IIA IIA-CIA-Part2 Exam With Confidence Using Practice Dumps

Using the market price of the product for internal transfer pricing leads to the best decisions for the organization because it reflects the true economic value of the goods or services being transferred. This method promotes efficiency and fairness within the divisions.

Economic Value: Market price reflects the true economic value, ensuring that the internal transactions are conducted at fair and competitive prices.

Performance Measurement: It provides a consistent basis for evaluating the performance of different divisions, as they are measured against external market conditions.

Resource Allocation: Helps in optimal allocation of resources by ensuring that internal transactions are economically justified and comparable to external transactions.

According to IIA guidance on due professional care, internal auditors should perform thorough and adequate steps to verify the accuracy and legitimacy of transactions. When reviewing cash disbursements, it is essential to check the three-way match among the invoice, purchase order, and receiving report. This ensures that the payment is valid, authorized, and that the goods or services were actually received as ordered. This step is crucial in preventing and detecting errors and fraud, thereby ensuring that the audit findings are reliable and accurate.

IIA Standard 1220: Due Professional Care

IIA Practice Guide: Auditing Accounts Payable and Disbursements

According to IIA guidance, an internal audit activity that provides overall assurance on governance, risk, and control, advises and influences senior management, and leverages the organization's management of risk is best described as being in the "Managed" stage of internal audit maturity. This stage indicates a well-established internal audit function that is integrated into the organization's governance framework and plays a proactive role in risk management and strategic decision-making. References:

The IIA’s Maturity Model for the Internal Audit Activity.

The IIA’s Practice Guide on Internal Audit’s Role in Governance, Risk, and Control.