IIA-CIA-Part2 Exam - Topic 4 Question 98 Discussion

Actual exam question for IIA's IIA-CIA-Part2 exam

Question #: 98
Topic #: 4

Which of the following engagements is likely to be most appropriate for an organization that is planning an acquisition?

AA performance engagement.

BA system security engagement.

CA due diligence engagement.

DA compliance engagement.

Show Suggested Answer

Suggested Answer: C

Due diligence engagements are crucial when planning an acquisition, as they evaluate the financial, operational, and legal aspects of the target entity. This ensures informed decision-making and minimizes acquisition risks. Performance engagements (Option A) focus on efficiency and effectiveness of operations, while system security engagements (Option B) and compliance engagements (Option D) do not address the comprehensive assessment required for acquisitions. The CIA syllabus emphasizes due diligence as a specialized type of consulting engagement (Part 2: Section II).

by Tenesha at Mar 08, 2025, 07:58 PM

Limited Time Offer

25%

Off

Get Premium IIA-CIA-Part2 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Willodean

3 months ago

Surprised that due diligence is the clear winner here!

upvoted 0 times

...

Aileen

3 months ago

Performance engagement is also relevant, but not the top choice.

upvoted 0 times

...

Chantay

4 months ago

Really? I thought compliance would be more important.

upvoted 0 times

...

Gwen

4 months ago

Totally agree, due diligence is a must!

upvoted 0 times

...

Tequila

4 months ago

A due diligence engagement is key for acquisitions.

upvoted 0 times

...

Anisha

4 months ago

I’m leaning towards a compliance engagement, but I’m not confident that’s the right choice for this scenario.

upvoted 0 times

...

Gladis

5 months ago

A performance engagement sounds relevant too, but I feel like it’s more about efficiency rather than the specifics of an acquisition.

upvoted 0 times

...

Regenia

5 months ago

I remember practicing a question about due diligence before, and it seemed to focus on assessing risks and financial health, which fits here.

upvoted 0 times

...

Leota

5 months ago

I think a due diligence engagement makes the most sense for an acquisition, but I'm not entirely sure.

upvoted 0 times

...

Irene

5 months ago

I'm a little confused on the differences between a performance engagement and a compliance engagement. Can those be ruled out, or do I need to consider them more closely? I want to make sure I understand the nuances here.

upvoted 0 times

...

Avery

5 months ago

Okay, I've got it! For an acquisition, a due diligence engagement would be the most appropriate. That's where you really dig into the financials, operations, and overall health of the target company to make sure it's a good fit. Nailed it!

upvoted 0 times

...

Jenelle

5 months ago

Hmm, I'm a bit unsure about this one. I know a due diligence engagement is all about evaluating the target company, but I'm not sure if that's the most appropriate option here. Let me think this through a bit more.

upvoted 0 times

...

Anna

5 months ago

This seems like a straightforward question about the type of engagement that would be most appropriate for an organization planning an acquisition. I think the key is to focus on the purpose of the different engagement types.

upvoted 0 times

...

Domingo

11 months ago

I think a combination of due diligence and compliance engagements would be the most comprehensive approach for an acquisition.

upvoted 0 times

...

Patrick

11 months ago

That's a good point, Lisbeth. Compliance is important too, but due diligence specifically focuses on the acquisition process.

upvoted 0 times

...

Lisbeth

11 months ago

But wouldn't a compliance engagement also be important to ensure the organization is meeting all legal requirements?

upvoted 0 times

...

Hannah

11 months ago

I'm gonna have to go with option C, the due diligence engagement. It's like a supermarket sweep for companies - gotta make sure you're not bringing home any spoiled goods!

upvoted 0 times

...

Junita

12 months ago

Due diligence all the way! You don't want to end up like that guy who bought a company and found out they were secretly running a fight club in the basement, do you?

upvoted 0 times

Detra

10 months ago

B) A system security engagement.

upvoted 0 times

...

Ling

11 months ago

Definitely! Due diligence is crucial to avoid any surprises.

upvoted 0 times

...

Ceola

11 months ago

C) A due diligence engagement.

upvoted 0 times

...

Domingo

12 months ago

I agree with Patrick, due diligence is crucial to assess the risks and opportunities of the acquisition.

upvoted 0 times

...

Vicki

12 months ago

A due diligence engagement is the obvious choice here. I mean, do you really want to acquire a company without knowing what skeletons are hiding in their closet?

upvoted 0 times

...

Xochitl

12 months ago

Definitely a due diligence engagement. You need to know what you're getting into before you sign on the dotted line. Don't want any unpleasant surprises, am I right?

upvoted 0 times