Most Recent IIA-CIA-Part2 Exam Dumps

According to the IIA Standards, particularly Standard 2500 - Monitoring Progress, internal auditors are responsible for monitoring the disposition of results communicated to management. They need to assess whether management has taken appropriate action to address audit findings or has consciously accepted the risk of not taking action. The follow-up process is crucial to ensure that identified risks are managed effectively. Reference: = IIA's Standard 2500 - Monitoring Progress and Practice Guide on Follow-up Processes.

A risk that is deemed 'unacceptable' to the organization is one where the residual risk (the remaining risk after controls are applied) exceeds the organization's risk tolerance level. This means that despite controls in place, the level of risk remains higher than what the organization is willing to accept. Identifying such risks is critical for ensuring appropriate management action to mitigate them further. Reference:

The IIA's Practice Guide on Risk Management.

COSO's Enterprise Risk Management -- Integrating with Strategy and Performance.

The most appropriate approach for internal audit activity to follow up on management action plans is to create a tracking system. This ensures that follow-up activities are systematically monitored and documented. Such a system can track the status of action plans, provide reminders for due dates, and record progress updates, thus ensuring that management's corrective actions are implemented and effective. Regular monitoring and tracking are essential to verify that issues identified in audits are addressed in a timely manner.

Institute of Internal Auditors (IIA) Standards: Implementation Standards 2500 -- Monitoring Progress

COSO Framework: Monitoring Activities Component

In internal auditing, the reliability of evidence is critical. According to IIA standards, evidence that is obtained directly from an external source, such as a customer, is generally considered more reliable, especially when it is timely.

Detailed Explanation:

IIA Standard 2310 -- Identifying Information:

This standard requires that internal auditors obtain sufficient, reliable, relevant, and useful information to achieve the engagement's objectives. Evidence obtained directly from external sources is often deemed more reliable because it is less likely to be biased or manipulated.

Direct Evidence:

Evidence obtained directly from a customer is considered highly reliable because it comes from an independent and external party. It is less likely to be influenced by internal pressures or conflicts of interest.

Timeliness:

The timeliness of evidence also affects its reliability. Recent and relevant information is more likely to accurately reflect the current state of affairs, making it more reliable for decision-making.

Why Not Other Options?

Option A (Untested third party): Although external, the reliability of evidence from an untested third party is uncertain until their credibility is established.

Option B (Uncorroborated evidence from an employee): This is less reliable as it may be subject to bias or self-interest.

Option C (Undocumented evidence from a manager): Undocumented evidence is generally less reliable as it lacks supporting documentation that can be verified.

The balanced scorecard, introduced by Robert Kaplan and David Norton, includes four main components that provide a comprehensive view of an organization's performance. These components are:

Financial Measures -- to track financial success and shareholder value.

Learning and Growth -- to foster an environment of continuous improvement and innovation.

Customers -- to measure customer satisfaction and market share goals.

Internal Processes -- to ensure that critical operations and business processes are running efficiently. These elements together help an organization balance short-term objectives with long-term goals. Reference:

Kaplan, R.S., & Norton, D.P. (1996). The Balanced Scorecard: Translating Strategy into Action.