IIA IIA-CIA-PART1 Online Practice Questions and Exam Preparation

IIA IIA-CIA-PART1 Online Questions & Answers

• Question 1:

  Which of the following statements is not true?

  A. The nature of consulting services that are performed by the internal audit activity should be defined in the audit charter.
  B. It is inappropriate for internal auditors to provide consulting services relating to operations for which they had previous responsibilities.
  C. A party outside the internal audit activity should oversee assurance engagements for functions over which the chief audit executive has responsibility.
  D. The chief audit executive should decline a consulting engagement if the internal audit staff lacks the knowledge, skills, or other competencies needed to
  B. It is inappropriate for internal auditors to provide consulting services relating to operations for which they had previous responsibilities.

• Question 2:

  A chief audit executive (CAE) identifies that the internal audit activity lacks a necessary skill to perform a management request for a consulting engagement. According to IIA guidance, which of the following is the most appropriate action the CAE should take regarding the request?

  A. Assign the engagement to a more senior internal auditor.
  B. Decline the engagement request.
  C. Allow the internal auditors to acquire the needed skills while performing the engagement.
  D. Supervise the assigned internal auditors throughout the engagement.
  B. Decline the engagement request.

• Question 3:

  Which of the following are acceptable resources for a chief audit executive to use when developing a staffing plan?

  1. Co-sourcing arrangements.

  2. Employees from other areas of the organization.

  3. The organization's external auditors.

  4. The organization's audit committee members.

  A. 1 only
  B. 1 and 2 only
  C. 2 and 3 only D. 1, 2, and 4 only
  B. 1 and 2 only

• Question 4:

  During an audit engagement in an insurance company, an internal auditor discovered that senior management had purposely misclassi ed $200,000 in assets on financial statements submitted to regulatory authorities in order to avoid significant statutory penalties. To remain in compliance with the IIA Code of Ethics, what would be the most appropriate action for the auditor to take?

  A. Note the situation in the workpapers and inform the chief executive officer.
  B. Send an informative memo to the external auditors.
  C. Discuss the matter with audit management and ensure that the audit committee is informed.
  D. Report the matter to regulatory authorities since senior management is implicated.
  C. Discuss the matter with audit management and ensure that the audit committee is informed.

• Question 5:

  According to IIA guidance, the chief audit executive, board, and senior management must mutually agree on which of the following?

  A. Internal audit activity objectives and responsibilities.
  B. Audit engagements to be performed during the year.
  C. The items selected for detailed audit testing.
  D. staffing of the internal audit activity.
  B. Audit engagements to be performed during the year.

• Question 6:

  Noncompliance with which of the following would cause a control defficiency related to privacy protection practices?

  I- An organization's internal privacy policies.

  II-. Financial accounting standards.

  III-. Privacy laws and regulations.

  IV-. The Standards.

  A. I and III only
  B. II and IV only
  C. II, III, and IV only
  D. I, II, III, and IV.
  A. I and III only

• Question 7:

  According to the IIA Standards, independence and objectivity are achieved primarily through:

  A. Dual reporting to the board and management.
  B. Rotating auditors annually.
  C. Conducting only consulting engagements.
  D. Outsourcing the audit activity to external consultants.
  A. Dual reporting to the board and management.

• Question 8:

  Which of the following scenarios violates The IIA's standard regarding internal audit independence?

  A. The chief audit executive (CAE) reports on the internal audit activity's day-to-day tasks and responsibilities to the CEO.
  B. An assessment of the risk management function is reviewed by an outside consulting firm because the CAE is temporarily fulfilling the role of risk manager.
  C. The CAE regularly meets with the organization's chief risk officer, who validates all reported audit findings and dictates which will be included in the package to the audit committee.
  D. The internal audit activity will experience staffing shortages for the next six months due to planned and unplanned leaves of absence; therefore, the CAE proposed including fewer audits in the annual audit plan compared to the previous financial year.
  C. The CAE regularly meets with the organization's chief risk officer, who validates all reported audit findings and dictates which will be included in the package to the audit committee.

• Question 9:

  An organization that outsources much of its internal audit work to an external service provider is planning for an external quality assessment. Which of the following options would accomplish this task and be in conformance with the Standards?

  A. External industry associate that performed a similar review for a supplier of the organization.
  B. A team from an independent entity that previously employed the chief audit executive of the organization.
  C. A team under the direction of the organization's chief audit executive with validation by a former manager of the internal audit activity.
  D. The same external service provider because of its competency and experience with the organization.
  A. External industry associate that performed a similar review for a supplier of the organization.

• Question 10:

  A bakery chain has a statistical model that can be used to predict daily sales at individual stores based on a direct relationship to the cost of ingredients used and an inverse relationship to rainy days. What conditions would an auditor look for as an indicator of employee theft of food from a specific store?

  A. On a rainy day, total sales are greater than expected when compared to the cost of ingredients used.
  B. On a sunny day, total sales are less than expected when compared to the cost of ingredients used.
  C. Both total sales and cost of ingredients used are greater than expected.
  D. Both total sales and cost of ingredients used are less than expected.
  B. On a sunny day, total sales are less than expected when compared to the cost of ingredients used.