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

IIA IIA-CIA-PART1 Online Questions & Answers

• Question 231:

  An internal auditor determined that the extrapolated error from a sample of transactions is greater than the tolerable error. To meet due professional care obligations, the auditor should do which of the following?

  A. Select and test additional samples to identify other errors.
  B. Use the extrapolated error as the audited value from the testing.
  C. Assess the risk that further errors may exist in the data set.
  D. Base the final audit opinion on the extrapolated error.
  A. Select and test additional samples to identify other errors.

• Question 232:

  The internal audit activity is planning a procurement audit and needs to obtain a thorough understanding of the subcontracting process, which can involve multiple individuals in multiple countries.

  Which of the following internal audit tools would be most effective to document the process and the key controls?

  A. Internal control checklist.
  B. Procurement employee survey.
  C. Cross-functional ow chart.
  D. Segregation of duties matrix.
  C. Cross-functional ow chart.

• Question 233:

  An internal audit activity uncovered a potential fraud during a recent engagement and will perform an investigative fraud audit. How would the internal audit activity demonstrate that the team has the necessary experience to perform this engagement?

  A. The team must consist of internal auditors who have previous fraud auditing experience and possess a certification in fraud examination.
  B. The internal audit activity must outsource the engagement to an independent, qualified consulting firm specializing in fraud investigations.
  C. The team must collectively possess the necessary audit and fraud skills, although not every member of the team would need previous experience conducting an investigation.
  D. The team should include at least one individual in the area of the suspected fraud to provide valuable advice, due to their familiarity with the business processes, although it is not required.
  B. The internal audit activity must outsource the engagement to an independent, qualified consulting firm specializing in fraud investigations.

• Question 234:

  During an audit of the purchasing department, an internal auditor identifies significant issues that could affect the organization's financial reporting. Management disagrees with the audit results. Which of the following responses best demonstrates the internal auditor has the necessary competencies related to professional judgement and conflict management?

  A. The auditor maintains his convictions and continues to proceed with the review process despite management's concerns related to the results.
  B. The auditor bypasses management, discusses the results with the board, and seeks the board's input on how best to address the recommendations.
  C. The auditor consults with other members of the audit team, and together they develop alternative recommendations that management may be more likely to accept.
  D. The auditor meets with management to discuss the results and obtain a better understanding of the specific concerns.
  D. The auditor meets with management to discuss the results and obtain a better understanding of the specific concerns.

• Question 235:

  Which of the following reporting relationships results in the greatest impairment to the independence of the chief audit executive (CAE)?

  A. The CAE reports administratively and functionally to the president.
  B. The CAE reports administratively to the president and functionally to the board.
  C. The CAE reports administratively to the chief financial officer and functionally to the president.
  D. The CAE reports administratively to the audit committee and functionally to the chief operating officer.
  A. The CAE reports administratively and functionally to the president.

• Question 236:

  An internal auditor in a busy internal audit activity reviews her continuing professional development records toward the end of the year and is concerned to find she has undertaken limited training and formal professional development. Which of the following actions is the most appropriate for her to take?

  A. Remind the chief audit executive (CAE) that he is responsible for her continuing professional development and needs to address the issue.
  B. Contact her professional organization and explain that she does not need formal professional development, as she is being developed suficiently through undertaking audit engagements.
  C. Accept that she is unlikely to meet continuing professional development requirements but look to attend training courses at the next available time.
  D. Accept that she is responsible for her own continuing professional development, develop a professional plan, and discuss it with the CAE.
  D. Accept that she is responsible for her own continuing professional development, develop a professional plan, and discuss it with the CAE.

• Question 237:

  When developing the annual audit plan and reviewing risk assessment priorities, a chief audit executive should always identify the:

  A. Potential recommendations for each auditable activity.
  B. Persons to whom engagement reports will be communicated.
  C. Engagement procedures to be used during the engagements.
  D. Internal audit resources required to achieve the audit plan.
  D. Internal audit resources required to achieve the audit plan.

• Question 238:

  What is the primary purpose of a risk management program?

  A. Reduce risk to a tolerable level.
  B. Reduce all risks regardless of costs.
  C. Transfer all risks to external third parties.
  D. Identify every significant risk to avoid it.
  A. Reduce risk to a tolerable level.

• Question 239:

  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
  C. 2 and 3 only

• Question 240:

  Which of the following best ensures an internal audit activity has the ability to render impartial and unbiased assessments?

  A. Organizational status and objectivity.
  B. Supervision of the chief audit executive (CAE) by senior management.
  C. Organizational knowledge and skills.
  D. CAE certification.
  A. Organizational status and objectivity.