review.

  3. It is rarely sufficient to satisfy any assertion other than existence.

  4. It is the most persuasive technique for determining if fraud has occurred.

Answer: C

Observation is effective for verifying whether particular assets such as inventory or equipment exist at a given date. However, it is of limited use in addressing other assertions. Thus, it provides less persuasive information about the assertions of completeness, rights, valuation, and presentation and disclosure. For example, merely observing inventory does not determine whether the engagement client has rights in it.


One engagement procedure for an engagement to evaluate facilities and equipment is to

test the accuracy of recorded depreciation. Which of the following is the best source of information that the equipment in question is in service?

  1. A review of depreciation policies and procedures.

  2. A comparison of depreciation schedules with a listing of insurance appraisals for the same equipment.

  3. A comparison of depreciation schedules with the maintenance and repair logs for the same equipment.

  4. A review of inventory documentation for the equipment.

Answer: C

The maintenance and repair records provide information that equipment exists and is in use. Equipment in service is more likely to require maintenance than retired equipment. However, the best information is the internal auditor's direct observation.


Which of the following documents provides the most persuasive information concerning the existence and valuation of a receivable?

  1. A credit approval document supported by the customer's audited financial statements.

  2. A copy of a sales invoice to the customer in the engagement client's records.

  3. A positive confirmation received directly from the customer.

  4. A customer's purchase order in the engagement client's records related to the credit sale.

Answer: C

A positive confirmation by the debtor is the most reliable information other than payment that the receivable is a valid asset and that it is properly valued. This information is especially reliable because the customer has no incentive to confirm a nonexistent obligation and because the documentation has not been under the engagement client's control.


A bank internal auditor wanted to verify the accuracy of the general ledger balance of a

depository account. One engagement procedure used in this process was to mail positive confirmations to statistically sampled depositors. However, the number of replies received was not adequate to form a valid conclusion about the account's accuracy. What action should the internal auditor take to accomplish this objective?

  1. Assume that the no replies represent tacit agreements by the depositor, document the results, and perform no further work on this engagement procedure.

  2. Expand the original confirmation sample to include additional depositors.

  3. Verify accuracy of the depositors' addresses. Retail confirmation requests a second time with a notation indicating that it is a second request.

  4. Mail negative confirmation requests to all non-replies and document results of testing. If necessary, telephone depositors to inquire about any disagreement with balances


Answer: C

A positive confirmation asks the debtor for a reply. It may ask the respondent to state whether (s)he agrees with the information given or request that the recipient fill in the account balance or provide other information. The latter type of positive confirmation is called a blank form. The negative confirmation asks for a response only when the debtor disagrees. Positive confirmation is therefore useful when an internal auditor wants to obtain documentary information to verify account balances. If the internal auditor fails to receive positive confirmation, alternative procedures including second and third requests should be employed.


Which of the following statements describes an internal control questionnaire?

  1. It provides detailed information regarding the substance of the control system.

  2. It takes less of the engagement client's time to complete than other control evaluation devices.

  3. It requires that the internal auditor be in attendance to properly administer it.

  4. It provides indirect information that might need corroboration.

Answer: D

An internal control questionnaire consists of a series of questions about the controls designed to prevent or detect errors or irregularities. Answers to the questions help the internal auditor to identify specific policies and procedures relevant to specific assertions. They also help in the design of tests of controls to evaluate their effectiveness. The questionnaire provides a framework to assure that specific concerns are not overlooked, but it is not a sufficient means of understanding the entire system. Thus, the evidence obtained is indirect and requires corroboration by means of observation, interviews, flowcharting, examination of documents, etc.


During interviews with the inventory management personnel, an internal auditor learned that salespersons often order inventory for stock without receiving the approval of the vice president of sales. Also, detail testing showed that there are no written approvals on purchase orders for replacement parts. The results of detail testing are a good example of

  1. Indirect information.

  2. Circumstantial information.

  3. Corroborative information.

  4. Subjective information.

Answer: C

Corroborative information is evidence from a different source that supplements and confirms other information. For example, oral testimony that a certain procedure was not performed may be corroborated by the absence of documentation.


Which of the following engagement objectives will be accomplished by tracing a sample of accounts receivable debit entries to customer invoices and related shipping documents?

  1. Sales are properly recorded.

  2. Sales are billed at the correct prices.

  3. Accounts receivable represent valid sales.

  4. Customer credit is approved.

Answer: C

By vouching sales transactions from the accounts receivable ledger back to the sales invoices, the internal auditor verifies that these accounts receivable are properly supported by sales. These sales should then be vouched back to related customer orders and traced forward to shipping documents. The purpose is to detect fictitious sales and assure that each sale is properly documented and posted to the accounts receivable subsidiary ledger. The latter objective also requires sales invoices to be traced to the accounts receivable subsidiary ledger.


Management believes that some specific sales commissions for the year were too large.

The accuracy of the recorded commission expense for specific salespersons is best determined by

  1. Computation of selected sales commissions.

  2. Calculating commission ratios.

  3. Use of analytical procedures.

  4. Tests of overall reasonableness.

Answer: A

Sales commission is based on the application of a ratio to the amount of the sale. The best information about the accuracy of sales commission expense for specific individuals is to recomputed the amounts derived from a sample of transactions. These tests should be done at the same time as procedures testing accrued liabilities.


An internal auditor traces copies of sales invoices to shipping documents to determine that

  1. Customer shipments were billed.

  2. Sales that are billed were also shipped.

  3. Shipments to customers were also recorded as receivables.

  4. The subsidiary accounts receivable ledger was updated.

Answer: B

If the invoices in the sample can be correctly matched with shipping documents, some assurance is given that items billed are also shipped.


A large manufacturer has a transportation division that supplies gasoline for the

organization's vehicles. Gasoline is dispensed by an attendant who records the amount issued on a serially prenumbered gasoline disbursement form, which is then given to the accounting department for proper recording. When the quantity of gasoline falls to a certain level, the service station attendant prepares a purchase requisition and sends it to the purchasing department where a purchase order is prepared and recorded in a gasoline purchases journal. Which of the following engagement procedures best determines whether gasoline disbursements are fully recorded?

  1. Compare the gasoline purchase requisitions with the gasoline disbursement records.

  2. Select a number of gasoline purchases from the gasoline purchases journal and

    compare them with their corresponding purchase orders. Ascertain that the purchases are serially prenumbered, are matched with purchase requisitions, and are authorized by someone independent of employees of the service station.

  3. Perform analytical procedures comparing this period's gasoline consumption with

    prior periods.

  4. Match the quantity of gasoline disbursed according to disbursement forms with an

independent reading of quantity disbursed at the pump.

Answer: D

Physical information is best obtained through direct observation or inspection by the internal auditor. Because the gasoline disbursement forms are prenumbered, the internal auditor is able to match them with the independent reading of quantity disbursed at the pump to test the completeness of disbursement records.


To control daily operating costs, an organization decreased the number of times a

messenger service was used each day. Despite those measures, the monthly bill continued

to increase. What procedure should the internal auditor use to detect whether improper services were being billed?

  1. Reconcile a sample of messenger invoices to pickup receipts.

  2. Test the mathematical accuracy of a sample of messenger invoices.

  3. Scan ledger accounts and messenger invoices.

  4. Observe daily use of the messenger service.

Answer: A

When the amount charged for a service increases as an entity reduces its use of the service, the possibility exists that the entity is being charged for service not received. The internal auditor should reconcile a sample of messenger invoices to pickup receipts. By multiplying the number of trips authorized by the charge per trip, any discrepancy can be identified.


To determine whether credit controls are inconsistently applied, preventing valid sales to creditworthy customers, the internal auditor should

  1. Confirm current accounts receivable.

  2. Trace postings on the accounts receivable ledger.

  3. Analyze collection rates and credit histories.

  4. Compare credit histories for those receiving credit and for those denied credit.

Answer: D

Credit policy should maximize profits by balancing bad debt losses and the increase in sales derived from granting credit. One concern in an engagement to review credit management is whether credit policies and procedures are fairly administered.


To test whether debits to accounts receivable represent valid transactions, the internal auditor should trace entries from the

  1. Sales journal to the accounts receivable ledger.

  2. Accounts receivable ledger to the cash receipts journal.

  3. Accounts receivable ledger to sales documentation.

  4. Cash receipts documentation to the accounts receivable ledger.

Answer: C

By vouching sales transactions from the accounts receivable ledger back to the sales invoices, the internal auditor verifies that these accounts receivable are properly supported by sales. These sales should then be vouched back to related customer orders and traced forward to shipping documents. The purpose is to detect fictitious sales and assure that each sale is properly documented and posted to the accounts receivable subsidiary ledger. The latter objective also requires sales invoices to be traced to the accounts receivable subsidiary ledger.


Cash receipts should be deposited on the day of receipt or the following business day.

Select the most appropriate engagement procedure to determine that cash is promptly deposited.

  1. Review cash register tapes prepared for each sale.

  2. Review the functions of cash handling and maintaining accounting records for proper separation of duties.

  3. Compare the daily cash receipts totals with the bank deposits.

  4. Review the functions of cash receiving and disbursing for proper separation of duties.

Answer: C

A standard control over the cash receipts function is to require that daily cash receipts be deposited promptly and intact. Hence, the total of cash receipts for a day should equal the bank deposit because no cash disbursements are made from the daily receipts. To determine whether cash receipts are promptly deposited, the internal auditor should compare the daily cash receipts totals with bank deposits.


Which of the following engagement procedures will provide the least relevant information for determining that payroll payments were made to bona fide employees?

  1. Reconcile time cards in use to employees on the job.

  2. Examine canceled checks for proper endorsement and compare to personal records.

  3. Test for segregation of the authorization for payment from the hire/fire authorization.

  4. Test the payroll account bank reconciliation by tracing outstanding checks to the payroll register.

Answer: D

A payroll account proof tests the completeness assertion. However, it has no bearing on the validity of the transactions.


Which of the tests provides the least significant information when testing for suspected fraudulent sales?

  1. Tracing a sample of inventory removal slips from inventory through billing to the sales journal.

  2. Performing analytical tests of sales by comparing sales and gross margins overtime.

  3. Performing analysis of write-offs and sales returns, and comparing the amounts over the past several years.

  4. Confirming sales transactions with customers and investigating nonresponses.

Answer: A

Tracing a sample of inventory removal slips is least likely to provide evidence of fraudulent sales because it applies to transactions that have apparently been properly authorized and documented.


The most reliable information an internal auditor can assess when determining an organization's legal title to inventories is

  1. Monthly gross profit and inventory levels.

  2. Purchase orders.

  3. Paid vendor invoices.

  4. Records of inventories stored at off-site locations.

Answer: C

Mere possession of inventory does not signify that another party does not have a claim to it. For example, the inventory may be held on consignment. Payment of vendor invoices is the culmination of the purchases-payables cycle. The paid invoice evidences the purchaser's ownership of the inventory.


An internal auditor has set an engagement objective of ascertaining the reasonableness of

the increases in rental revenue resulting from operating costs passed on to the lessee by the landlord. The internal auditor has already inspected the lease contract to determine that such costs are allowed. Which of the following engagement procedures will best meet this objective?

  1. Inspection of documents.

  2. Observation.

  3. Inquiry.

  4. Analytical review.

Answer: D

Computation of the rates of increase in operating costs passed through to the lessee from period to period in relation to inflation rates provides an initial view of the reasonableness of the increases.


An internal auditor has set an engagement objective of determining whether the planned rate of return on investment in international operations has been achieved. Which of the following engagement procedures will best meet this objective?

  1. Inspection of documents.

  2. Observation.

  3. Inquiry.

  4. Analytical review.

Answer: D

By comparing the rate of return achieved with the budget for international operations for the last several time periods, the internal auditor can determine the variances from budget and determine the adequacy of the return on the investment.


Which of the following is the most appropriate engagement procedure to test the

processing of interbank transfers?

  1. Analyze a sample of interbank transfers throughout the period including period-end reconciliations.

  2. Obtain cutoff bank statements for each bank account and reconcile them to accounting records.

  3. Send bank confirmation requests to each bank in which accounts are maintained and reconcile the completed forms to accounting records.

  4. Trace all bank deposits recorded in accounting records near the end of the fiscal period to supporting documentation and to bank statements.

Answer: A

If the engagement objective is to test compliance with processing procedures, the appropriate procedure is to examine a sample of transfers and trace them to the accounting records, including the period-end bank reconciliation for each account.

Financial CIA-II Exam (Certified Internal Auditor (CIA)) Detailed Information

Certified Internal Auditor (CIA): Strengthen Your Core
The CIA journey begins with a focus on The IIA’s International Standards for the Professional Practice of Internal Auditing (Standards) and aspects of mandatory guidance under the IPPF. The journey continues with a focus on managing an internal audit project and culminates with concepts related to internal control, risk, governance, and technology. The CIA is a 3-part process for establishing your foundational core and starting point for career growth to:
Distinguish you from your peers.
Demonstrate your proficiency with internal staff and external clients.
Develop your knowledge of best practices in the industry.
Demonstrate your proficiency and professionalism.
Lay a foundation for continued improvement and advancement.
Get Started
Internal Audit Practitioner: A New First Stop on Your Road to Success
The IIA's Internal Audit Practitioner designation.The Internal Audit Practitioner designation is a great way to quickly demonstrate your internal audit aptitude. You can earn this new designation through social badging by completing the Internal Audit Practitioner application and taking and passing the Certified Internal Auditor (CIA) Part One exam.
Candidates who have successfully completed the CIA Part One exam within the past 24 months are also eligible to apply.
For more information, please visit the Internal Audit Practitioner web page.
Six Steps to Certification
If you need help getting started, refer to the six steps to certification an internal auditor should review when making the decision to become certified in the profession.
Quick Links
Internal Audit Practitioner
CIA Eligibility Requirements
CIA Exam Syllabus
Sample Exam Questions
CPE Requirements for CIAs
CIA Exam Preparation Resources
CBT Exam Tutorial
Internal Audit Practitioner: A New First Stop on Your Road to Success
​The IIA's Internal Audit Practitioner designation.To support new and rotational auditors as they endeavor to take the first step on their personal journey into internal auditing, The IIA is pleased to announce the Internal Audit Practitioner designation.
The Internal Audit Practitioner designation is a great way to quickly demonstrate your internal audit aptitude. You can earn this new designation through social badging by completing the Internal Audit Practitioner application and taking and passing the Certified Internal Auditor® (CIA®) Part One exam. You can apply through CCMS to obtain this special designation.
Candidates who have previously passed CIA Part One who wish to obtain the Internal Audit Practitioner designation may apply as long as they passed the exam no more than 24 months prior to applying for the designation.
Ideal for New or Rotational Internal Auditors
If you are beginning your auditing career journey, obtaining this designation allows you to make a statement about your knowledge and aptitude as you progress through CIA Part 2 and 3. If you are navigating through a rotational role, the Internal Audit Practitioner designation provides you with the foundational knowledge you will need to make the most of your experience.
A Great Way to Train your Staff on the Foundation of Internal Audit
If you manage an audit team, the Internal Audit Practitioner designation is a great way to establish a common foundation of skills and knowledge related to internal audit best practices. Set your team up for internal audit success by taking steps to insure they are well versed in internal audit basics by encouraging your associates to take and pass Part One of the CIA exam and earn the Internal Audit Practitioner designation.
Pricing Information
This chart states the application and registration fees for the Internal Audit Practitioner program:
​First-time Applicant Members​ ​Nonmember
​Internal Audit Practitioner Application fee ​US$100 US$200​
​CIA Part One Exam registration fee US$250​ ​US$350
Applicants who have already completed and passed the CIA Part One exam 24 months prior to applying for the Internal Audit Practitioner designation must complete the Internal Audit Practitioner application at a reduced fee:
​Previously passed the CIA Part One exam within 24 months ​Members Nonmembers​
​Internal Audit Practitioner Application fee US$50​ US$100​
Register through CCMS today! To learn more about the program and eligibility requirements, please visit the Internal Audit Practitioner FAQ.
Eligibility Requirements
Please refer to the Internal Audit Practitioner FAQ for full details.
Internal Audit Practitioner candidates must meet the eligibility requirements for character, work experience, and identification. Before a candidate application can be approved, ALL documentation (character reference and identification) must be received and approved by The IIA’s Certification staff.
Work Experience
Internal Audit Practitioner candidates must have six months internal auditor or equivalent experience (i.e., experience in audit or assessment disciplines, including internal auditing, external auditing, quality assurance, compliance, and internal control). The experience requirement must be fulfilled by the point of completion. There is no defined educational requirement.
Experience Verification Form
Once you have completed the form, please access the Certification Document Upload Portal and upload your form(s) there. (Submit the document type as Work Experience.)
Character Reference
Candidates must exhibit high moral and professional character and must submit a Character Reference Form signed by a CIA, CGAP, CCSA, CFSA, CRMA, or the candidate's supervisor.
Character Reference Form
Once you have completed the form, please access the Certification Document Upload Portal and upload your form(s) there. (Submit the document type as Character Reference.)
Proof of Identification
Candidates must provide proof of identification in the form of a copy of the candidate’s official passport or national identity card. These must indicate current status; expired documents will not be accepted. All documents must be scanned and uploaded through the Document Upload Portal in a manner that ensures the photo is clearly legible.
Internal Audit Practitioner FAQ
FAQ Expand All
What is the Internal Audit Practitioner program?
The Internal Audit Practitioner program is offered by The IIA and provides separate recognition and status for candidates who successfully complete and pass the CIA Part One exam.
How will the Internal Audit Practitioner program benefit candidates?
The Internal Audit Practitioner program is the initial key to professional success, opening doors for career opportunities, and earning candidates increased credibility and respect within their profession and organization.
For most, it is an important stepping stone towards completion of the full CIA or of those specialty certifications that require completion of the CIA Part One exam as a co-requisite (currently CRMA). It is also a desirable minimum achievement for those who are likely to be in internal auditing for two years or less.
Who is eligible to apply?
Please use the PDF to determine if you are eligible to apply.
What are the eligibility requirements?
The eligibility requirements for Internal Audit Practitioner are as follows:
Valid photo ID
Completion of the Internal Audit Practitioner program application
Character reference
Six months internal audit or equivalent experience (i.e., experience in audit or assessment disciplines, including internal auditing, external auditing, quality assurance, compliance, and internal control)
The experience requirement must be fulfilled by the point of completion. There is no defined educational requirement.
How much does the Internal Audit Practitioner recognition program cost?
The application and registration fees for the Internal Audit Practitioner program are as follows:
​First-time Applicant ​Members ​Non-member ​ ​
​Internal Audit Practitioner Application fee USD​ $100 ​USD $200 ​
​CIA Part One Exam
registration fee ​USD $250 ​USD $350 ​
Applicants who have already completed and passed the CIA Part One exam 24 months prior to applying for the Internal Audit Practitioner designation must complete the Internal Audit Practitioner application at a reduced fee:
Previously passed the CIA
P1 exam within 24 months​ Members​ Non-member​
Internal Audit Practitioner
Application fee​ USD $50​ USD $100​
Do I have to be a member of The IIA to apply?
While Internal Audit Practitioner candidates are not required to join The IIA, we strongly encourage you to take advantage of the member benefits including exam fee discounts, free CPE reporting, networking opportunities, and more.
If you live within North America click HERE
If you live outside of North America click HERE
How do I apply to the Internal Audit Practitioner program?
Complete the Internal Audit Practitioner application (available late June) through The IIA’s Certification Candidate Management System (CCMS).
Once you have submitted your application, submit your required documentation through The IIA’s document upload portal. Once your documents have been approved, you will automatically receive notification of your status. To access The IIA’s document upload portal click HERE.
How do I register for the CIA Part One exam?
Once your application for the Internal Audit Practitioner is approved, log into CCMS and complete the CIA Part One exam registration form. The exam is available through computer-based testing, allowing you to test year-round at more than 500 locations worldwide at any IIA-authorized Pearson VUE testing center. To locate the testing centers nearest you, visit the Pearson VUE website. You must apply and register in The IIA's Certification Candidate Management System (CCMS) prior to scheduling an exam.
What is the syllabus for the CIA Part One exam?
The topics tested include aspects of mandatory guidance from the IPPF; internal control and risk concepts; as well as tools and techniques for conducting internal audit engagements.
Note: All items in this section of the syllabus will be tested at the Proficiency knowledge level unless otherwise indicated below.
Mandatory Guidance (35-45%)
Internal Control/Risk (25-35%) – Awareness Level
Conducting Internal Audit Engagement – Audit Tools and Techniques (25-35%)
To review the full syllabus for the CIA Part One exam please click HERE. To review sample exam questions for the CIA Part One exam please click HERE.
How long is the CIA Part One exam?
The CIA Part One exam consists of 125 questions. Candidates will have 2 hours and 30 minutes to complete the exam.
What do I have to do to retain my recognition?
Internal Audit Practitioners will be awarded 2 years of CPE. At the end of the two years, you can report CPE once to keep your designation active for 12 additional months. At the end of the 3rd full year of holding the Internal Audit Practitioner, the designation will automatically expire.
For example if you earn the Internal Audit Practitioner on 1 June 2015, your first CPE report is due on or before 31 December 2017. After that, your designation will expire at the end of 2018.
What if I earn a certified status in the CIA or CRMA programs?
If you complete the CIA program (pass all three parts of the CIA exam) or obtain the CRMA, your Internal Audit Practitioner designation will automatically expire.
Why does my designation expire after 3 full years?
​The Internal Audit Practitioner is not designed to be held indefinitely. This program is designed to accommodate those that will only be in the professional for a short amount of time, and those that do not yet have enough experience to enter the full CIA program. As such, the designation will expire after 3 full calendar years.
Will candidates receive certification?
​The Internal Audit Practitioner program is not a certification program. The program is intended to recognize candidates who successfully complete the CIA Part One exam and are approved for the program.
Will I receive a paper certificate?
​No, individuals that earn the Internal Audit Practitioner designation will not receive a paper certificate. Instead, you will receive a digital badge that represents your achievement. Candidates will be able to display their recognition through social badging. Social badging allows holders of IIA qualifications to digitally display their credentials on social and professional networking sites at no cost to the candidate. For more information on Social Badging, please click HERE.
Certified Internal Auditor® (CIA®) Exam Syllabus
The Certified Internal Auditor (CIA) exam tests a candidate's knowledge of current internal auditing practices and understanding of internal audit issues, risks and remedies.
Exam Non-disclosure
The CIA exam is a non-disclosed examination, which means that current exam questions and answers will not be published or divulged.
NOTE: Exam topics and/or format are subject to change as approved by The IIA's Professional Certification Board (PCB).
Part 1 – Internal Audit Basics
125 questions | 2.5 Hours (150 minutes)
The CIA exam Part 1 topics tested include aspects of mandatory guidance from the IPPF; internal control and risk concepts; as well as tools and techniques for conducting internal audit engagements. Note: All items in this section of the syllabus will be tested at the Proficiency knowledge level unless otherwise indicated below.
Part 2 – Internal Audit Practice
100 questions | 2.0 Hours (120 minutes)
The CIA exam Part 2 topics tested include managing the internal audit function via the strategic and operational role of internal audit and establishing a risk-based plan; the steps to manage individual engagements (planning, supervision, communicating results, and monitoring outcomes); as well as fraud risks and controls. Note: All items in this section of the syllabus will be tested at the Proficiency knowledge level unless otherwise indicated below.
Part 3 – Internal Audit Knowledge Elements
100 questions | 2.0 Hours (120 minutes)
The CIA exam Part 3 topics tested include governance and business ethics; risk management; organizational structure, including business processes and risks; communication; management and leadership principles; information technology and business continuity; financial management; and the global business environment. Note: All items in this section of the syllabus will be tested at the Awareness knowledge level unless otherwise indicated below.
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