IIA Certified Internal IIA-CIA-PART1 Questions & Answers

• Question 21:

  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. Preparing the financial statements for the company's defined contribution plan.

  B. Performing a pre-implementation review of the company's payroll application.

  C. Providing the COBIT framework as a possible IT management tool.

  D. Reviewing the company's policy for foreign currency translation adjustments for compliance with accounting standards.

  Correct Answer: A

• Question 22:

  A former line supervisor from the Financial Services Department has completed six months of a two-year development opportunity with the internal audit activity (IAA). She is assigned to a team that will audit the organization's payroll function, which is managed by the Human Resources Department. Which of the following statements is most relevant regarding her independence and objectivity with respect to the payroll audit?

  A. She may participate, but only after she has completed one year with the IAA.

  B. She may participate, because she did not previously work in the Human Resources Department.

  C. She may participate, but she must be supervised by the auditor in charge.

  D. She may participate for training purposes, to build her knowledge of the IAA.

  Correct Answer: B

• Question 23:

  An internal audit charter should do which of the following?

  A. Outline the schedule of future audits.

  B. Define the scope of internal audit activities.

  C. Establish the size of the internal audit activity.

  D. Communicate the internal audit activity's goals.

  Correct Answer: B

• Question 24:

  Which of the following are core responsibilities to be included in the internal audit charter?

  1.

  Review reliability and integrity of financial and operating information and the means used to identify, measure, classify, and report such information.

  2.

  Determine the adequacy and effectiveness of the organization's systems of internal accounting and operating controls.

  3.

  Participate in the planning and performance of audits of potential acquisitions with the organization's outside accountants and other members of the corporate staff.

  4.

  Report to those members of management who should be informed of results of audit examinations, the audit opinions formed, and the recommendations made.

  A. 1 and 2.

  B. 1 and 4.

  C. 2 and 3.

  D. 2 and 4.

  Correct Answer: A

• Question 25:

  An assurance mapping exercise helps an organization do which of the following?

  1.

  Provide assurance to stakeholders that risks are managed and reported, and regulatory and legal obligations are met.

  2.

  Fulfill best practices in the industry.

  3.

  Identify and address any gaps in the risk management process.

  4.

  Identify fraud.

  A. 1 and 4.

  B. 1 and 3.

  C. 2 and 3.

  D. 3 and 4.

  Correct Answer: B

• Question 26:

  According to IIA guidance, which of the following statements about working papers is false?

  A. They assist in the implementation of recommendations.

  B. They provide support for communication to third parties.

  C. They demonstrate compliance with auditing standards.

  D. They contribute to development of the internal audit staff.

  Correct Answer: A

• Question 27:

  An auditor in charge was reviewing the workpapers submitted by a newly hired internal auditor. She noted that the new auditor's analytical work did not include any rating or quantification of the risk assessment results, and she returned the workpapers for correction. Which section of the workpapers will the new auditor need to modify?

  A. Condition section.

  B. Criteria section.

  C. Effect section.

  D. Cause section.

  Correct Answer: C

• Question 28:

  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. Ratio estimation.

  C. Stratification.

  D. Acceptance sampling.

  Correct Answer: B

• Question 29:

  Click the Exhibit.

  

  Internal auditors are asked to keep track of how many hours per day they spend planning the audit, conducting the engagement, and writing the audit report. The data for two days has been collected as follows:

  Day 1 Day 2 Planning the audit 2 hours 3 hours Conducting the engagement 1 hour 1 hour Writing the audit report 2 hours 4 hours

  Which of the following graphs depicts the data accurately?

  A. Graph A only

  B. Graph B only

  C. Both A and B.

  D. Neither A nor B.

  Correct Answer: C

• Question 30:

  Non-statistical sampling does not require which of the following?

  A. The sample to be representative of the population.

  B. The sample to be selected haphazardly.

  C. A smaller sample size than if selected using statistical sampling.

  D. Projecting the results to the population.

  Correct Answer: C