IIA-IAP Exam Dumps

Comprehensive and Detailed Step-by-Step Explanation:

Reference to IIA Standards:

Standard 2130 - Governance: Internal audit must assess compliance with applicable laws, regulations, and industry standards.

Compliance Auditing: These engagements assess whether the organization adheres to specific rules and regulations.

Reasoning:

Option C involves newly imposed health and safety regulations, making compliance auditing critical to ensure the organization avoids penalties or operational disruptions.

Option A pertains to financial reporting, typically addressed in assurance or financial audits.

Option B involves a new service launch, which may require consulting or operational audits but not necessarily compliance-focused.

Comprehensive and Detailed Step-by-Step Explanation:

Preventive System Controls: Identifying duplicate invoice numbers and dates is a robust preventive control, as it helps flag duplicate invoices before payment is processed.

Other Options:

Option A: Identical invoice amounts alone may not always indicate duplicates, as different invoices can share the same amount.

Option C: Manual reconciliations are detective controls, not preventive ones.

Thus, the correct answer is B.

Comprehensive and Detailed Step-by-Step Explanation:

Process Narratives and Maps: These provide a comprehensive view of the process, including descriptions of risks and controls, making them the most relevant for supporting risk assessments. They help identify gaps or weaknesses in the control environment.

Other Options:

Option A: Policies and procedures provide general guidance but lack the specificity needed for risk assessments.

Option C: Organizational charts are helpful for understanding roles but do not directly address risks and controls.

Thus, the correct answer is B.

Comprehensive and Detailed Step-by-Step Explanation:

Reference to IIA Standards:

Standard 1120 - Individual Objectivity: Internal auditors should avoid situations that impair their ability to provide unbiased assurance.

Practice Advisory 1130.A1-1: Objectivity is impaired if auditors audit activities they previously managed within the last 12 months.

Reasoning:

Option A is correct because the auditor's recent role in the audited area creates a conflict of interest and threatens objectivity.

Option B does not impair objectivity; leveraging prior knowledge is permissible if applied objectively.

Option C (consulting services two years prior) does not impair objectivity due to the elapsed time.

Mitigating Actions:

Auditors with recent involvement in an audited area should disclose the conflict and be reassigned to preserve objectivity.

Comprehensive and Detailed Step-by-Step Explanation:

Attribute Sampling: This method is used to evaluate compliance by determining the presence or absence of specific attributes (e.g., adherence to policies or procedures). It is most suitable for assessing yes/no questions or deviations in internal control testing.

Example: Checking whether purchase orders are properly approved as per policy.

Other Options:

Difference Estimation Sampling: Typically used for quantitative testing to estimate the difference between observed and expected values.

Probability-Proportional-to-Size Sampling: Focuses on monetary unit sampling and is commonly used in substantive testing to detect material misstatements.

Thus, the correct answer is A.