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

IIA IIA-CIA-PART1 Online Questions & Answers

• Question 711:

  In preparing for an audit of the footwear division of a major retail organization, an internal auditor gathered the following information about the organization's stores:

  

  In addition to labor costs, the other costs associated with each store are leasing and maintenance expenses. Which of the following is a valid conclusion?

  A. Sales per store are directly related to the size of the store.
  B. Employees are less productive in larger stores.
  C. Gross margin is directly related to the size of the store.
  D. Cost of goods sold is directly related to the size of the store.
  A. Sales per store are directly related to the size of the store.

• Question 712:

  Which of the following best describes a consulting engagement rather an assurance engagement?

  A. Bank internal auditors review an activity checklist to determine that the loan officer followed proper procedures.
  B. The chief financial officer asks for the internal auditors opinion regarding whether the new accounting pronouncements were properly and comprehensively adopted.
  C. An internal auditor is assigned to assess whether a proposed new initiative to convert a customer service system would be cost effective.
  D. Senior management asks the internal audit activity to review compliance with customer data security regulations.
  C. An internal auditor is assigned to assess whether a proposed new initiative to convert a customer service system would be cost effective.

• Question 713:

  An internal auditor has been engaged to assess fraud risks associated with a new financial software system. Which competency would best help the auditor complete the task?

  A. Expertise in identifying information technology risks.
  B. A thorough understanding of organizational governance principles.
  C. Proficiency in creating and utilizing process maps.
  D. Knowledge of key management and business principles.
  A. Expertise in identifying information technology risks.

• Question 714:

  Management has decided to invest significant capital in a new and innovative large computer system. They understand that they are one of the first organizations to implement this system, but they believe the benefits outweigh the uncertainty over the performance and reliability of the software. This decision best describes which aspect of risk management?

  A. Risk appetite.
  B. Risk tolerance.
  C. Residual risk.
  D. Inherent risk.
  A. Risk appetite.

• Question 715:

  Internal control processes in an organization require that all investments exceeding $20,000 receive authorization from both the president and treasurer. After conducting a sample of these transactions, an auditor determined that 10 of the 500 investments in the sample had not included both required authorizations. The sample has a five percent acceptable error rate. Based on this sample, which of the following actions should the auditor take?

  A. Con rm all of the investments with the organization's internal finance department.
  B. Contact the organization's investment broker and confirm all investments.
  C. Complete a comprehensive review of the organization's investment activity and compare variations over prior years.
  D. Determine that no further testing of investment authorizations is required.
  D. Determine that no further testing of investment authorizations is required.

• Question 716:

  Which of the following factors should be considered when determining the appropriate combination of manual techniques and computer- assisted audit techniques (CAATs) to be used during an audit?

  1. Acceptance of CAATs findings by entity management.

  2. Computer knowledge and expertise of the auditor.

  3. Time constraints.

  4. Level of audit risk.

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

• Question 717:

  To enhance the independence of both the internal and external audit functions, audit committees should be composed of:

  A. A rotating subcommittee of the board of directors or its equivalent.
  B. A combination of external members of the board of directors and company officers.
  C. Members from all important constituencies, specifically including representatives from banking, labor, regulatory agencies, shareholders, and officers.
  D. Only external members of the board of directors or other similar oversight committees.
  D. Only external members of the board of directors or other similar oversight committees.

• Question 718:

  In order to exercise due professional care as defined in the International Professional Practices Framework, an internal auditor should:

  I- Consider the probability of significant noncompliance in each audit engagement.

  II-. Perform assurance procedures with suficient care to ensure that all risks are identified.

  III-. Weigh the cost of assurance against the benefits.

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

• Question 719:

  A production division received 45 responses to a customer-service survey distributed to 100 purchasing departments randomly selected from all customers who made purchases in the prior 12 months. Which of the following is the most likely reason that the division manager would be concerned about nonresponse bias in this situation?

  A. The sample means and standard errors are more difficult to compute.
  B. Those who did not respond may be systematically different from those who did.
  C. The sample size is too small.
  D. Confidence intervals are narrower.
  B. Those who did not respond may be systematically different from those who did.

• Question 720:

  In which of the following functions would fraud be most likely to occur?

  A. Maintaining custody of inventory records.
  B. Collecting payments on accounts.
  C. Approving changes to employee records.
  D. Preparing customer statements.
  B. Collecting payments on accounts.