Full IIA-CIA-Part1 Practice Test and 185 unique questions with explanations waiting just for you!
Certified Internal Dumps IIA-CIA-Part1 Exam for Full Questions - Exam Study Guide
NEW QUESTION 59
According to IIA guidance, which of the following statements is true when an internal auditor performs consulting services that improve an organization's operations?
- A. The services may preclude assurance services from the consulting engagement.
- B. The services must be aligned with those defined in the internal audit charter.
- C. The services impose no responsibility to communicate information other than to the engagement client.
- D. The services must not be performed by the same internal auditor who performed assurance services, in order to maintain objectivity.
Answer: D
NEW QUESTION 60
Two individuals are being considered for an audit team that is to perform a highly technical review.
Which of the following situations would preclude selection of the individual for the audit due to an objectivity concern?
I. Person A is a member of the internal audit staff and has the required technical skills. Person A participated in a controls review of the system to be audited when it was being developed.
II. Person B is a technical specialist who understands the audit area but is not a member of the internal audit staff. Although person B has personal credibility in the information systems department to be audited, person B works for another department in the organization.
- A. II only
- B. I only
- C. Both I and II.
- D. Neither I nor II.
Answer: D
Explanation:
Section: Volume A
NEW QUESTION 61
According to the Standards, which of the following statements best describes the required content of the chief audit executive's (CAE) report to senior management and the board on the internal audit activity (IAA)?
- A. The CAE must report on significant risk exposures, control issues, and governance issues.
- B. The CAE must report on auditors' continuing education activities, staffing changes, and
any outsourcing to external parties. - C. The CAE must report on policies, procedures, and best practices of the IAA.
- D. The CAE must report on quality assurance techniques, statistical analysis methods, and other analytical processes used.
Answer: A
NEW QUESTION 62
In which of the following circumstances would an internal auditor not need to search for other signs of fraud?
- A. There are several substantial weaknesses with the internal control structure.
- B. Management institutes a policy of paying vendors promptly in order to avoid incurring penalty charges.
- C. One of the employees seems to have had a dramatic increase in their standard of living.
- D. The organization has an unusually high increase in costs.
Answer: B
Explanation:
Section: Volume D
Explanation
NEW QUESTION 63
The chief audit executive (CAE) wants to ensure that there are sufficient resources
available to fulfill the responsibilities of the internal audit activity in the coming year. Which statement describes the most logical sequence of events for the CAE to undertake in order to achieve this objective?
- A. Confirm budget; review existing resources; obtain any new resources required; confirm new audit plan.
- B. Review prior year audit plan; review existing resources; confirm new audit plan; confirm budget.
- C. Confirm audit plan; confirm budget; review existing resources; identify outstanding resource requirements.
- D. Review results of prior year audit plan; adjust current plan accordingly; hire required resources; confirm budget.
Answer: C
NEW QUESTION 64
An internal auditor used a questionnaire during an interview to gather information about the nature of credit sales processing. The questionnaire did not cover some pertinent information offered by the person being interviewed, and the auditor did not document the potential problems for further investigation. The primary deficiency with the above process is that:
- A. A questionnaire was used in a situation where a structured interview should have been used.
- B. The auditor failed to consider the importance of the information offered.
- C. The use of a questionnaire precluded the auditor from documenting other information.
- D. The engagement program was incomplete.
Answer: B
NEW QUESTION 65
Which of the following is the most common way that occupational fraud is detected?
- A. External audits.
- B. Whistleblower hotline.
- C. Internal audits.
- D. Key controls.
Answer: B
NEW QUESTION 66
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 population of 492 entries are incorrect. To reach this assumption, the auditor has used a technique known as which of the following?
- A. Variability tolerance.
- B. Acceptance sampling.
- C. Ratio estimation.
- D. Stratification.
Answer: C
NEW QUESTION 67
An internal auditor is researching the laws and regulations related to a city's grant program. Which of the following procedures is least relevant to this task?
- A. Making inquiries of the audit committee about the nature of the grants.
- B. Reviewing prior-year workpapers and asking officials if there have been any changes.
- C. Reviewing applicable grant agreements.
- D. Discussing the matter with the city's chief financial officer, legal counsel, or grant administrators.
Answer: A
NEW QUESTION 68
Which of the following best describes an appropriate form of working paper standardization?
- A. Comprehensive data lists from information databases.
- B. Audit client review and approval.
- C. Uniform cross referencing system.
- D. Customized layouts for each specific audit area.
Answer: C
NEW QUESTION 69
Which of the following statements, if true, could justify an auditor's decision not to report governance-related control deficiencies to the audit committee?
- A. Management plans to initiate corrective action.
- B. Governance issues are complex and the auditor should rely on management's analysis of the extent of the problem.
- C. The amounts and the potential risks associated with the deficiencies are not material to the overall organization.
- D. The board of directors has a separate corporate governance committee.
Answer: C
NEW QUESTION 70
Which of the following is least likely to be considered material in an audit of a medium-sized organization?
- A. A violation of a government statute.
- B. An underpayment to the employee pension fund.
- C. Fraud resulting in a cash loss to the organization.
- D. A $1,000 overstatement of the accrued-vacation payable account.
Answer: D
Explanation:
Topic 4, Volume D
NEW QUESTION 71
Line management of a manufacturing operation requests an operational audit. They are seeking recommendations for policies and procedures to enhance control over the operation. What should the internal audit activity do?
- A. Turn down the engagement because an operational audit should not review policies and
procedures. - B. Review the effectiveness of current policies and procedures but avoid making control recommendations due to impaired objectivity.
- C. Perform the engagement and make appropriate recommendations for policies and procedures.
- D. Turn down the engagement because recommending controls would impair future objectivity regarding this client.
Answer: C
NEW QUESTION 72
Which of the following should be the primary objective of an audit of an entity's business continuity plan?
- A. Delegation of responsibilities for the plan.
- B. Relationship of the plan to risk exposures.
- C. Cost of testing and updating the plan.
- D. Efficiency of the planning procedures.
Answer: B
NEW QUESTION 73
What is audit risk?
- A. The amount of risk that is reduced through risk management operations.
- B. Internal and external risk factors that exist when there are no controls implemented.
- C. An incorrect conclusion based on evidence uncovered during an audit.
- D. The risk that remains after management has executed risk management activities.
Answer: C
Explanation:
Section: Volume D
NEW QUESTION 74
Which of the following activities best reflects the scope and status of the internal audit activity as defined in the internal audit policy statement?
- A. The audit manager refrains from assigning an auditor who was a former payroll clerk to conduct a payroll audit.
- B. The internal auditor reviews the physical access to merchandise during an inventory count.
- C. The audit manager conducts an internal quality assessment of the internal audit activity's adherence to the Standards.
- D. The board approves the annual performance evaluation of the chief audit executive.
Answer: B
Explanation:
Section: Volume E
NEW QUESTION 75
Which of the following is not an appropriate role for internal auditors after a disaster occurs?
- A. Monitor the effectiveness of the recovery and control of operations.
- B. Recommend future improvements to the entity's business continuity plan.
- C. Assist in the identification of lessons learned from the disaster and the recovery operations.
- D. Correct deficiencies of the entity's business continuity plan.
Answer: D
NEW QUESTION 76
Which of the following would provide the best guidance to a chief audit executive who is setting internal audit staff requirements?
- A. A review of audit staff education and training records.
- B. Information about the audit staff size and composition of comparable organizations.
- C. The results of the audit staff's most recent performance reviews.
- D. Results from discussions of audit needs with executive management and the audit committee.
Answer: D
Explanation:
Section: Volume E
NEW QUESTION 77
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