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Following are some new IIA-CIA-Part1 Real Exam Questions!
NEW QUESTION 51
Which of the following actions does not violate the IIA Code of Ethics or Standards?
- A. An internal auditor disclosing details of an audit report to colleagues from a different organization.
- B. An internal auditor disclosing confidential information in response to a lawsuit.
- C. An internal auditor performing an audit on procedures that they were responsible for creating.
- D. An internal auditor performing an audit on an operation that they managed less than a year ago.
Answer: B
NEW QUESTION 52
According to the COSO enterprise risk management (ERM) framework, which of the following is not part of the new paradigm in ERM?
- A. Reducing operational surprises and losses.
- B. Aligning risk appetite and strategy.
- C. Enhancing risk response decisions.
- D. Assessing the risk factors.
Answer: D
NEW QUESTION 53
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. III
- B. IV
- C. II
- D. I Only
Answer: D
Explanation:
Section: Volume A
NEW QUESTION 54
Which type of objectives can best be described as broad goals that promote the effective and efficient use of resources?
- A. Reporting objectives.
- B. Strategic objectives.
- C. Operational objectives.
- D. Compliance objectives.
Answer: C
NEW QUESTION 55
According to the COSO Enterprise Risk Management - Integrated Framework, which of the following statements is true regarding the role of risk appetite in an organization?
- A. Risk appetite is determined in part by how an entity allocates its resources.
- B. Risk appetite reflects the organization's risk philosophy and influences its operating style.
- C. A high risk appetite may limit capital investment in high risk areas.
- D. Risk appetite is often best measured in the same units as its related objective.
Answer: B
NEW QUESTION 56
Which of the following is the most important limitation on the effectiveness of audit committees?
- A. Audit committee members do not normally have degrees in the accounting or auditing fields.
- B. Audit committee members are compensated by the organization and thus favor a stockholder view.
- C. Audit committees may be composed of independent directors; however, those directors may have close personal and professional friendships with management.
- D. Audit committees devote most of their efforts to external audit concerns and do not pay much attention to internal auditing and the overall control environment.
Answer: C
Explanation:
Section: Volume B
NEW QUESTION 57
During an interview with a data-entry clerk in the human resources department, an internal auditor recognizes a potentially significant weakness with a database system used to track employee performance ratings. Which of the following actions should the auditor take after discovering the weakness?
- A. Avoid either directly or indirectly confronting the data-entry clerk about the system weakness.
- B. Question the data-entry clerk indirectly to help obtain more factual information about the weakness.
- C. Immediately document the weakness and write a report to the data-entry clerk's superior.
- D. Schedule a series of follow-up interviews with the data-entry clerk.
Answer: B
Explanation:
Section: Volume D
NEW QUESTION 58
Which of the following risk management activities is most appropriate for an internal auditor to undertake?
- A. Impose risk management processes.
- B. Implement risk responses on management's behalf.
- C. Coordinate risk management activities.
- D. Review the management of key risks.
Answer: D
NEW QUESTION 59
Which of the following would be the least desirable criteria against which to judge current operations of a company's treasury function?
- A. Company policies and procedures delegating authority and assigning responsibilities.
- B. Finance textbook illustrations of generally accepted good treasury function practices.
- C. The operations of the treasury function as documented during the last audit engagement.
- D. Codification of best practices of the treasury function in relevant industries.
Answer: C
NEW QUESTION 60
According to IIA guidance,which of the following must internal auditors consider to
conformwith the requirements for due professional care during a consulting engagement?
1.The cost of the engagement,as it pertains to audit time and expenses in relation to the potential benefits.
2.The needs and expectation of clients,including the nature,timing,and communication of engagement results.
3.The application of technology-based audit and other data analysis techniques,where appropriate.
4.The relative complexity and extent of work needed to achieve the engagement's objectives.
- A. 2,3,and 4
- B. 1,2,and 3
- C. 1,2,and 4
- D. 1,3,and 4
Answer: C
NEW QUESTION 61
According to the Standards, which of the following is not a responsibility of the audit committee?
- A. Review, assessment and approval of the annual audit plan.
- B. Appointment and performance of the chief audit executive.
- C. Resolving any disagreements between management and internal audit.
- D. Reviewing internal audit staffing promotions and salary increases.
Answer: D
NEW QUESTION 62
Management has asked the chief audit executive (CAE) to provide assurance on the organization's automated control system related to financial data. The current audit staff does not have the expertise needed to conduct this type of engagement. Which of the following would be the best response by the CAE?
- A. Do not accept the assignment because the internal audit activity lacks the competency to perform the engagement with due professional care.
- B. Accept the assignment and use an external provider with the necessary knowledge and skills to perform the engagement.
- C. Accept the assignment and use control self-assessment to complete the project.
- D. Accept the assignment if the engagement is included in the current audit plan,but inform senior management that the current audit staff does not have the knowledge and skills required.
Answer: B
NEW QUESTION 63
Which of the following lists these audit steps in the correct chronological order?
I.Create the engagement work program.
II.
Conduct the exit conference.
III.
Perform fieldwork.
IV.
Schedule the audit engagement.
Issue a summary report of audit findings.
- A. I, IV, II, III, V.
- B. IV, I, III, II, V.
- C. I, IV, III, II, V.
- D. IV, III, I, V, II.
Answer: B
NEW QUESTION 64
Which of the following does not need to be defined in the internal audit charter?
- A. The audit engagements to be performed during the upcoming year.
- B. The scope of internal audit activities.
- C. The internal audit activity's position within the organization.
- D. Management and the board of directors' agreement regarding the roles and responsibilities of the internal audit activity.
Answer: A
NEW QUESTION 65
Overall audit efficiency is enhanced between the internal and external audit functions when:
- A. External audit scope is reduced based on the internal audit department's activities.
- B. The internal audit department reviews functions or departments prior to the external audit.
- C. Internal audit coverage is reduced to avoid potential conflicts of interest.
- D. Audits of the same department are conducted at different times.
Answer: A
NEW QUESTION 66
Using the internal audit department to coordinate regulatory examiners' efforts is beneficial to the organization because internal auditors can:
- A. Perform fieldwork for the regulatory examiners and thus shorten the regulatory examiners' review.
- B. Influence regulatory interpretation of law to better match corporate practice.
- C. Recommend changes to the scope of the regulatory examiners' review.
- D. Supply evidence of adequate compliance testing through internal audit workpapers and reports.
Answer: D
Explanation:
Section: Volume B
NEW QUESTION 67
A retail sales company has discontinued a product that normally sold for $100. During the first month of a sale of the product, a 20 percent discount was given. Later that sale price was reduced by an additional 40 percent.
What was the overall discount from the original selling price?
- A. 48 percent.
- B. 52 percent.
- C. 30 percent.
- D. 60 percent.
Answer: B
Explanation:
Section: Volume C
NEW QUESTION 68
According to the COSO Enterprise Risk Management - Integrated Framework, which of the following statements is true regarding the role of risk appetite in an organization?
- A. Risk appetite is determined in part by how an entity allocates its resources.
- B. Risk appetite reflects the organization's risk philosophy and influences its operating style.
- C. A high risk appetite may limit capital investment in high risk areas.
- D. Risk appetite is often best measured in the same units as its related objective.
Answer: B
NEW QUESTION 69
The results of an internal audit activity's (IAA) quality assurance and improvement program are favorable and an external assessment was completed within the last five years. Which of the following statements may the IAA use to describe its work?
- A. "Compliant with all domestic and international legal statutes, and certified quality assured for ten years."
- B. "Conforms with the International Standards for the Professional Practice of Internal Auditing."
- C. "Completed with the advance certification of the External Assessors Association for Auditing Review."
- D. "Certified 100% accuracy, per the International Standards of External Assessment."
Answer: B
NEW QUESTION 70
In an audit engagement, a group of internal auditors used an integrated test facility to test payroll processing. The auditors identified the key controls and processing steps in the computer software, and then developed test data. Over the course of 24 months, they submitted test transactions on a regular basis but did not find any differences between payroll processing and integrated test facility results. Based on the data, what can the auditors conclude?
- A. The computer application and its control procedures correctly processed payroll over the 24-month period.
- B. Payments to employees during the 24-month period were all correct.
- C. Employees are properly submitting their hours to payroll.
- D. The computer software is flawed.
Answer: A
NEW QUESTION 71
The chief audit executive (CAE) has assigned an internal auditor to an upcoming engagement. Which of the following requirements would most likely indicate that the internal auditor was assigned to an assurance engagement?
- A. The CAE must personally obtain the needed skills, knowledge, or other competencies if the internal auditor does not have them.
- B. The assigned internal auditor must maintain objectivity while performing the engagement.
- C. The assigned internal auditor must determine the objectives, scope, and techniques of the engagement.
- D. The assigned internal auditor must not assume management responsibilities while performing the engagement.
Answer: C
NEW QUESTION 72
Which of the following is true regarding the purpose of the COSO enterprise risk management framework?
1. It is a process that is ongoing and flows throughout the organization.
2. It contributes to the formulation of the organization's mission and vision.
3. It enables internal audit to provide reasonable assurance to an organization's management and the board.
4. It enables the management of risks within an organization's risk appetite.
- A. 1, 3, and 4 only
- B. 1, 2, and 3 only
- C. 2, 3, and 4 only
- D. 1, 2, and 4 only
Answer: A
NEW QUESTION 73
Which of the following is true with respect to the risk assessment process?
- A. The ethical climate should not be included since this factor cannot be measured quantitatively.
- B. The risk assessment process should be conducted at least every three years.
- C. More than one risk factor may have to be used to ensure that the risk assessment is comprehensive.
- D. Each risk factor should be given equal weighting in order to reduce the opportunity for bias.
Answer: C
NEW QUESTION 74
According to The IIA's Code of Ethics, which of the following is true?
- A. Confidentiality requires that auditors disclose all material facts known to them.
- B. Confidentiality requires that auditors be prudent in the use and protection of client information.
- C. Integrity requires that auditors perform internal audit services in accordance with the Standards.
- D. Objectivity requires that auditors perform their work with honesty, diligence, and responsibility.
Answer: B
NEW QUESTION 75
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