IIA Updated IIA-CIA-Part2 Exam Questions and Answers by kylo

Entity-level controls set the tone and establish the framework for the overall control environment within an organization. If these controls are poorly designed or deficient, they can undermine the effectiveness of process-level controls, even if those controls are well-designed. Entity-level controls include governance, risk management, and compliance controls that influence the entire organization. Therefore, deficiencies at this level can have a widespread impact, preventing lower-level controls from functioning properly.References:

Institute of Internal Auditors (IIA), International Standards for the Professional Practice of Internal Auditing (Standards), Standard 2130 – Control.

Internal control questionnaires (ICQs) are useful tools for internal auditors to guide interviews with auditees. They help ensure that all relevant aspects of internal controls are covered systematically during the interview process. While ICQs can help in evaluating the design and existence of controls, they primarily provide a structured format for gathering information from auditees about controls in place, rather than serving as direct audit evidence themselves. Therefore, they aid in the interview process by ensuring comprehensive coverage of control-related inquiries.References: The IIA's International Standards for the Professional Practice of Internal Auditing, Standard 2201 - Planning Considerations.

A key planning step for internal auditors to establish appropriate engagement objectives is to evaluate management's risk assessment and the internal audit activity's risk assessment. This step ensures that the audit focuses on areas of highest risk and aligns with the organization's risk management framework. By understanding and incorporating the organization's risk priorities, the internal auditors can design their engagements to provide maximum value and assurance regarding the control environment and risk management processes.

References:

The Institute of Internal Auditors (IIA) Standard 2010: Planning

IIA Practice Advisory 2010-2: Using the Risk Management Process in Internal Audit Planning

The chief audit executive (CAE) should prioritize risks to be used for the audit plan. Although the CAE is not accountable for managing risks, he is responsible for ensuring that the internal audit activity provides assurance on the effectiveness of the risk management processes. The CAE must understand the organization's risk landscape and determine which areas require audit attention based on their significance and potential impact. References: IIA Standard 2010 – Planning, IIA Practice Guide – Coordinating Risk Management and Assurance