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

IIA IIA-CIA-PART1 Online Questions & Answers

• Question 71:

  According to The IIA's Code of Ethics, which of the following best describes the principle of integrity?

  A. Auditors shall observe the law and make disclosures expected by the law and the profession.
  B. Auditors shall disclose all material facts known to them that, if not disclosed, may distort the reporting of activities under review.
  C. Auditors shall engage only in those services for which they have the necessary knowledge, skills, and experience.
  D. Auditors shall be prudent in the use and protection of information acquired in the course of their duties.
  A. Auditors shall observe the law and make disclosures expected by the law and the profession.

• Question 72:

  An organization's chief audit executive (CAE) has been asked to conduct an assurance engagement for an information technology system that was subject to a consulting engagement in the prior year. How should the CAE respond?

  A. Decline the engagement because independence and objectivity would be impaired.
  B. Delay the assurance engagement to ensure that there is a two-year period between the engagements.
  C. Accept the engagement and assign different auditors to conduct the assurance services.
  D. Facilitate a control self-assessment workshop instead of performing an assurance engagement.
  C. Accept the engagement and assign different auditors to conduct the assurance services.

• Question 73:

  During a review of a division's operations, an internal auditor notes that sales and customer base are unchanged, while inventory and gross margin have increased significantly. Which of the following audit procedures would be most relevant in substantiating management's assertion that the gross margin increase is due to increased efficiency in manufacturing operations?

  A. Obtain a physical count of inventory.
  B. For a sample of products, compare costs-per-unit this year to those of last year, test cost build-ups, and analyze standard cost variances.
  C. Take a physical inventory of equipment to determine if there were significant changes.
  D. Select a sample of nished goods inventory and trace raw materials cost back to purchase prices in order to determine the accuracy of the recorded raw
  B. For a sample of products, compare costs-per-unit this year to those of last year, test cost build-ups, and analyze standard cost variances.

• Question 74:

  Which of the following statements best represents the due professional care that is required of internal auditors?

  A. Internal auditors should perform assurance procedures to ensure that all significant risks are identified.
  B. Internal auditors should not perform consulting engagements for operations for which they had previous responsibilities.
  C. Internal auditors should consider the cost of assurance in relation to the potential benefits.
  D. Internal auditors should devise internal audit programs to confirm that the results are accurate.
  C. Internal auditors should consider the cost of assurance in relation to the potential benefits.

• Question 75:

  In developing an appropriate work program for an audit engagement, the most important factor for an audit supervisor to consider is the:

  A. Availability of records and data.
  B. Potential impact of risks.
  C. Capabilities of audit personnel.
  D. Time required to complete the engagement.
  B. Potential impact of risks.

• Question 76:

  A senior manager asks the chief audit executive (CAE) to explain why statistical sampling is the best method to use in conducting an internal audit. Which advantages should the CAE point to in order to justify the internal audit activity's (IAA) use of statistical sampling?

  A. Statistical sampling sets limits on resources used for the IAA, allows for a subjective interpretation of the IAA's sampling results, and supports The Institute of Internal Auditors' requirements for using questionnaires as a sampling tool.
  B. Statistical sampling allows for evaluation of all organizational data at once, increases the likelihood that risks are immediately identified, and does not require a level of tolerable misstatement or margin of error.
  C. Statistical sampling allows for the selection of a minimum sample size, provides a quantitative expression of the IAA's sampling results, and supports extrapolation.
  D. Statistical sampling itself identifies root causes of issues, utilizes a qualitative method for analyzing results, and supports engagement objectives through
  C. Statistical sampling allows for the selection of a minimum sample size, provides a quantitative expression of the IAA's sampling results, and supports extrapolation.

• Question 77:

  An organization has implemented a new automated payroll system that contains a table of pay rates that are matched to employee job classifications. Which control should an internal auditor suggest in order to ensure that the table is updated correctly, and is used only for valid pay changes?

  A. Restrict data-table access from management and line supervisors who have the authority to determine pay rates.
  B. Require a supervisor in the department, who has the ability to change the table, to compare the changes to a signed management authorization.
  C. Ensure that adequate edit and reasonableness checks are built into the automated system.
  D. Require a manager, who is independent of the system and who cannot change the table, to authorize and sign-off on any employee pay changes.
  D. Require a manager, who is independent of the system and who cannot change the table, to authorize and sign-off on any employee pay changes.

• Question 78:

  According to IIA guidance, which of the following statements about working papers is false?

  A. They assist in the implementation of recommendations.
  B. They provide support for communication to third parties.
  C. They demonstrate compliance with auditing standards.
  D. They contribute to development of the internal audit staff.
  A. They assist in the implementation of recommendations.

• Question 79:

  A daily log of treasury dealers who exceeded their authorized limits serves as a:

  A. Preventive control.
  B. Detective control.
  C. Feed-forward control.
  D. Directive control.
  B. Detective control.

• Question 80:

  During engagement planning, the engagement supervisor recommended that the amount of time originally budgeted for the engagement should be expanded due to the engagement's complexity and materiality. This scenario is an example of which of the following?

  A. A lack of audit competency.
  B. Internal audit objectivity.
  C. Proper engagement supervision.
  D. Due professional care.
  C. Proper engagement supervision.