IIA Certified Internal IIA-CIA-PART1 Questions & Answers

• Question 521:

  After several years in the engineering department, an engineer was transferred to the internal audit department. One month later, the new auditor was assigned to an assurance engagement for the engineering department. When the auditor's former engineering supervisor suggested a change in the sample selection method, the auditor consulted with the audit supervisor. They determined that the suggested method would not be as representative and that the original selection method should be used. In this situation, the auditor:

  A. Maintained an independent mental attitude and is therefore objective.

  B. Has subordinated professional judgment, and objectivity is therefore impaired.

  C. Does not have objectivity since the auditor recently transferred from the engineering department.

  D. Does not have independent organizational status since the auditor recently transferred from the engineering department.

  Correct Answer: C

• Question 522:

  A code of business conduct provides?

  A. A fraud avoidance plan that does not explicitly describe punishments for violations.

  B. A passive method of fraud deterrence.

  C. A program to anonymously report irregularities to authorities.

  D. An alternative to "tone at the top" programs.

  Correct Answer: B

• Question 523:

  Which of the following measurements could an auditor use in an audit of the efficiency of a motor vehicle inspection facility?

  A. The total number of cars approved.

  B. The ratio of cars rejected to total cars inspected.

  C. The number of cars inspected per inspection agent.

  D. The average amount of fees collected per cashier.

  Correct Answer: C

• Question 524:

  Which of the following corporate travel policies is least likely to be cost-effective?

  A. Negotiating corporate agreements with hotels, airlines, and car rental firms.

  B. Tracking credits for canceled airline reservations.

  C. Selecting the least expensive airline travel available, without regard to total travel time and distance.

  D. Traveling to facilities in tourist areas during the off-season when possible.

  Correct Answer: C

• Question 525:

  Which of the following characteristics could indicate high risk?

  A. Management decisions are made by a committee of mid to higher level management personnel.

  B. The company is not in a rapidly growing industry.

  C. The company's profitability is lower than the industry norm.

  D. Management turnover has been very low.

  Correct Answer: C

• Question 526:

  An auditor is using audit software to check inventory accuracy. Which of the following would be an indicator of poor input edit controls?

  A. Negative quantities on hand.

  B. Total dollar values of zero for some parts.

  C. Alpha characters in the field for order lead time.

  D. Reorder levels set too high.

  Correct Answer: C

• Question 527:

  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.

  I only

  B.

  II only

  C.

  Both I and II.

  D.

  Neither I nor II.

  Correct Answer: D

• Question 528:

  Management has requested that an internal auditor serve as member of a task force that will review current receivables practices and make recommendations to improve processes. Which of the following is the most appropriate response by the internal auditor?

  A. Accept the assignment provided that such consulting services are defined in the charter.

  B. Decline the assignment because participation on task forces will impair the auditor's objectivity in future audit engagements.

  C. Accept the assignment if the auditor believes that it will not impair objectivity in future audit engagements.

  D. Do not accept the assignment because the assignment is not part of an approved audit plan.

  Correct Answer: A

• Question 529:

  Senior management at a financial institution has received allegations of fraud at its derivatives trading desk and has asked the internal audit activity to investigate and issue a report concerning the allegations. The internal audit activity has not yet developed sufficient proficiency regarding derivatives trading to conduct a thorough fraud investigation in this area. Which of the following courses of action should the chief audit executive (CAE) take to comply with the Standards?

  A. Engage the former head of the institution's derivatives trading desk to perform the investigation and submit a report with supporting documentation to the CAE.

  B. Request that senior management allow a delay of the fraud investigation until the internal audit activity's on-staff certified fraud examiner is able to obtain the appropriate training regarding the analysis of derivatives trading.

  C. Request that senior management exclude the internal audit activity from the investigation completely and instead contract with an external certified fraud examiner with derivatives experience to perform all aspects of the investigation and subsequent reporting.

  D. Contract with an external certified fraud examiner with derivatives experience to perform the investigation and subsequent reporting, with the chief audit executive approving the scope of the investigation and evaluating the adequacy of the work performed.

  Correct Answer: D

• Question 530:

  Which of the following describes a control weakness?

  A. Purchasing procedures are well designed and are followed unless otherwise directed by the purchasing supervisor.

  B. Pre-numbered blank purchase orders are secured within the purchasing department.

  C. Normal operational purchases fall in the range from $500 to $1, 000 with two signatures required for purchases over $1, 000.

  D. The purchasing agent invests in a publicly traded mutual fund that lists the stock of one of the company's suppliers in its portfolio.

  Correct Answer: A