IIA-IAP Exam Dumps

Comprehensive and Detailed Step-by-Step Explanation:

Reference to IIA Standards:

Definition of Assurance Services: Assurance services involve the objective examination of evidence to provide an independent assessment of governance, risk management, and control processes.

Compliance engagements align with assurance services by verifying adherence to laws, regulations, or internal policies.

Reasoning:

Option C qualifies as assurance because it involves assessing whether compliance requirements are met.

Option A (process design) and Option B (facilitation) are advisory in nature and fall under consulting services, not assurance.

Impact on the Organization:

Compliance assurance engagements provide critical oversight, helping organizations maintain accountability and avoid regulatory penalties.

Comprehensive and Detailed Step-by-Step Explanation:

Reference to Criteria:

Definition: Criteria are the standards, policies, or benchmarks used to evaluate the subject matter during an audit.

IIA Standard 2410 - Criteria for Communicating: Audit reports should clearly state criteria to ensure findings are relevant and actionable.

Reasoning:

Option B is correct because it references the organization's policies and procedures, which serve as the criteria for evaluating compliance.

Option A describes the condition (what was observed), not the criteria.

Option C describes the effect (the impact of the observed condition).

Importance of Criteria in Audit Reporting:

Including criteria provides a basis for comparison, helping stakeholders understand why a finding is significant and how it deviates from expectations.

Comprehensive and Detailed Step-by-Step Explanation:

Operational Audit: This type of audit focuses on evaluating the efficiency, effectiveness, and economy of operations, such as the mining process and production targets in this case.

Other Options:

Option A: Due diligence typically relates to evaluating financial or operational risks in transactions, such as mergers or acquisitions.

Option B: Business process improvement aims to enhance workflows but is not the primary objective of this audit.

Thus, the correct answer is C. Operational.

Comprehensive and Detailed Step-by-Step Explanation:

Ongoing Risk Evaluation: Insights gathered from multiple audit engagements over the past year provide a broad and detailed perspective on the effectiveness of risk management across the organization.

Other Options:

Option A: Observations of a finance committee may provide some context but are not comprehensive or conclusive.

Option B: External audit findings may complement internal audit evaluations but do not replace ongoing internal assessments.

Thus, the correct answer is C.

Comprehensive and Detailed Step-by-Step Explanation:

Reference to IIA Standards:

Standard 2120 - Risk Management: Internal audit must assess and evaluate the risk management processes of the organization.

Identifying risk scenarios supports engagement objectives by determining vulnerabilities and threats to process objectives.

Reasoning:

Option A is correct because risk scenarios provide insights into potential events or conditions that could hinder achieving objectives. This allows auditors to assess risk exposure and evaluate controls effectively.

Option B (control effectiveness) is a subsequent step in the audit process but does not explain the need for identifying risk scenarios.

Option C focuses on evaluating management's process, which is broader than identifying specific risks for the engagement.

Practical Application:

Risk scenarios guide auditors in tailoring their approach to address areas of greatest vulnerability.