IIA-CIA-Part1 Certification – Valid Exam Dumps Questions Study Guide! (Updated 463 Questions)
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NEW QUESTION 44
Which of the following would be the best source of information for a chief audit executive to use in planning future audit staff requirements?
- A. Interviews with existing audit staff.
- B. Review of audit staff education and training records.
- C. Review of audit staff size and composition of similar-sized companies in the same industry.
- D. Discussions of audit needs with executive management and the audit committee.
Answer: D
NEW QUESTION 45
When dealing with various stakeholders which of the following is true regarding an internal auditor's responsibility to remain objective and independent?
- A. The internal auditor may initially disagree with management s acceptance of a risk, but reevaluate and agree with management's judgment after further discussion
- B. Some audit issues may remain unremediated and unreported if management will accept recommendations that the internal auditor deems more important
- C. When deciding between conflicting reports of a control's performance from a control operator and the operator's manager the internal auditor should generally believe the manager
- D. When working on business unit audits it is sometimes sufficient for the internal auditor to report deficiencies only to the unit manager when remediation is not complex
Answer: A
NEW QUESTION 46
A major corporation is considering significant organizational changes.
Which of the following groups would not be responsible for implementing these changes?
- A. Common stockholders.
- B. Senior management.
- C. Employees.
- D. Outside consultants.
Answer: A
NEW QUESTION 47
The audit process used by the internal audit activity of a large wholesale clothing company does not include an engagement letter or project approval document. The most serious consequence of this deficiency in the process is that the:
- A. Audit schedule may not be optimal from the engagement client's perspective.
- B. Audit objectives may not be understood by management of the area being audited.
- C. Audit resources may not be sufficient.
- D. Audit plan priority may have changed.
Answer: B
NEW QUESTION 48
According to IIA guidance, which of the following statements describes one of the similarities between assurance and consulting services?
- A. When planning assurance and consulting engagements, internal auditors must consider the strategies and objectives of the activity being reviewed.
- B. Both assurance and consulting services generally involve the internal auditor, the area under review, senior management, and the board.
- C. Internal auditors determine the engagement objectives, scope, and work program for both assurance and consulting services.
- D. Internal auditors must not provide assurance or consulting services for an activity for which they had responsibility within the previous year.
Answer: A
NEW QUESTION 49
When planning the work program for an assurance engagement, an internal auditor should first review the department's business objectives and then:
- A. Review controls.
- B. Evaluate vulnerabilities.
- C. Identify risks.
- D. Determine scope.
Answer: C
NEW QUESTION 50
In advance of a preliminary survey, a chief audit executive sends a memorandum and questionnaire to the supervisors of the department to be audited. What is the most likely result of that procedure?
- A. It creates apprehension about the audit engagement.
- B. It involves the engagement client's supervisory personnel in the audit.
- C. It is an uneconomical approach to obtaining information.
- D. It is only useful for audits of distant locations.
Answer: B
NEW QUESTION 51
An internal auditor pays to participate in the company's annual golf tournament, which is held outside of normal business hours. The auditor wins the putting contest and is awarded an all-expense-paid weekend vacation. According to the IIA Code of Ethics regarding objectivity, the auditor's best course of action would be to:
- A. Accept the prize because the auditor received no special treatment.
- B. Accept the prize because the event was held outside of normal business hours.
- C. Refuse the prize because it represents an impairment to objectivity.
- D. Refuse the prize because the amount is significant.
Answer: A
NEW QUESTION 52
An auditor identifies three errors in the sample of 25 entries selected for review (a 12 percent error rate). Based on this result,the auditor assumes that approximately 59 of the total populationof 492 entries are incorrect. To reach this assumption,the auditor has used a technique known as which of the following?
- A. Acceptance sampling.
- B. Stratification.
- C. Variability tolerance.
- D. Ratio estimation.
Answer: D
NEW QUESTION 53
When developing an effective risk-based plan to determine audit priorities, an internal audit activity should start by:
- A. Identifying risks to the organization's operations.
- B. Prioritizing known risks.
- C. Reviewing organizational objectives.
- D. Observing and analyzing controls.
Answer: C
Explanation:
Section: Volume B
NEW QUESTION 54
An internal audit activity (IAA) provided assurance services for an activity it was responsible for during the preceding year.
As a result, which IIA Code of Ethics principle is presumed to be impaired?
- A. Independence.
- B. Flexibility.
- C. Competence.
- D. Objectivity.
Answer: D
Explanation:
Section: Volume E
NEW QUESTION 55
According to IIA guidance, which of the following statements is true regarding the reporting of results from an external quality assessment of the internal audit activity?
- A. The external assessment results are reported upon completion in confidence directly to the board, and senior management is advised only of the recommendations and improvement action plans.
- B. The external assessment results are communicated upon completion to senior management and the board, but action plans for recommended improvements do not have to be reported.
- C. The results of self-assessments with independent external validation are shared with the board upon completion, and monitoring of recommended improvements must be reported monthly.
- D. The requirements for reporting quality assessment results are the same for external assessments and self-assessments with independent external validation.
Answer: C
NEW QUESTION 56
Regarding assurance and consulting services provided by the internal audit activity which of the following statements is correct?
- A. The nature and scope of a consulting engagement are determined by the internal audit activity based on its risk assessment
- B. The assurance engagement process ends with reporting
- C. Both assurance services and consulting services can be focused on controls or performance or both
- D. The nature and scope of an assurance engagement are subject to agreement with management of the area under review
Answer: B
NEW QUESTION 57
During an audit of a major contract, an internal auditor finds that actual hours and dollars billed are consistently at or near budgeted amounts. This condition is a red flag for which of the following procurement fraud schemes?
- A. Bid rotation.
- B. Cost mischarging.
- C. Fictitious vendor.
- D. Defective pricing.
Answer: B
NEW QUESTION 58
Which of the following statements is true regarding control activities'?
- A. Control activities are defined by management through risk mitigation strategies
- B. If two organizations have identical objectives and structures their control activities would be the same
- C. Control activities should be defined for all business processes
- D. Organizations that are less regulated generally have more complex control activities than highly regulated organizations
Answer: C
NEW QUESTION 59
Which of the following components influences the risk consciousness of an organization's people and is the basis for all other components of enterprise risk management?
- A. Information and Communication.
- B. Risk Assessment.
- C. Internal Environment.
- D. Objective setting.
Answer: C
NEW QUESTION 60
A high-volume retailer of consumer goods has used point-of-sale data to record sales and update inventory records for several years. When price changes are scheduled, corporate headquarters downloads a price change file to a computer server system at each store. Each store's assistant manager is responsible for checking the server for downloads and running the program that updates the store's price file at the authorized price update time. In comparison with having headquarters initiate the price update centrally, this approach to price updating will most likely:
- A. Decrease the risk that customers will be undercharged consistently for sales items.
- B. Increase the risk that item prices will sometimes be inaccurate.
- C. Decrease the risk that item prices will sometimes be inaccurate.
- D. Increase the risk that customers will be undercharged consistently for sales items.
Answer: B
Explanation:
Section: Volume A
NEW QUESTION 61
Which of the following actions would have the greatest impact on the effectiveness of the internal audit activity?
- A. Appropriate definition of internal audit scope and responsibility in the charter.
- B. Appropriate compliance coverage in the annual audit plan.
- C. Assurance of internal audit objectivity and organizational independence by the board.
- D. Annual review of the audit charter by management.
Answer: A
NEW QUESTION 62
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 scope and frequency of external assessments.
- B. The overall effectiveness of the internal audit activity's periodic self assessments.
- C. The type of audit productivity and performance statistics reported.
- D. The adequacy of the day-to-day supervision and review process.
Answer: D
NEW QUESTION 63
A multinational organization has asked the internal audit activity to assist in setting up the organization's risk management system. The chief audit executive (CAE) agrees to take on the engagement as a consultant.
Which of the following tasks is appropriate for the CAE to undertake?
- A. Establish the degree of risk appetite for management to accept.
- B. Determine the number of significant risks for management to report to the board.
- C. Coordinate and facilitate risk workshops for management to attend.
- D. Set risk indicators and mitigation plans for management to implement
Answer: C
NEW QUESTION 64
Which of the following risk management activities is most appropriate for an internal auditor to undertake?
- A. Impose risk management processes.
- B. Review the management of key risks.
- C. Coordinate risk management activities.
- D. Implement risk responses on management's behalf.
Answer: B
NEW QUESTION 65
In which of the following situations would the organizational independence of an internal audit activity be impaired?
- A. Scope limitations are imposed on internal audits.
- B. The chief audit executive reports administratively to the CEO.
- C. The compensation committee of the board approves the remuneration of the chief audit executive.
- D. The internal audit activity provides assurance services for an activity for which the engagement supervisor had responsibility within the previous year.
Answer: A
NEW QUESTION 66
According to NA guidance, which of the following describes the primary reason to implement environmental and social safeguards within an organization?
- A. To facilitate the conduct of risk assessment.
- B. To fulfill regulatory and compliance requirements.
- C. To achieve and maintain sustainable development.
- D. To enable Triple Bottom Line reporting capability.
Answer: D
NEW QUESTION 67
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