[Oct-2021] IIA-CIA-Part1 Pre-Exam Practice Tests | Exam Questions and Answers for Certified Internal Study Guide
Essentials of Internal Auditing Certification Sample Questions
NEW QUESTION 39
According to IIA guidance, which of the following must the internal auditor consider to meet the requirements for due professional care?
- A. The use of innovative technology and data analysis techniques.
- B. The training courses necessary to enhance the internal auditor's knowledge, skills, and other competencies.
- C. The appropriateness of assurance procedures necessary to ensure all significant risks will be identified.
- D. The extent of work needed to achieve the engagement's objectives.
Answer: D
NEW QUESTION 40
A medical insurance provider uses an electronic claims-submission process and suspects that a number of physicians have submitted claims for treatments that were not performed. Which of the following control procedures would be most effective to detect this type of fraud?
- A. Develop an integrated test facility and submit false claims to verify that the system is detecting such claims on a consistent basis.
- B. Use computer software to identify abnormal claims based on the insured's age and medical history.
- C. Require the physician to submit a signed statement attesting that the treatments had been performed.
- D. Send confirmations to the physicians, requesting them to verify the exact nature of the claims submitted to the insurance provider.
Answer: B
Explanation:
Section: Volume F
NEW QUESTION 41
The audit committee is concerned that the small size of the internal audit activity (IAA) makes it impractical to achieve full conformance with the Standards. To address this concern, which of the following actions is most appropriate for the CAE to take?
- A. The CAE should seek sufficient funding to increase audit resources to meet the minimum requirements of the Standards.
- B. The CAE should agree with the audit committee and implement only those standards appropriate to the size of the IAA.
- C. The CAE should request the audit committee to review the Standards to identify specifically which are creating the greatest concern.
- D. The CAE should explain that conformance with the Standards is essential and not dependent upon the size of the IAA.
Answer: D
Explanation:
Section: Volume E
NEW QUESTION 42
A company has established its environmental audit activity as part of its legal department rather than part of its internal audit activity, which reports to the audit committee. The board has requested that the chief audit executive (CAE) provide an annual opinion on whether environmental risks are being properly addressed. In these circumstances, the CAE should recommend to the audit committee that the internal audit activity:
- A. Discuss with the environmental auditors the results of their reviews.
- B. Periodically carry out a quality assessment of the environmental audit activity.
- C. Review the recommendations in all environmental audit reports.
- D. Include a review of environmental issues in some internal audit engagements.
Answer: B
NEW QUESTION 43
Which of the following audit findings would have the least impact (either positive or negative) on a department's control environment?
- A. The department makes long-term investment risk decisions to maximize return on investment.
- B. The department manager sets and demonstrates a tone of honesty and integrity in all business dealings.
- C. Many department functions are duplicated or verified by other department employees.
- D. Deficiencies were found in the appropriate authorization of transactions.
Answer: A
Explanation:
Section: Volume B
NEW QUESTION 44
It is important for a chief audit executive to seek formal approval from the board regarding an internal audit charter so that:
- A. There is assurance that all internal audit activities will be completed.
- B. The effectiveness of the internal audit activity can be measured.
- C. Improvements can be implemented in internal audit processes.
- D. The status of the internal audit activity can be more clearly established.
Answer: D
NEW QUESTION 45
An external quality assurance review which was authorized by the chief audit executive (CAE) indicated significant findings from the Standards. To whom should the final results of the quality assurance review be reported?
- A. The CAE with copies to the board and senior management.
- B. Confidentially to the CAE only
- C. To the senior management with a copy to the board.
- D. To the board with copies to the external auditor or regulatory oversight body.
Answer: A
Explanation:
Section: Volume C
NEW QUESTION 46
The internal audit activity is planning a procurement audit and needs to obtain a thorough understanding of the subcontracting process,which can involve multiple individuals in multiple countries.
Which of the following internal audit tools would be most effective to document the process and the key controls?
- A. Segregation of duties matrix.
- B. Cross-functional flow chart.
- C. Procurement employee survey.
- D. Internal control checklist.
Answer: B
NEW QUESTION 47
This chief audit executive (CAE) engaged an internal auditor to consult on an organization's complex information technology system. Shortly after beginning the engagement, the auditor unexpectedly resigned.
Unfortunately, this auditor was the only available auditor with the necessary expertise. The CAE will not be able to hire someone with similar expertise in time to meet a regulatory deadline.
Which of the following would be the best course of action for the CAE to take?
- A. Continue with the engagement in order to meet the regulatory deadline, but highlight areas in the final report that might need to be revised in the future.
- B. Delay the engagement and inform the board of the situation, asking them to provide acceptable alternatives for completing the engagement.
- C. Ask that a senior member of the organization's IT department with the required systems expertise join the audit team to assist in completing the engagement.
- D. Remove the planned engagement from the audit plan and explain to senior management the problems with moving forward without an auditor with the necessary expertise.
Answer: B
Explanation:
Section: Volume E
NEW QUESTION 48
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 higher because control risk is lower.
- B. Detection risk is unchanged although control risk is lower.
- C. Detection risk is lower because control risk is higher.
- D. Detection risk is lower because control risk is lower.
Answer: B
NEW QUESTION 49
A small not-for-profit organization with limited resources is unable to adequately maintain appropriate segregation of duties. Considering the organization's resource constraints, which type of controls would best mitigate segregation of duty risks?
- A. Preventive controls.
- B. Application controls.
- C. Compensating controls.
- D. Detective controls.
Answer: C
NEW QUESTION 50
The chief audit executive needs to revise the internal audit activity's (IAA) charter. The revision must address the element of authority.
Which of the following statements meets this requirement?
- A. Following its assessment, the IAA shall recommend risk control processes and resource management strategies.
- B. The IAA shall deliver an initial report of its findings to the organization's board within 120 days of the beginning of the engagement.
- C. The IAA shall identify and assess all potential risks to the operations of the organization.
- D. The IAA shall be granted access to all records relevant to the performance of its duties.
Answer: D
Explanation:
Section: Volume D
Explanation
NEW QUESTION 51
According to the Standards,which of the following best describes why initial audit test results should be reported to the auditor-in-charge prior to advising management?
- A. It is required to demonstrate that effective engagement supervision has occurred.
- B. It ensures that an appropriate chain of evidence is maintained through the workpapers.
- C. It helps ensure that appropriate professionaljudgmentsand conclusions are made.
- D. It increases the likelihood of obtaining the audit client's agreement with the results.
Answer: C
NEW QUESTION 52
According to IIA guidance, which of the following statements regarding the internal audit charter is true?
- A. Senior management should approve the charter before it is submitted to the board.
- B. The CEO periodically should assess whether the terms of the charter continue to be adequate.
- C. The charter should define the consulting services that the internal audit activity is permitted to perform.
- D. The charter should describe the purpose and authority of the internal audit activity, consistent with the Standards.
Answer: A
NEW QUESTION 53
The primary reason that a bank would maintain a separate compliance function is to:
- A. Ensure the independence of line and senior management.
- B. Better manage perceived high risks.
- C. Strengthen controls over the bank's investments.
- D. Better respond to shareholder expectations.
Answer: B
Explanation:
Section: Volume A
NEW QUESTION 54
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Which of the following is the responsibility of an internal auditor?
Assist operating management in implementing audit recommendations. Provide management with value-added analysis to improve operations. Become an advocate for changes to the internal audit activity charter. Disclose non-financial risks that may be identified during the course of an engagement.
- A. 1, 2, 3, and 4.
- B. 1 and 3 only.
- C. 1, 2, and 4 only.
- D. 2 and 4 only.
Answer: D
NEW QUESTION 55
Which of the following are acceptable resources for a chief audit executive to use when developing a staffing plan?
1. Co-sourcing arrangements.
2. Employees from other areas of the organization.
3. The organization's external auditors.
4. The organization's audit committee members.
- A. 1, 2, and 4 only
- B. 1 only
- C. 2 and 3 only
- D. 1 and 2 only
Answer: D
NEW QUESTION 56
When internal auditors are preparing workpapers for the testing stage of an engagement, which of the following guidelines should be observed?
1. Include copies of all client files that were reviewed for the audit.
2. Avoid the use of professional, industry-appropriate jargon and technical terms.
3. Indicate the original sources of all data and information used in the workpapers.
4. Leave blank space for cross-references to be completed during the post-audit process.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 3 and 4 only
- D. 1 and 4 only
Answer: B
NEW QUESTION 57
Given the highly technical and legal nature of privacy issues, which of the following statements best describes the internal audit activity's responsibility with regard to assessing an organization's privacy framework?
- A. The internal audit activity should have appropriate knowledge and competence to conduct an asses framework.
- B. Because the audit committee is ultimately responsible for ensuring that appropriate control processes are in place to mitigate risks associated with personal information, the internal audit activity is required to conduct privacy assessments.
- C. The internal audit activity may delegate to nonaudit IT specialists the responsibility of determining whether personal information has been secured adequately and data protection controls are sufficient.
- D. If an organization does not have a mature privacy framework, the internal audit activity should assist in developing and implementing an appropriate privacy framework.
Answer: A
NEW QUESTION 58
What type of risk management strategy is being employed when an organization installs two firewalls to provide protection from unauthorized access to the network?
- A. Avoiding the risk of having a direct network connection to un-trusted networks.
- B. Sharing the risk that either firewall could be compromised by hackers.
- C. Diversifying the risk that network access will not be available to legitimate, authorized users.
- D. Accepting the risk that there may be attempts at unauthorized access to the network.
Answer: C
NEW QUESTION 59
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What are the IIA-CIA-Part1 Exam
The CIA is the only identified internal audit accreditation in the world, so it is the best way to interact with your internal accounting skills. Furthermore, the CIA is the only essential designation in the internal audit career and its value does not diminish from country to country.
Everyone in the internal audit market recognizes what it takes to be a CIA, they will see it much more positively when you do. Their respect for you will certainly increase today, as will your confidence in your experience.
One of the most interesting elements of the CIA certification is the income of the certified internal auditor. As a CIA, you won’t have to work for financial security alone. Rather, you can rejoice in financial success.
No matter where you are in your profession, the CIA offers you even more career opportunities.
The IIA has high requirements for certified internal auditors. He wants potential CIA clients to demonstrate all the skills and abilities necessary to fulfill current placement obligations. Therefore, the IIA established several requirements of the CIA. Additionally, many of these qualified internal auditor certifications are quite involved in the experience and evaluation needs.
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