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

IIA IIA-CIA-PART1 Online Questions & Answers

• Question 881:

  An organization's internal audit activity performed an audit of the sales and marketing function. A report issued to management noted a finding regarding fraud risk and recommended corrective measures.

  Management agreed with the fraud risk and noted that the impact would be very low. Management believes that the cost of implementing the recommendation would outweigh the potential benefits. Management also added that the

  recommended control would restrict the exibility of sales representatives who are key to generating revenue. Management subsequently obtained the board's approval to accept the risk.

  Considering management's feedback, the engagement supervisor still believes that the recommendation should be implemented. Based on this scenario, which of the following could the internal audit activity improve?

  A. Alignment of recommendations with the organization's business objectives.
  B. Audit report accuracy.
  C. The competency of the engagement supervisor.
  D. The authority of the organization's chief audit executive regarding implementing recommendations.
  A. Alignment of recommendations with the organization's business objectives.

• Question 882:

  The chief audit executive (CAE) of a small internal audit activity (IAA) performs all high-risk engagements on the annual audit plan to make use of his knowledge and experience and to maximize the effient use of audit resources. Which of the following statements is most relevant regarding this practice?

  A. The CAE's work may be reviewed by any other experienced staff member within the IAA.
  B. The CAE's work should be reviewed by an individual with the appropriate background and knowledge.
  C. The CAE may self-review his work, provided he discloses this practice in the final report.
  D. The CAE should avoid performing engagements to ensure he is able to review all audit work objectively.
  B. The CAE's work should be reviewed by an individual with the appropriate background and knowledge.

• Question 883:

  Which of the following audit techniques is used to evaluate control design while also embodying auditing's analytical process?

  A. A risk and control matrix.
  B. A flowchart.
  C. A walk-through.
  D. A process narrative.
  A. A risk and control matrix.

• Question 884:

  In the annual audit of the financial statements of a company with high inherent risk and a very strong control system, the external auditor may be able to allow detection risk to rise because.

  A. Audit risk has been reduced.
  B. Control risk has been assessed at a lower level.
  C. The company's operations are very susceptible to misstatements.
  D. Whenever inherent risk is high, control risk is disregarded.
  B. Control risk has been assessed at a lower level.

• Question 885:

  A senior executive at a government-owned organization received an invitation to attend a public exhibition where he can learn about new trucks relevant to the organization's business. As a special perk, the executive is offered an opportunity to drive a luxury vehicle manufactured by one of the exhibiting companies. Prior to the event, the executive asked for the chief audit executive's (CAE's) advice. What should the CAE recommend as the most appropriate course of action for the executive?

  A. Attend the event, but decline the offer to use the luxury vehicle.
  B. Decline the invitation to the exhibition.
  C. Ask the board to decide on the issue.
  D. Select a lower-level employee to enjoy the luxury vehicle instead.
  A. Attend the event, but decline the offer to use the luxury vehicle.

• Question 886:

  A product manager occasionally overrides established purchasing policies in order to expedite the introduction of new products in a competitive industry. The manager's overrides are:

  A. Unacceptable as they are not consistent with the purchasing policy.
  B. Only acceptable if the override is within the manager's spending limit.
  C. Only acceptable if a policy governing such overrides is in place and they are reported.
  D. Acceptable due to the highly competitive nature of the industry.
  C. Only acceptable if a policy governing such overrides is in place and they are reported.

• Question 887:

  Which of the following activities should a minimally proficient internal audit activity be able to perform?

  A. Design audit procedures to ensure that fraud is detected.
  B. Provide expert IT auditing knowledge to internal stakeholders.
  C. Lead a fraud investigation into an online cyberattack to identify the perpetrator.
  D. Evaluate the adequacy of fraud management procedures.
  D. Evaluate the adequacy of fraud management procedures.

• Question 888:

  An internal auditor reviews a draft audit report in preparation for an exit meeting. The auditor notices the inclusion of an observation that was clari ed by the process owner. The process owner had provided suficient documentation to support that the relevant control is being performed effectively. The auditor discusses with the engagement supervisor to remove the observation from the report. Which of the following competencies does this demonstrate?

  A. Courage.
  B. Persistence.
  C. Communication.
  D. Persuasion.
  C. Communication.

• Question 889:

  The board of directors of a newly formed organization wants to establish an ethics program. Which of the following parties is most appropriate to assume responsibility for implementing the program?

  A. The internal audit activity.
  B. Business unit management.
  C. Senior management.
  D. This responsibility cannot be delegated.
  C. Senior management.

• Question 890:

  The internal audit activity and the engagement client meet for a full day. The client offers to provide lunch for all attendees. Which of the following would help the internal audit activity to determine whether to accept the offer?

  A. A conflict resolution policy.
  B. A confidentiality policy.
  C. A conflicts of interest policy.
  D. An independence policy.
  C. A conflicts of interest policy.