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

According to IIA guidance, monitoring customer quality complaints compared to the prior period to identify vendor issues is least likely to be a key financial control in an organization ' s accounts payable process. Key financial controls in accounts payable typically focus on preventing and detecting fraud and errors in the payment process, such as requiring approval for vendor changes, monitoring payment amounts, and comparing employee and vendor addresses to prevent fraud. Monitoring customer quality complaints is more relevant to quality control and vendor management rather than financial control.

IIA Standards: 2130 - Control

IIA Practice Guide: Auditing the Accounts Payable Process

In this scenario, the internal auditor performed a test of controls on the accounts receivable ledger and found that the error rate was within management ' s expectations. Since the audit focused on the accounts receivable controls, the conclusion should be specific to the scope of the engagement. The auditor can provide positive assurance about the effectiveness of the controls over the recording of transactions in the accounts receivable ledger, as the evidence gathered supports this conclusion.

IIA References:

IIA Standard 2410: Criteria for Communicating states that communications must include the engagement’s objectives and scope as well as applicable conclusions, recommendations, and action plans. Since the engagement was focused on accounts receivable, the assurance provided should relate specifically to the controls in that area.

The Practice Guide on Communicating Results emphasizes that conclusions and assurance should be directly related to the scope of the engagement and the evidence obtained.

When auditing an organization ' s cash-handling activities, the most reliable form of testimonial evidence comes from a knowledgeable person who is independent of the cashiering duty. This independence ensures that the testimonial evidence is unbiased and not influenced by those directly involved in the processes being reviewed. Such evidence is considered more reliable as it is less likely to be affected by personal interests or biases.

The Institute of Internal Auditors (IIA) Practice Guide: Evaluating Evidence

IIA Standard 2310 - Identifying Information

To ensure that the company is not taking any unwanted credit risks, the internal auditor should test controls that ensure construction orders are initiated only after the second invoice, which represents 70% of the payment, is paid. This control is critical because it minimizes the financial risk to the company by ensuring that a significant portion of the payment is received before the majority of the work is undertaken. This practice helps protect the company from potential non-payment issues and reduces the financial exposure associated with the project.

COSO Framework

The Institute of Internal Auditors (IIA) Standard 2130: Control