IIA-CIA-Part1 Certification - The Ultimate Guide [Updated 2022]
IIA-CIA-Part1 Practice Exam and Study Guides - Verified By TestBraindump
Salary of IIA-CIA-Part1 Professional
The average Salary of a IIA-CIA-Part1
- United State - 69,000 USD
- England - 52802 POUND
- India - 5170273 INR
- Europe - 58621 EURO
NEW QUESTION 53
During an audit of financial contracts, an auditor learns that a relative has a substantial loan with the organization. The auditor should:
- A. Notify management and the chief audit executive (CAE) and have the CAE determine whether the auditor should continue with the audit engagement.
- B. Proceed with the audit engagement but disclose in the engagement final communication that the relative is a customer.
- C. Exclude the relative's information from the audited work and proceed with the audit engagement.
- D. Immediately withdraw from the audit engagement.
Answer: A
Explanation:
Section: Volume B
NEW QUESTION 54
A chief audit executive (CAE) is selecting an internal audit team to perform an audit engagement that requires a high level of knowledge in the areas of finance, investment portfolio management, and taxation.
If neither the CAE nor the existing internal audit staff possess the required knowledge, which of the following actions should the CAE take?
- A. Ask the audit committee to decide the course of action.
- B. Select the most experienced auditors in the department to perform the engagement.
- C. Hire consultants who possess the required knowledge to perform the engagement.
- D. Postpone the audit until the CAE hires internal audit staff with the required knowledge.
Answer: C
NEW QUESTION 55
The chief audit executive (CAE) has been asked to manage the regulatory compliance function for the organization's retail store operations. Store operations are included in the annual audit plan.
Which of the following strategies best fulfills the requirements of the Standards regarding these audits?
- A. The scope of store operations audits should exclude compliance.
- B. A store operations compliance audit should be performed by a staff internal auditor under the direction of the CAE.
- C. Store operations audits can be fully executed with appropriate disclosure to the board.
- D. Store operations audits should be performed by an external service provider.
Answer: D
Explanation:
Section: Volume E
NEW QUESTION 56
In addition to data protection, which of the following is a control that is typically used by companies to safeguard the privacy rights of their customers?
I. End-user computing.
II. Encryption of data.
III. Spyware.
IV. Intrusion detection.
- A. I and III only
- B. I, II, and IV only
- C. II only
- D. II and IV only
Answer: D
Explanation:
Section: Volume B
NEW QUESTION 57
Which of the following steps would not be included in a program of selecting and developing human resources for an internal audit department?
- A. Establishing an internal review team to assess the auditors' and audit department's compliance with standards, level of audit effectiveness, and compliance with departmental policy.
- B. Scheduling periodic meetings with individual auditors, during which the chief audit executive provides counsel regarding each auditor's performance and professional career development.
- C. Establishing in-house training programs and requiring continuing education for audit staff.
- D. Developing specific job descriptions for audit staff, audit managers, and other auditing positions.
Answer: A
NEW QUESTION 58
A chief audit executive (CAE) is obtaining information required by a regulatory oversight body and discovers a situation that requires management to take immediate corrective action. What is the best course of action for the CAE to take?
- A. Wait until all of the information has been gathered and reported to the oversight body before reporting the situation to management.
- B. Check with legal counsel to determine whether the situation can be reported to management before all information has been submitted to the oversight body.
- C. Schedule an engagement to explore the situation in depth, before reporting to either management or the oversight body.
- D. Report the situation to management immediately.
Answer: D
NEW QUESTION 59
During an audit engagement, an internal auditor finds that management is not complying with previous commitments made to the external auditors. However, the auditor determines management's actions to be justified due to significant changes in the business. The best course of action for the auditor to take would be to:
- A. Inform the external auditors and seek their guidance.
- B. Compare the recommended changes against the changes made by management and advise management which action to take.
- C. Proceed with the audit engagement and assess the changes actually implemented by management.
- D. Inform the external auditors and remove the associated work from the internal audit scope.
Answer: C
NEW QUESTION 60
An internal auditor is using mean-per-unit sampling to estimate the value of health benefit claims for a period. The auditor's desired precision is $20, 000. If the achieved precision is $10, 000, which of the following conditions is implied?
- A. The value of claims is overstated.
- B. The standard deviation is larger than expected.
- C. The standard deviation is smaller than expected.
- D. The value of claims is understated.
Answer: C
NEW QUESTION 61
In which of the following situations would fishbone diagrams be most useful?
- A. The team consists of experts who can resolve problems without much difficulty.
- B. The problem is complicated and the root cause is unknown.
- C. Team members cannot effectively communicate with each other.
- D. The team is too small for brainstorming to be effective.
Answer: B
NEW QUESTION 62
An internal auditor wants to use ratio analysis to examine efficiencies in an organization's accounting department. Which of the following statements identifies a weakness of ratio analysis that should be considered by the auditor?
- A. It utilizes financial information that may not have been checked for validity and reliability.
- B. It is only helpful for making comparisons across industries.
- C. Computer software is required in order to draw conclusions from the data.
- D. It requires a substantial investment of money.
Answer: A
Explanation:
Section: Volume D
NEW QUESTION 63
According to IIA guidance,which of the following are macro-level audit activities performed for an assurance engagement of the purchasing department?
1.Obtain and review all purchasing-related audit reports issued within the past year.
2.Meet with the quality assurance group to discuss its previous reports of any purchasing-related findings.
3.Review a memo written by the purchasing manager that outlines ongoing problems with the purchasing software.
4.Request a copy of the report from a purchasing audit conducted last year by an external service provider.
- A. 1 and 3.
- B. 2 and 4.
- C. 3 and 4.
- D. 1 and 2.
Answer: D
NEW QUESTION 64
When comparing an organization's current performance to that of the prior year, an internal auditor found that:
Total labor costs had increased.
More overtime costs had been incurred.
The total number of workers had increased.
Net income was 10 percent lower.
Based solely on this information, which of the following is a valid conclusion?
- A. Net income per worker decreased.
- B. Worker efficiency decreased.
- C. Wage rates increased.
- D. Total labor hours increased.
Answer: A
NEW QUESTION 65
Risk assessments are valuable to the internal audit activity's planning process because they assist in:
- A. Educating management on the importance of keeping the internal audit activity informed of organizational changes.
- B. Eliminating all areas with low risk from the audit plan.
- C. Identifying risks that management and the internal auditors have overlooked.
- D. Identifying the audit universe or auditable activities that need to be reviewed.
Answer: D
Explanation:
Section: Volume B
Explanation
NEW QUESTION 66
Which of the following must be in existence as a precondition to developing an effective system of internal controls?
- A. An information and communication process.
- B. A risk assessment process.
- C. A monitoring process.
- D. A strategic objective-setting process.
Answer: B
NEW QUESTION 67
New credit policies have been implemented in an automated order-entry system to improve the collection of receivables. Sales management has compiled several examples that show decreased sales and delayed order entry, and contends that these examples are a direct result of the new credit-policy constraints. Sales management's data and information provide:
- A. Feedback control data.
- B. A statistically valid conclusion about the impact of the new credit policies on customer goodwill.
- C. Evidence that the new credit policies do not meet the stated corporate objective to improve collections.
- D. Irrelevant and argumentative information.
Answer: A
NEW QUESTION 68
Which of the following results from computer assisted audit techniques provides the most significant indication that additional audit work is needed?
- A. Several exact matches were found when vendor and employee addresses were compared.
- B. Matching the accounts payable transaction file with the purchase order request file resulted in many differences between the person requesting the purchase order and the person authorizing payment.
- C. The sum of credit entries on the bank statement did not equal the sum of collections for the same period.
- D. Sorting the check register file by vendor name identified missing sequences of check numbers.
Answer: A
Explanation:
Section: Volume C
Explanation
NEW QUESTION 69
-- --
Which of the following controls within a spreadsheet would address the risk of logic errors?
The spreadsheet contains formulas that foot and cross-foot data.
The spreadsheet is locked to protect cell formulas from being inadvertently
changed.
Spreadsheets are included in nightly backup processes.
Check-in and check-out software is used to manage version control.
- A. 2 and 4 only.
- B. 1 and 3 only.
- C. 1 and 2 only.
- D. 3 and 4 only.
Answer: C
NEW QUESTION 70
During an internal audit, an organization's processing department is found to have incidences of both duplicate invoices and notices from customers that purchased goods were not received. The department under review insists that some of these reports are false and that others were isolated oversights due to understaffing.
Which of the following tests would best help the internal auditor detect fraudulent activity?
- A. Search for gaps in check numbers.
- B. Check inventory levels.
- C. Compare vendor summaries.
- D. Review raw material purchase quantities.
Answer: B
Explanation:
Section: Volume E
NEW QUESTION 71
When a risk assessment process has been used to construct an audit engagement schedule, which of the following should receive attention first?
- A. A new accounts payable system is currently undergoing testing by the information technology department.
- B. The external auditors have requested assistance for their upcoming annual audit.
- C. The existing accounts payable system has not been audited over the past year.
- D. Management has requested an investigation of possible lapping in receivables.
Answer: D
Explanation:
Section: Volume B
NEW QUESTION 72
Which of the following is the most important limitation on the effectiveness of audit committees?
- A. Audit committees may be composed of independent directors; however, those directors may have close personal and professional friendships with management.
- B. 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.
- C. Audit committee members are compensated by the organization and thus favor a stockholder view.
- D. Audit committee members do not normally have degrees in the accounting or auditing fields.
Answer: A
NEW QUESTION 73
Which of the following controls would most likely prevent the input of an unreasonable number of labor hours into a costing system?
- A. Consistency checks of data in input fields.
- B. Programmed limit tests of input fields.
- C. Reconciliation of input control totals.
- D. Recalculation tests during processing.
Answer: B
NEW QUESTION 74
Which of the following components influences the risk consciousness of an organization's people and is the basis for all other components of enterprise risk management?
- A. Information and Communication.
- B. Objective setting.
- C. Risk Assessment.
- D. Internal Environment.
Answer: D
NEW QUESTION 75
When auditing the award of a major contract, which of the following should an internal auditor suspect as a red flag for a bidding fraud scheme?
1. Subsequent change orders increase requirements for low-bid items.
2. Material contract requirements are different on the actual contract than on the request for bids.
3. A high percentage of employees are charged to indirect accounts.
4. Losing bidders are hired as subcontractors.
- A. 1 only
- B. 2 and 4.
- C. 1 and 3.
- D. 2 only
Answer: B
Explanation:
Section: Volume F
NEW QUESTION 76
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 agree with the audit committee and implement only those standards appropriate to the size of the IAA.
- B. The CAE should seek sufficient funding to increase audit resources to meet the minimum requirements of the Standards.
- C. The CAE should explain that conformance with the Standards is essential and not dependent upon the size of the IAA.
- D. The CAE should request the audit committee to review the Standards to identify specifically which are creating the greatest concern.
Answer: C
Explanation:
Section: Volume E
NEW QUESTION 77
Which of the following statements correctly describes how workpaper standards can improve the efficiency of internal audit operations?
- A. They mandate the workpaper retention period.
- B. They allow the design and content to vary depending on the nature of the engagement.
- C. They grant external parties approved by management access to workpapers.
- D. They require supervisors to provide written confirmation of the workpapers they review.
Answer: B
NEW QUESTION 78
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