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

IIA IIA-CIA-PART1 Online Questions & Answers

• Question 591:

  The internal audit activity is asked to provide consulting services regarding the risks related to implementing a proposed new inventory management system. Which of the following would be a key consideration of the internal audit activity in accepting this engagement?

  A. Ask the inventory manager to determine whether the work planned would be suficient to meet the consulting engagement objectives.
  B. Ensure that the method used to communicate the results of the consulting engagement is consistent with the board's preferred method.
  C. Determine whether the benefits to be derived from the requested assessment would exceed the cost of providing the consulting service.
  D. Use email and telephone conversations to convey the results of the engagement, as these may prove to be the most effient methods for communicating.
  C. Determine whether the benefits to be derived from the requested assessment would exceed the cost of providing the consulting service.

• Question 592:

  A chief audit executive (CAE) for a specialty retailer is asked by management to review the controls in place to manage their electronic funds transfer process. The internal audit activity has no experience with similar engagements. What is the most appropriate course of action for the CAE to take?

  A. Plan the engagement and begin fieldwork using existing staff.
  B. Attempt to discourage management from the request.
  C. Hire an outside consulting rm to assist with the engagement.
  D. Defer the audit until current staff can be appropriately trained.
  C. Hire an outside consulting rm to assist with the engagement.

• Question 593:

  An internal auditor believes that the internal audit activity's independence is impaired. Which of the following actions should the internal auditor take first?

  A. Report the impairment to senior management.
  B. Discuss the impairment with the audit manager.
  C. Ascertain the best approach to disclose the impairment.
  D. Decide on the extent of impact of the impairment.
  C. Ascertain the best approach to disclose the impairment.

• Question 594:

  Which of the following risk management activities is most appropriate for an internal auditor to undertake?

  A. Impose risk management processes.
  B. Coordinate risk management activities.
  C. Implement risk responses on management's behalf.
  D. Review the management of key risks.
  D. Review the management of key risks.

• Question 595:

  Which of the following best describes the assessment of risks?

  A. Assess the actions necessary to reduce the likelihood and/or impact of risk to tolerable levels.
  B. Assess the likelihood and/or impact of risk on the achievement of organizational objectives.
  C. Assess the amount of risk an organization can accept while pursuing its objectives.
  D. Assess alternative strategies to reduce or eliminate major risks.
  B. Assess the likelihood and/or impact of risk on the achievement of organizational objectives.

• Question 596:

  At the beginning of an IT development project, key risks were identified and assessed, and risk owners were appointed. Six months later, the IT development team reported that the project is significantly over budget, it will not be completed on time, and key personnel had left the organization. Which of the following risk management practices should be improved for future projects?

  A. Risk response.
  B. Risk assessment.
  C. Risk monitoring.
  D. Risk avoidance.
  B. Risk assessment.

• Question 597:

  Which of the following statements describes a control weakness?

  A. Purchasing procedures are well designed and are followed even when the purchasing supervisor wishes to direct otherwise.
  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 a single signature required for purchases over $1,000.
  D. The purchasing agent in a personal capacity invests in a publicly-traded mutual fund that lists the stock of one of the company's suppliers in its portfolio.
  D. The purchasing agent in a personal capacity invests in a publicly-traded mutual fund that lists the stock of one of the company's suppliers in its portfolio.

• Question 598:

  The internal audit activity received an urgent request to provide consulting services on the potential impact of tariffs resulting from changes in the organization's activities. However, there are no experts on taxation available. Which of the following would be the most suitable course of action for the internal audit activity?

  A. Decline the engagement, as tariff-related issues require an assurance engagement.
  B. Compare the cost of outsourcing the engagement to the potential benefits.
  C. Undertake the engagement, but include a disclaimer in the audit report regarding the lack of expertise.
  D. Schedule a training on tariffs to ensure competency is gained prior to accepting the engagement.
  B. Compare the cost of outsourcing the engagement to the potential benefits.

• Question 599:

  An internal auditor is using mean-per-unit sampling to estimate the value of health benefit claims for a period. The auditor's desired precision is $20,000. If the achieved precision is $10,000, which of the following conditions is implied?

  A. The value of claims is overstated.
  B. The value of claims is understated.
  C. The standard deviation is smaller than expected.
  D. The standard deviation is larger than expected.
  C. The standard deviation is smaller than expected.

• Question 600:

  An internal auditor makes a series of observations when performing an analytical review of division operations. The auditor notes the following things: the current ratio is increasing and the quick ratio is decreasing, sales and current liabilities have remained constant, and the number of day sales in inventory is increasing.

  Which conclusion should the auditor draw from this data?

  A. Cash or accounts receivable has decreased.
  B. The gross margin has decreased.
  C. The division produced fewer items this year than in prior years.
  D. The gross margin has increased.
  A. Cash or accounts receivable has decreased.