IIA Certified Internal IIA-CIA-PART1 Questions & Answers

• Question 41:

  According to IIA guidance, which of the following is an area in which the internal auditor should be proficient?

  A. Management principles.

  B. Computerized information systems.

  C. Internal audit standards, procedures, and techniques.

  D. Fundamentals of accounting, economics, and finance.

  Correct Answer: C

• Question 42:

  A chief audit executive (CAE) is selecting an internal audit team to perform an audit engagement that requires a high level of knowledge in the areas of finance, investment portfolio management, and taxation. If neither the CAE nor the existing internal audit staff possess the required knowledge, which of the following actions should the CAE take?

  A. Postpone the audit until the CAE hires internal audit staff with the required knowledge.

  B. Ask the audit committee to decide the course of action.

  C. Select the most experienced auditors in the department to perform the engagement.

  D. Hire consultants who possess the required knowledge to perform the engagement.

  Correct Answer: D

• Question 43:

  Which of the following enhances the independence of the internal audit activity?

  A. The chief audit executive (CAE) approves the annual internal audit plan.

  B. The CAE administratively reports to the board.

  C. The audit committee approves the CAE's annual salary increase.

  D. The chief executive officer approves the internal audit charter.

  Correct Answer: C

• Question 44:

  Which of the following statements describes impairment to the internal auditor's objectivity?

  A. An internal auditor reviews a purchasing agent's contract drafts prior to their execution.

  B. An internal auditor reduces the scope of an audit engagement due to budget restrictions.

  C. An internal auditor receives a promotional gift that is available to the organization's employees.

  D. An internal auditor performs an assessment of the operations for which he was recently responsible.

  Correct Answer: D

• Question 45:

  Which of the following best ensures the independence of the internal audit activity?

  1.

  The CEO and audit committee review and endorse any changes to the approved audit plan on an annual basis.

  2.

  The audit committee reviews the performance of the chief audit executive (CAE) periodically.

  3.

  The internal audit charter requires the CAE to report functionally to the audit committee.

  A. 3 only

  B. 1 and 2 only

  C. 2 and 3 only

  D. 1, 2, and 3

  Correct Answer: C

• Question 46:

  An internal auditor is reviewing the accounts receivable when she discovers account balances more than three years old. The auditor was previously supervising the area during this time, and she subsequently advises the chief audit executive (CAE) of a potential conflict.

  Which of the following is the most appropriate course of action for the CAE to take?

  A. Replace the auditor with another audit staff member.

  B. Continue with the present auditor, as more than one year has passed.

  C. Withdraw the audit team and outsource the financial audit of the division.

  D. Work with the division's management to resolve the situation.

  Correct Answer: A

• Question 47:

  Sometimes, internal audit staff may partner with operating managers to rank risks. Which of the following outcomes may be the most beneficial aspects of this strategy?

  1.

  Reappraising risks levels.

  2.

  Providing accurate information to management.

  3.

  Marketing the internal audit activity.

  4.

  Planning safeguards for assets in high-risk areas.

  A. 1 and 2.

  B. 1 and 3.

  C. 2 and 3.

  D. 3 and 4.

  Correct Answer: B

• Question 48:

  Which of the following statements is true regarding assurance services provided to clients outside of the organization?

  A. Assurance services for outside clients are not covered under the internal audit charter.

  B. Assurance services for outside clients must be approved on a case-by-case basis by the board of directors.

  C. The nature of assurance services for outside clients should be defined in the internal audit charter.

  D. The nature of assurance services for outside clients is the same as for internal clients.

  Correct Answer: C

• Question 49:

  Which of the following is an activity that an internal auditor must not perform?

  A. Establish and provide continuing assurance on an anti-money laundering program for new hires.

  B. Survey employees for their understanding of anti-money laundering practices.

  C. Provide assurance for the effectiveness of anti-money laundering training.

  D. Assess the risk of being fined for ineffective anti-money laundering practices.

  Correct Answer: A

• Question 50:

  An internal auditor is using a spreadsheet application to review a cash flow forecast prepared by management.

  Which of the following correctly identifies the type of evidence this information represents?

  A. Competent, corroborative evidence of future working capital requirements.

  B. Sufficient, analytical evidence of the cash flow position at a given point of time in the future.

  C. Competent, documentary evidence of future cash flow changes within the organization.

  D. Sufficient, circumstantial evidence of the future solvency of the organization.

  Correct Answer: C