IIA-CIA-Part1 | The Secret Of IIA IIA-CIA-Part1 Practice Question

NEW QUESTION 1
An organization is facing a financial downturn and needs to impose major budget reductions to all departments. According to MA guidance, which of the following actions is most appropriate for the board to take to evaluate the potential impact on the internal audit activity?

• A. Ask management to determine which internal audit engagements are lower risk and could be considered for removal from the annual audit plan.
• B. Ask appropriate stakeholders for their opinion on the potential impacts of reducing the scope of the internal audit plan.
• C. Ask the chief audit executive to determine whether budgetary limitations impede the ability of the internal audit activity to execute its responsibilities.
• D. Ask The human resources department to determine how the annual compensation and salary of the audit staff could be adjusted to achieve savings.

Answer: C

NEW QUESTION 2
An internal auditor needs to recommend a policy element to be included in an organization's code of ethics. Which of the following recommendations would be most effective?

• A. Ethics should vary with local customs in the organization's foreign operations.
• B. Whistleblowing should be discouraged because it can cause distrust among employees.
• C. Ethical behavior should be incorporated into performance evaluations.
• D. Senior management should be granted specific exemptions to the code of ethics.

Answer: C

NEW QUESTION 3
A chief audit executive (CAE) is reviewing the internal audit activity's performance and is concerned that the average number of revisions to findings is steadily rising, making it increasingly difficult to trace the finding to the supporting evidence and workpapers. According to MA guidance, which of the following elements of the internal audit activity's quality assurance and improvement program would provide the CAE with the most helpful insight into the cause of this problem?

• A. The overall effectiveness of the internal audit activity's periodic self assessments.
• B. The type of audit productivity and performance statistics reported.
• C. The adequacy of the day-to-day supervision and review process.
• D. The scope and frequency of external assessments.

Answer: C

NEW QUESTION 4
Which of the following is an example of a risk management avoidance response?

• A. Exiting a marketplace.
• B. Recalling a product.
• C. Obtaining product insurance.
• D. Outsourcing production.

Answer: A

NEW QUESTION 5
According to IIA guidance, which of the following should be included in the internal audit charter?

• A. The minimum resources and competencies needed for the internal audit activity.
• B. Identification of the organizational units where engagements are to be performed.
• C. Organizational relationships and reporting lines.
• D. Assigned responsibilities for designing and implementing controls.

Answer: C

NEW QUESTION 6
Which of the following is most likely to enhance an internal auditor's objectivity?

• A. An auditor is appropriately able to communicate results.
• B. An auditor performs his work free from interference.
• C. An auditor is unrestricted in determination of scope.
• D. An auditor avoids conflicts of interest.

Answer: D

NEW QUESTION 7
Which of the following types of social responsibilities is voluntary and guided purely by the organization's desire to make social contributions?

• A. The bottom of the pyramid responsibility.
• B. Innovative responsibility.
• C. Ethical responsibility.
• D. Discretionary responsibility.

Answer: C

NEW QUESTION 8
Which of the following best describes the misdirection of payments on accounts receivable to an employee's bank account?

• A. Fraud open on the books.
• B. Fraud hidden on the books.
• C. Fraud off the books.
• D. Fraud on the balance sheet.

Answer: C

NEW QUESTION 9
Management would like to self-assess the overall effectiveness of the controls in place for its 200-person manufacturing department. Which of the following client-facilitated approaches is likely to be the most efficient way to accomplish this objective?

• A. Workshops.
• B. Surveys.
• C. Interviews.
• D. Observation.

Answer: B

NEW QUESTION 10
Management is developing and implementing a risk and control framework for use throughout the organization. Which of the following elements should be included in the organization's control framework?
* 1. Appropriate levels of authority and responsibility.
* 2. Supervision of staff and appropriate review of work.
* 3. The seniority of management in the organization.
* 4. The ability to trace each transaction to an accountable and responsible individual.

• A. 1,2, and 3.
• B. 1.2, and 4.
• C. 1.3, and 4.
• D. 2, 3, and 4.

Answer: D

NEW QUESTION 11
In which of the following scenarios would the chief audit executive (CAE) be required to decline the assignment?

• A. The CAE would need to procure external services to deliver the internal audit assurance program.
• B. There is no expertise within the internal audit team for detecting and investigating fraud.
• C. There is no expertise within the internal audit team for auditing an IT engagement.
• D. There is no available expertise on the internal audit team to perform a consulting engagement.

Answer: B

NEW QUESTION 12
While performing an accounts payable engagement, a senior auditor wants to conduct several tests of controls for travel expenses. Which of the following actions are most appropriate for the senior auditor to undertake?
* 1. Ensure all tests use a random sampling technique.
* 2. Consider a judgmental approach for the sample size.
* 3. Assess testing errors through root cause analysis.
* 4. Ensure that the entire data set is tested.

• A. 1 and 2.
• B. 1 and 3.
• C. 2 and 3.
• D. 2 and 4.

Answer: C

NEW QUESTION 13
Which of the following scenarios best illustrates the principle of due professional care?

• A. An internal auditor evaluates the significant risks arising from a consulting engagement.
• B. An internal auditor declares that he would have a conflict of interest in providing planned audit support.
• C. An internal auditor has been given sufficient authority to access documents needed to make an appraisal of an issue.
• D. An internal auditor uses technology-based audit techniques to ensure that all significant risks are identified.

Answer: A

NEW QUESTION 14
Which of the following is most likely to be considered a control weakness?

• A. Vendor invoice payment requests are accompanied by a purchase order and receiving report.
• B. Purchase orders are typed by the purchasing department using prenumbered forms.
• C. Buyers promptly update the official vendor listing as new supplier sources become known.
• D. Department managers initiate purchase requests that must be approved by the plant superintendent.

Answer: C

NEW QUESTION 15
The chief audit executive (CAE) of a small internal audit activity (IAA) performs all high-risk engagements on the annual audit plan to make use of his knowledge and experience and to maximize the efficient use of audit resources. Which of the following statements is most relevant regarding this practice?

• A. The CAE's work may be reviewed by any other experienced staff member within the IAA.
• B. The CAE's work should be reviewed by an individual with the appropriate background and knowledge.
• C. The CAE may self-review his work, provided he discloses this practice in the final report.
• D. The CAE should avoid performing engagements to ensure he is able to review all audit work objectively.

Answer: B

NEW QUESTION 16
Which of the following scenarios best illustrates a rationalization as the root cause of potential fraud?

• A. Managers who have been with the organization for several decades become aware that newly hired, younger managers are being moved more quickly into senior positions.
• B. The controller at a nationwide manufacturing company recently opted to no longer require two-week mandatory vacations for accounting staff.
• C. Security cameras that monitor cash handling at the register are not functioning.
• D. The organization is slowly phasing out three mature products that produce the highest commissions for the sales staff.

Answer: B

NEW QUESTION 17
According to The MA Code of Ethics, which of the following is one of the rules of conduct for objectivity?

• A. Internal auditors shall continually improve their proficiency and effectiveness and quality of their services.
• B. Internal auditors shall respect and contribute to legitimate and ethical objectives of the organization.
• C. Internal auditors shall not accept anything that may impair or be presumed to impair their professional judgment.
• D. Internal auditors shall be prudent in the use and protection of information acquired in the course of their duties.

Answer: C

NEW QUESTION 18
An internal auditor is conducting an assessment of the organization's fraud prevention program using the COSO enterprise risk management framework. According to this framework, which of the following activities would fall under the control environment component for preventing fraud?
* 1. The organization uses an automated authority approval matrix to control payments.
* 2. The organization has a whistleblower hotline that is available to employees.
* 3. Annually, every manager completes a comprehensive fraud assessment of his or her department.
* 4. Annually, the organization reviews and communicates the code of expected behavior.

• A. 1 and 2.
• B. 1 and 3.
• C. 2 and 3.
• D. 2 and 4.

Answer: D

NEW QUESTION 19
According to IIA guidance, which of the following are macro-level audit activities performed for an assurance engagement of the purchasing department?
* 1. Obtain and review all purchasing-related audit reports issued within the past year.
* 2. Meet with the quality assurance group to discuss its previous reports of any purchasing-related findings.
* 3. Review a memo written by the purchasing manager that outlines ongoing problems with the purchasing
software.
* 4. Request a copy of the report from a purchasing audit conducted last year by an external service provider.

• A. 1 and 2.
• B. 1 and 3.
• C. 2 and 4.
• D. 3 and 4.

Answer: A

NEW QUESTION 20
Which of the following control activities is the most effective to ensure users' levels of access are appropriate for their current roles?

• A. The human resources department generates a monthly list of terminated and transferred employees and requests IT to update the user access as required.
• B. Standardized user access profiles are developed and the appropriate access profiles are automatically assigned to new or transferred employees.
• C. System administrator rights are assigned to one user in each department who can update user access of terminated or transferred employees immediately.
• D. Department managers are required to perform periodic user access reviews of relevant systems and applications.

Answer: D

NEW QUESTION 21
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