[Jan 07, 2024] Powerful IIA-CIA-Part1 PDF Dumps for IIA-CIA-Part1 Questions
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NEW QUESTION # 121
With regard to the internal audit activity's quality assurance and improvement program, which of the following topics would the chief audit executive include on the quarterly board meeting agenda?
- A. The list of audit engagements that will be assessed during the year.
- B. The number and qualifications of internal audit staff members assigned to perform internal assessments during the year.
- C. The compensation structure of the qualified assessment team.
- D. The scope and frequency of both internal and external quality assessments.
Answer: C
NEW QUESTION # 122
In which of the following functions would fraud be most likely to occur?
- A. Maintaining custody of inventory records.
- B. Collecting payments on accounts.
- C. Preparing customer statements.
- D. Approving changes to employee records.
Answer: B
NEW QUESTION # 123
In an assurance engagement of treasury operations, an internal auditor is required to consider all of the following issues except:
- A. The external auditors have indicated some difficulties in obtaining account confirmations.
- B. Due to the recent sale of a division, the amount of cash and marketable securities managed by the treasury department has increased by 350 percent.
- C. Treasury management has not instituted any risk management policies.
- D. The audit committee has requested assurance on the treasury department's compliance with a new policy on the use of financial instruments.
Answer: A
NEW QUESTION # 124
An organization's chief audit executive (CAE) determines that the internal audit staff does not have the requisite skills to conduct an audit of the financial derivatives area. Which of the following would be the best course of action for the CAE to follow?
- A. Determine the requisite knowledge needed, and obtain the proper training for auditors, even if the training will significantly push back the project's timeframe as outlined by the audit committee.
- B. Outsource the audit engagement to a qualified external auditing firm without burdening the audit committee with the decision.
- C. Employ the skills of a financial derivatives expert to consult on the project, and supplement the consulting with a local seminar on financial derivatives.
- D. Notify the audit committee of the problem, and assign the most competent auditors on staff to perform the audit engagement.
Answer: C
NEW QUESTION # 125
A computer system automatically locks a user's account after three unsuccessful attempts to log on. Which type of control does this scenario represent?
- A. Compensating control.
- B. Detective control.
- C. Preventive control.
- D. Corrective control.
Answer: C
NEW QUESTION # 126
At the beginning of fieldwork in an audit of investments, an internal auditor noted that the interest rate had declined significantly since the engagement work program was created. The auditor should:
- A. Consult with management to verify the interest rate change and proceed with the engagement.
- B. Determine the effect of the interest rate change and whether the program should be modified.
- C. Modify the audit program and proceed with the engagement.
- D. Proceed with the existing program since this was the original scope of work that was approved.
Answer: B
NEW QUESTION # 127
According to IIA guidance, which of the following are macro-level audit activities performed for an assurance engagement of the purchasing department?
Obtain and review all purchasing-related audit reports issued within the past year.
Meet with the quality assurance group to discuss its previous reports of any purchasing-related findings.
Review a memo written by the purchasing manager that outlines ongoing problems with the purchasing software.
Request a copy of the report from a purchasing audit conducted last year by an external service provider.
- A. 1 and 3.
- B. 2 and 4.
- C. 1 and 2.
- D. 3 and 4.
Answer: C
NEW QUESTION # 128
Which of the following is not true with regard to the internal audit charter?
- A. It provides a basis for evaluating the internal audit activity.
- B. It defines the authorities and responsibilities of the internal audit activity.
- C. It should be approved by senior management and the board.
- D. It specifies the minimum resources needed for the internal audit activity.
Answer: D
NEW QUESTION # 129
The internal auditor of a small manufacturer noted that the accounting department has insufficient staff to achieve proper segregation of duties. What type of controls would the auditor likely recommend to management to specifically address this problem?
- A. Directive.
- B. Preventive.
- C. Entity-level.
- D. Compensating.
Answer: B
NEW QUESTION # 130
During an internal audit,the internal auditor compares the employee turnover rate in the area being audited with the employee turnover rate in the organization as a whole.
This is an example of which of the following analytical auditing procedures?
- A. Benchmarking.
- B. Reasonableness test.
- C. Trend analysis.
- D. Regression analysis.
Answer: A
NEW QUESTION # 131
A new director was hired to lead the internal audit activity at a small start-up company. Which of the following assignments would impair the director's independence?
- A. Performing a pre-implementation review of the company's payroll application.
- B. Reviewing the company's policy for foreign currency translation adjustments for compliance with accounting standards.
- C. Preparing the financial statements for the company's defined contribution plan.
- D. Providing the COBIT framework as a possible IT management tool.
Answer: C
NEW QUESTION # 132
During a review of a division's operations, an internal auditor notes that sales and customer base are unchanged, while inventory and gross margin have increased significantly. Which of the following audit procedures would be most relevant in substantiating management's assertion that the gross margin increase is due to increased efficiency in manufacturing operations?
- A. Take a physical inventory of equipment to determine if there were significant changes.
- B. Obtain a physical count of inventory.
- C. Select a sample of finished goods inventory and trace raw materials cost back to purchase prices in order to determine the accuracy of the recorded raw materials price.
- D. For a sample of products, compare costs-per-unit this year to those of last year, test cost build-ups, and analyze standard cost variances.
Answer: D
NEW QUESTION # 133
In which of the following scenarios would the chief audit executive (CAE) be required to decline the assignment?
- A. There is no available expertise on the internal audit team to perform a consulting engagement.
- B. There is no expertise within the internal audit team for auditing an IT engagement.
- C. There is no expertise within the internal audit team for detecting and investigating fraud.
- D. The CAE would need to procure external services to deliver the internal audit assurance program.
Answer: C
NEW QUESTION # 134
According to IIA guidance, which of the following statements is true regarding ISO 31000?
- A. The framework is effective in addressing the organization's structure, size, and risk profile but not its culture objectives.
- B. The key principles approach checks whether each element of the risk management process is in place.
- C. A combination of the three primary approaches to the framework generally yields the most information despite the complexity
- D. The end point for improving an organization s approach to risk management should be a gap analysis that evaluates any changes.
Answer: D
NEW QUESTION # 135
Which of the following is most likely to impair the organizational independence of the internal audit activity?
- A. The CAE reports functionally to the CEO.
- B. The CAE managed the finance department for the past five years.
- C. The chief audit executive (CAE) reports administratively to the chief financial officer.
- D. The CAE oversees the effectiveness of the organization's risk management function.
Answer: A
NEW QUESTION # 136
When planning an audit engagement, what should an internal auditor first consider when assessing the risk of fraud in the area to be audited?
- A. Organizational structure.
- B. Management's risk appetite.
- C. Existence of evidence of fraud.
- D. Impact of and exposure to fraud.
Answer: D
NEW QUESTION # 137
A manufacturing organization discovers that the waste water released has failed to meet permitted limits.
Which control function will be least effective in correcting the issue?
- A. Performing a chemical analysis of the water,prior to discharge,for components specified in the permit.
- B. Diluting pollutants by flushing sinks and floor drains daily with large volumes of clean water.
- C. Establishing a preventive maintenance program for the pretreatment system.
- D. Posting signs that tell employees which substances may be disposed of via sinks and floor drains within the facility.
Answer: B
NEW QUESTION # 138
A major difference between enterprise risk management and traditional risk management lies in the narrow focus of traditional risk management on:
I. Property and liability risks.
II. Risks with insurance solutions.
III. Risks impacting organizational objectives.
- A. I and II only
- B. II and III only
- C. I, II, and III.
- D. I and III only
Answer: A
NEW QUESTION # 139
According to MA guidance, which of the following is the strongest indicator of deficiencies in the risk management process?
- A. Management's primary objective is minimizing changes to the structure and operation of the risk management process.
- B. Many aspects of the related enterprise risk management program are informal and undocumented.
- C. Separate evaluations of the risk management process were conducted, but the results were never integrated.
- D. The periodic evaluation of risk ratings is primarily dependent on subjective assessments.
Answer: B
NEW QUESTION # 140
Internal control processes in an organization require that all investments exceeding $20, 000 receive authorization from both the president and treasurer. After conducting a sample of these transactions, an auditor determined that 10 of the 500 investments in the sample had not included both required authorizations.
The sample has a five percent acceptable error rate. Based on this sample, which of the following actions should the auditor take?
- A. Complete a comprehensive review of the organization's investment activity and compare variations over prior years.
- B. Contact the organization's investment broker and confirm all investments.
- C. Determine that no further testing of investment authorizations is required.
- D. Confirm all of the investments with the organization's internal finance department.
Answer: C
Explanation:
Section: Volume D
Explanation/Reference:
NEW QUESTION # 141
What information should the internal quality assessment of the internal audit activity communicate to the chief audit executive?
- A. Performance appraisals of the internal audit staff.
- B. Confirmation that past audit recommendations have been implemented.
- C. Evaluation of the adequacy of internal audit policies and procedures.
- D. Detailed objectives for internal audit engagements.
Answer: C
Explanation:
Section: Volume D
NEW QUESTION # 142
Which of the following statements is correct regarding disclosure of conformance or nonconformance with the Standards?
- A. If it has been more than five years since the last external assessment was conducted, the Internal audit activity must cease indicating that it operates in conformance with the Standards.
- B. Once an external assessment validates conformance with the Standards, the internal audit activity may continue to use the statement until the next external assessment.
- C. The chief audit executive must disclose every instance of noncompliance with the Code of Ethics or the Standards.
- D. An internal audit activity that has been in existence fewer than five years cannot Indicate that it is operating in conformance with the Standards because it has not yet undergone an external assessment.
Answer: D
NEW QUESTION # 143
Which of the following is not an appropriate role for internal auditors after a disaster occurs?
- A. Recommend future improvements to the entity's business continuity plan.
- B. Monitor the effectiveness of the recovery and control of operations.
- C. Correct deficiencies of the entity's business continuity plan.
- D. Assist in the identification of lessons learned from the disaster and the recovery operations.
Answer: C
NEW QUESTION # 144
Which of the following practices, applied by the chief audit executive {CAE), most likely indicates an effective continuing professional educational program for the internal audit activity?
- A. The CAE requires auditors to periodically attest to the profession's Code of Ethics.
- B. The CAE encourages auditors to volunteer to support research work of the local professional institute.
- C. The CAE reminds auditors to ensure workpapers are completed for audit engagements.
- D. The CAE tasks internal auditors with coordinating assurance activities with other providers across the organization.
Answer: B
NEW QUESTION # 145
An internal auditor prepared a workpaper that consisted of a list of employee names and identification numbers as well as the following statement:
- "A statistical sample of 40 employee personnel files was selected to verify that they contain all documents required by company policy 501 (copy attached). No exceptions were noted."
- The auditor did not place any audit verification symbols on this workpaper.
Which of the following changes would most improve the auditor's workpaper?
- A. Listing of the actual documents examined for each employee.
- B. Justification for the sample size.
- C. Removal of the employee names to protect their confidentiality.
- D. Use of audit verification symbols to show that each file was examined.
Answer: B
NEW QUESTION # 146
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