Latest [Dec 25, 2024] IIA IIA-CIA-Part1 Exam Practice Test To Gain Brilliante Result
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IIA-CIA-Part1 Certification Exam is a computer-based exam that comprises of 125 multiple-choice questions. IIA-CIA-Part1 exam covers four domains: Foundations of Internal Auditing, Independence and Objectivity, Proficiency and Due Professional Care, and Quality Assurance and Improvement Program. IIA-CIA-Part1 exam duration is 2 hours and 30 minutes, and candidates are required to score a minimum of 600 out of 800 to pass the exam.
NEW QUESTION # 212
Which of the following represents the most effective governance structure?
I.Operating
Executive
Internal
Management
Management
Auditing
Responsibility for risk
Oversight role
Advisory role
II.
Oversight role
Responsibility for risk
Advisory role
III.
Responsibility for risk
Advisory role
Oversight role
IV.
Oversight role
Advisory role
Responsibility for risk
- A. I Only
- B. IV
- C. II
- D. III
Answer: A
NEW QUESTION # 213
A bank uses a risk analysis matrix to quantify the relative risk of auditable entities. The analysis involves rating auditable entities on risk factors using a scale of 1 to 10, with 10 representing the greatest risk. A partial list of risk factors and the ratings given to three of the bank's departments is provided below:
Department
Risk Factor
A
B
C
Control structure
9
5
7
Nature of assets in department
2
7
9
Dollar value of assets
6
6
8
Complexity of transactions
3
4
8
Which of the following statements regarding risk in the departments is true?
- A. The internal audit activity should schedule audits of department B more often than audits of department C because of the relative control strength of department C as compared to department B.
- B. The relative ranking of the departments in order of their risk, from greatest to least risk, is: A; C; B.
- C. As compared to departments A and C, department B has a stronger control system to compensate for the greater complexity of the department's transactions and dollar value of its assets.
- D. The nature of department A's control structure may be justified by the nature of the department's assets and the complexity of its transactions.
Answer: D
NEW QUESTION # 214
Which of the following is most likely to be considered a control weakness?
- A. Purchase orders are typed by the purchasing department using prenumbered forms.
- B. Vendor invoice payment requests are accompanied by a purchase order and receiving report.
- C. Department managers initiate purchase requests that must be approved by the plant superintendent.
- D. Buyers promptly update the official vendor listing as new supplier sources become known.
Answer: D
NEW QUESTION # 215
In addition to her internal audit activity responsibilities, the chief audit executive has been asked to oversee the organization's insurance function. Which of the following responses is most appropriate?
- A. Revise the internal audit charter to include oversight of the insurance function, ensuring that all of her responsibilities are properly documented.
- B. Welcome the additional responsibility, as it represents an opportunity to gain more information for future audits.
- C. Report the request to the board and recommend alternate processes to obtain assurance related to insurance activities.
- D. Promptly remove the organization's insurance function from the audit universe.
Answer: A
NEW QUESTION # 216
According to IIA guidance, which of the following is an appropriate role for the internal audit activity?
- A. Implementing risk responses on management's behalf.
- B. Imposing risk management processes.
- C. Coaching management in responding to risks.
- D. Setting the risk appetite.
Answer: C
Explanation:
According to IIA guidance, an appropriate role for the internal audit activity includes coaching management in responding to risks. This involves providing advice, facilitating workshops, and sharing best practices to help management identify, assess, and mitigate risks effectively. Internal auditors can offer insights and recommendations based on their evaluations but should not take on management responsibilities.
Implementing risk responses on management's behalf (B), imposing risk management processes (C), and setting the risk appetite (D) are not appropriate roles for internal auditors, as these activities fall within the purview of management. The internal audit function should maintain its independence and objectivity while supporting and enhancing the organization's risk management efforts.
References:
* IIA Position Paper: The Role of Internal Auditing in Enterprise-Wide Risk Management
* IIA Standard 2120: Risk Management
NEW QUESTION # 217
An internal auditor is reviewing a new automated human resources system. The system contains a table of pay rates which are matched to the employee job classifications. The best control to ensure that the table is updated correctly for only valid pay changes would be to:
- A. Limit access to the data table to management and line supervisors who have the authority to determine pay rates.
- B. Require that all pay changes be signed by the employee to verify that the change goes to a bona fide employee.
- C. Ensure that adequate edit and reasonableness checks are built into the automated system.
- D. Require a supervisor in the department, who does not have the ability to change the table, to compare the changes to a signed management authorization.
Answer: D
Explanation:
Section: Volume A
NEW QUESTION # 218
An internal auditor was offered expensive tickets to a sporting event by the manager of an area that she was currently auditing. The auditor politely declined. Which of the following fundamental principles of the MA Code of Ethics did she display?
- A. Confidentiality.
- B. Independence.
- C. Competency.
- D. Objectivity
Answer: D
Explanation:
By declining the offer of expensive tickets from the manager of an area currently being audited, the internal auditor demonstrated objectivity. Objectivity is a fundamental principle of the IIA Code of Ethics, which requires auditors to make unbiased and impartial judgments during their audits. Accepting gifts could compromise the auditor's ability to remain impartial, thereby affecting their objectivity.References: IIA Code of Ethics.
NEW QUESTION # 219
Senior management has requested that the internal audit activity review and amend policies where necessary when auditing the purchasing department. To which of the following would the chief audit executive most likely give primary consideration when responding to this request?
- A. Engagement scope.
- B. Internal audit independence.
- C. Auditor objectivity.
- D. Auditor competency.
Answer: B
Explanation:
In responding to a request from senior management for the internal audit activity to review and amend policies when auditing the purchasing department, the chief audit executive would most likely give primary consideration to maintaining internal audit independence. This request potentially places the internal audit activity into a management role, which could impair its independence and the ability to perform unbiased audits in the future. According to IIA standards, internal auditors should avoid taking on operational responsibilities to preserve their independence.References: IIA Standards on independence and objectivity.
NEW QUESTION # 220
An internal auditor would most likely judge an error in an account balance to be material if the error involves:
- A. An unusual transaction for the company.
- B. A data input function.
- C. A large percentage of net income.
- D. An unverified routine transaction.
Answer: C
Explanation:
Section: Volume C
NEW QUESTION # 221
According to IIA guidance, which of the following best describes acceptable methods for internal auditors to obtain qualified continuing professional education hours?
- A. Volunteering in relevant professional organizations, formal education, and tutoring college students.
- B. Volunteering in relevant professional organizations, formal education, and online training courses.
- C. Volunteering in relevant professional organizations, on-line training courses, and tutoring college students.
- D. Formal education, on-line training courses, and tutoring college students.
Answer: B
NEW QUESTION # 222
With regard to external assessments of an internal audit activity (IAA), which of the following is the chief audit executive required to discuss with the board?
- A. External reviewer conflicts of interest, and the timeline of the external assessment.
- B. External reviewer conflicts of interest, and the need for an external assessment more frequently than once every five years.
- C. The simplest way for the external reviewer to join the IAA's organization, and the timeline of the external assessment.
- D. The need for an external assessment more frequently than once every five years, and the simplest method for the external reviewer to join the IAA's organization.
Answer: B
Explanation:
Section: Volume D
Explanation/Reference:
NEW QUESTION # 223
Which of the following best describes the procedures used by the representatives of an organization's stakeholders to provide oversight of the processes administered by management?
- A. Control
- B. Risk management
- C. Monitoring
- D. Governance
Answer: D
NEW QUESTION # 224
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. Proficiency in creating and utilizing process maps.
- B. A thorough understanding of organizational governance principles.
- C. Knowledge of key management and business principles.
- D. Expertise in identifying information technology risks.
Answer: D
NEW QUESTION # 225
Which of the following statements is the most appropriate for a chief audit executive to include in the internal audit policy manual in order to promote objectivity?
- A. Internal auditors may conduct a financial effectiveness engagement in a business unit at any point after being transferred from that area.
- B. Internal auditors may conduct an engagement in a business unit at any point after providing a training workshop in that area.
- C. Internal auditors should limit the scope of an engagement if they become aware of a potential impairment of their objectivity in order to reduce the potential impact of the impairment on the engagement results.
- D. Internal auditors may conclude that a business unit's current control environment is adequate and effective if the review of the prior year's workpapers and audit report supports that conclusion.
Answer: C
NEW QUESTION # 226
Which of the following is the responsibility of an internal auditor?
1. Assist operating management in implementing audit recommendations.
2. Provide management with value-added analysis to improve operations.
3. Become an advocate for changes to the internal audit activity charter.
4. Disclose non-financial risks that may be identified during the course of an engagement.
- A. 2 and 4 only
- B. 1, 2, and 4 only
- C. 1, 2, 3, and 4
- D. 1 and 3 only
Answer: A
NEW QUESTION # 227
Which of the following is the most effective way for internal auditors to determine whether ethical values are followed throughout the organization?
- A. Review the organization's records to ensure all employees have signed statements that they will follow ethical practices.
- B. Review employee survey responses and follow up on those that suggest weaknesses in the ethical climate.
- C. Review the organization's ethical value structure and reporting procedures.
- D. Review what the organization considers to be ethical behavior, such as the employee code of conduct.
Answer: D
NEW QUESTION # 228
Which of the following is a detective control?
- A. A front desk officer in an organization requires that visitors are identified by the host before access is granted.
- B. A compliance specialist carries out quarterly reviews of an organization's compliance with regulatory requirements.
- C. An internal audit activity deploys audit management policies and procedures for team members.
- D. An organization requires certain employees who occupy sensitive positions to sign attestation to the code of conduct on an annual basis.
Answer: D
NEW QUESTION # 229
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. Acceptable due to the highly competitive nature of the industry.
- C. Only acceptable if the override is within the manager's spending limit.
- D. Only acceptable if a policy governing such overrides is in place and they are reported.
Answer: D
NEW QUESTION # 230
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