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

IIA IIA-CIA-PART1 Online Questions & Answers

• Question 151:

  Internal auditors who are concerned with potential risks due to the mishandling of records or transactions should take into consideration:

  A. The type and nature of the activities to be examined.
  B. Whether employees in key positions of trust are bonded.
  C. The history of losses suffered by the company.
  D. The results of prior risk assessments.
  A. The type and nature of the activities to be examined.

• Question 152:

  The top three sales representatives for a company consistently include non-allowable charges on their expense reports. Line management is reluctant to deny reimbursement of the charges for fear of losing the sales representatives. This situation has the greatest negative impact on which of the following internal control components?

  A. Monitoring.
  B. Control environment.
  C. Information and communication.
  D. Control activities.
  B. Control environment.

• Question 153:

  While performing an internal audit engagement, an auditor reviews a flowchart of the organization's purchasing function. Which of the following internal control weaknesses would the auditor be able to identify in the chart?

  A. That purchasing policies have not been updated.
  B. That supplier invoices are processed and paid before the goods are received.
  C. That the organization is not taking advantage of quantity discounts available from its suppliers.
  D. That authorization for payment of goods received has not been granted at the appropriate level.
  B. That supplier invoices are processed and paid before the goods are received.

• Question 154:

  Which of the following is an example of an impairment to an internal auditor's independence?

  A. An internal auditor delays reporting material financial statement audit findings until after his parents sell all of their stock in the company.
  B. Following the restructuring of the organization, the internal audit activity now reports functionally to the chief financial officer.
  C. A new member of the internal audit activity, who was the accounts payable supervisor for two years, is asked to consult on the implementation of a new accounts payable system.
  D. Believing there must be errors in a given balance sheet account, the internal auditor decides to expand his testing.
  B. Following the restructuring of the organization, the internal audit activity now reports functionally to the chief financial officer.

• Question 155:

  Which of the following techniques should an internal auditor use in order to conduct an effective interview?

  A. Use technical language to establish credibility with the employee being interviewed.
  B. Avoid straightforward questions to make the person being interviewed think before answering.
  C. Prepare the next question while the interviewee is responding to demonstrate preparedness.
  D. Appear confident but not arrogant during the interview to show professionalism.
  A. Use technical language to establish credibility with the employee being interviewed.

• Question 156:

  When developing the organization's first risk universe, which of the following would the chief audit executive be least likely to consider?

  A. The amount of risk that an organization is willing to seek or accept.
  B. The extent and degree of interdependency for identified key risks.
  C. The boundaries established to manage the amount of risk taken.
  D. The exposure to risks following management's risk responses.
  D. The exposure to risks following management's risk responses.

• Question 157:

  The chief audit executive (CAE) of a mid-sized pharmaceutical organization has operational responsibility for the regulatory compliance function. The audit committee requests an assessment of regulatory compliance. According to IIA guidance, which of the following is the CAE's best course of action?

  A. Have a proficient internal audit staff member perform the assessment and disclose the impairment in the audit report and to the board.
  B. Have a regulatory compliance staff member perform a self-assessment, to be reviewed by a proficient internal auditor.
  C. Have a proficient internal audit staff member perform the audit and report the results of the assessment directly to senior management and the board.
  D. Contract with a third-party entity or external auditor to complete the assessment and report the results to senior management and the board.
  D. Contract with a third-party entity or external auditor to complete the assessment and report the results to senior management and the board.

• Question 158:

  During an audit engagement of a large retail store, internal auditors noted significant discrepancies between available inventory and sales and suspect an abuse of cash register refunds and voids. Which of the following would be the most effective preventative control to reduce these losses?

  A. Ensure that returned merchandise is restocked to shelves or sent to the manufacturer by an independent employee.
  B. Call a sample of customers who returned merchandise to test the legitimacy of the returns and check refund amounts.
  C. Require that a manager use a reserved register code to approve voids or refunds.
  D. Analyze voids and refunds by employee, credit card number, and amount for unusual numbers, amounts, or patterns.
  C. Require that a manager use a reserved register code to approve voids or refunds.

• Question 159:

  A retail sales company has discontinued a product that normally sold for $100. During the first month of a sale of the product, a 20 percent discount was given. Later that sale price was reduced by an additional 40 percent. What was the overall discount from the original selling price?

  A. 60 percent.
  B. 52 percent.
  C. 48 percent.
  D. 30 percent.
  B. 52 percent.

• Question 160:

  Why is a code of ethics for the internal audit profession necessary?

  A. It ensures that all members of the profession possess the same level of competence.
  B. It provides auditors with protection from lawsuits.
  C. It guides internal auditors in their service to others.
  D. It requires auditors to exhibit loyalty to their organizations.
  C. It guides internal auditors in their service to others.