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

IIA IIA-CIA-PART1 Online Questions & Answers

• Question 401:

  According to IIA guidance, who is responsible for ensuring that an organization's internal audit activity conducts an internal assessment?

  A. The board.
  B. External auditors.
  C. Senior management.
  D. The chief audit executive.
  D. The chief audit executive.

• Question 402:

  An organization's accounts payable function improved its internal controls significantly after it received an unsatisfactory audit report. When planning a follow-up audit of the function, what level of detection risk should be expected if the audit and sampling procedures used are unchanged from the prior audit?

  A. Detection risk is lower because control risk is lower.
  B. Detection risk is lower because control risk is higher.
  C. Detection risk is higher because control risk is lower.
  D. Detection risk is unchanged although control risk is lower.
  D. Detection risk is unchanged although control risk is lower.

• Question 403:

  Which of the following is not a role of the internal audit activity in facilitating risk identification and evaluation?

  A. Evaluating risk management processes.
  B. Recommending accountability for risk management.
  C. Providing assurance that risks are evaluated correctly.
  D. Supporting managers to identify ways to mitigate risks.
  B. Recommending accountability for risk management.

• Question 404:

  Which of the following specifications in an internal audit charter is the most important factor in the internal audit activity's independence?

  A. Description of internal audit activity's responsibilities.
  B. De nition of internal auditing.
  C. Statement of internal audit activity's authority.
  D. Description of internal audit activity's reporting structure.
  D. Description of internal audit activity's reporting structure.

• Question 405:

  An employee is more likely to commit fraud if which of the following red flags are present?

  1. The employee believes that he is being underpaid and deserves a higher salary.

  2. The employee is close to retirement and has expressed a desire to take an expensive trip around the world.

  3. The employee has personal financial problems and seems very unhappy.

  4. The employee is spending much more time at the office than usual and has been asking about opportunities for professional advancement.

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

• Question 406:

  In an assurance engagement of treasury operations, an internal auditor is required to consider all of the following issues except:

  A. The audit committee has requested assurance on the treasury department's compliance with a new policy on the use of financial instruments.
  B. Treasury management has not instituted any risk management policies.
  C. Due to the recent sale of a division, the amount of cash and marketable securities managed by the treasury department has increased by 350 percent.
  D. The external auditors have indicated some difficulties in obtaining account confirmations.
  D. The external auditors have indicated some difficulties in obtaining account confirmations.

• Question 407:

  Which of the following would a chief audit executive most likely use to identify a need for improvement in a staff internal auditor's business acumen?

  A. A quality assessment review.
  B. An internal audit client survey.
  C. A control self-assessment.
  D. A peer review of the internal audit activity.
  B. An internal audit client survey.

• Question 408:

  The chief audit executive (CAE) is requested to complete an IT engagement within the year. The CAE determines that the internal audit activity does not currently have the required competencies for the engagement. Which of the following would be the most appropriate response?

  A. Assign a staff member from the IT department to assist with the engagement.
  B. Decline the engagement since the internal audit activity lacks the required competencies.
  C. Recruit a new staff member from a competing organization who has the required competencies.
  D. Recruit a finance department manager who recently transferred from the IT department.
  A. Assign a staff member from the IT department to assist with the engagement.

• Question 409:

  A large trucking organization wants to reduce traffic accidents by improving its system of internal controls. Which of the following controls is correctly classified?

  1. Review of speeding violations to identify repetitive locations and drivers is an example of a preventive control.

  2. Defensive driver training is an example of a directive control.

  3. The installation of tracking devices in delivery vehicles is an example of a corrective control.

  4. Providing a vehicle driver handbook is an example of a detective control.

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

• Question 410:

  The internal audit activity conducted an organizationwide risk assessment. One of the most significant risks identified is associated with the oil price market. The chief audit executive (CAE) is considering including in the annual audit plan an assessment of the effectiveness of oil price risk management. The manager responsible commented that the assessment was not needed, as market risks were regularly addressed by the financial risk committee. If the CAE decides to include this activity in the annual audit plan anyway, how should it be recorded?

  A. A consulting engagement independent of the financial risk committee's review.
  B. A risk assessment.
  C. An assurance engagement.
  D. A joint consulting engagement with input from the financial risk committee.
  B. A risk assessment.