Most Recent IIA-IAP Exam Dumps

Comprehensive and Detailed Step-by-Step Explanation:

Reference to IIA Standards:

Standard 2120 - Risk Management: Internal audit should evaluate the organization's risk appetite and alignment with decision-making processes.

Definitions:

Risk Appetite (Option B): The level of risk an organization is willing to accept in pursuit of its objectives, making it the most direct determinant of acceptable risk levels.

Risk Capacity (Option A): The organization's ability to absorb risk, which is more strategic and long-term.

Risk Perception (Option C): Subjective views of risk, which can influence decisions but do not directly determine acceptable risk.

Comprehensive and Detailed Step-by-Step Explanation:

Reference to IIA Standards:

Standard 1110 - Organizational Independence: Organizational independence is achieved when the CAE reports functionally to the board or audit committee and administratively to the CEO or equivalent.

Reasoning:

Option C is correct because administrative reporting to the CEO ensures the CAE has access to resources, support, and operations without impairing functional independence.

Option A and Option B describe functional reporting lines (e.g., approval of the audit charter and plans), which are distinct from administrative reporting.

Significance of Reporting Structure:

Administrative reporting ensures the day-to-day management of the internal audit function, while functional reporting maintains independence and alignment with governance.

Comprehensive and Detailed Step-by-Step Explanation:

Challenges with Computer-Assisted Audit Tools (CAATs):

One of the most common issues auditors face is obtaining access to the data needed for analysis, especially when data is stored in secure or restricted systems.

Access issues may arise due to technical restrictions, security policies, or inadequate documentation of data sources.

Reasoning:

Option A is correct because gaining access to relevant, complete, and reliable data is a frequent challenge when using computerized audit tools.

Option B is less common, as CAATs are often designed for use by auditors without requiring advanced IT skills.

Option C refers to reliance on IT personnel, which is less relevant for independent auditors using their own tools.

Mitigating Access Challenges:

Establishing clear communication with IT and obtaining necessary approvals in advance can help overcome data access issues.

Comprehensive and Detailed Step-by-Step Explanation:

Exit Meetings: The purpose of an exit meeting is to ensure that management understands and agrees (or documents any disagreements) with the audit findings, conclusions, and recommendations. Proper documentation ensures that there is a record of the discussion, which can be referred to later if disputes arise about the content.

Other Options:

Option A: The IIA Standards do not explicitly mandate documenting exit meetings. While it is a best practice, it is not a direct requirement.

Option C: The exit meeting's primary purpose is to clarify findings, not evaluate the auditor's performance.

Thus, the correct answer is B.

Comprehensive and Detailed Step-by-Step Explanation:

Control of Goods: The control of goods is generally considered part of inventory management or logistics, not the purchasing process. The purchasing process typically ends with the receipt of goods or services and ensuring appropriate payments.

Other Options:

Authorization of Requisitions: Within scope, as it is directly related to the initiation of the purchasing process.

Matching Goods Received to Requisitions: Part of the purchasing process audit scope to ensure accurate and legitimate transactions.

Thus, the correct answer is B. Control of Goods.