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Free IIA IIA-CIA-Part1 Practice Exam with Questions & Answers | Set: 14

Questions 196

An internal auditor is providing consulting services on an area he was responsible for three years ago. Part of the consulting scope covers a review of a performance measuring system that the auditor helped to develop. What is the best course of action for the auditor to take concerning the consulting service?

Options:
A.

Accept the consulting services only after receiving approval to do so from the board.

B.

Accept the consulting services. The objectivity won't be impaired if it has been more than a year since he last worked in the area under review.

C.

Refrain from providing the consulting service because he was responsible for that area and his objectivity will be impaired,

D.

Disclose the potential impairment to the customer before accepting the consulting engagement

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Questions 197

An organization’s senior management team is awarding substantial bonuses if employees meet financial targets. Which of the following motivators to potentially commit fraud would become most likely in this scenario?

Options:
A.

Opportunity

B.

Pressure

C.

Rationalization

D.

Justification

Questions 198

Which of the following statements is true regarding corporate social responsibility (CSR)?

Options:
A.

Many of the areas explored by CSR are normally included in an audit universe or annual audit plan,

B.

Despite significant corporate resources spent on CSR reporting, investors generally do not rely on CSR information.

C.

Unlike many other areas of reporting responsibilities impacting stakeholders, CSR is largely voluntary.

D.

Typically, operating management does not have a major role to play based on the public nature of reporting

Questions 199

When dealing with various stakeholders which of the following is true regarding an internal auditor's responsibility to remain objective and independent?

Options:
A.

When deciding between conflicting reports of a control's performance from a control operator and the operator's manager the internal auditor should generally believe the manager

B.

Some audit issues may remain unremediated and unreported if management will accept recommendations that the internal auditor deems more important

C.

The internal auditor may initially disagree with management s acceptance of a risk, but reevaluate and agree with management’s judgment after further discussion

D.

When working on business unit audits it is sometimes sufficient for the internal auditor to report deficiencies only to the unit manager when remediation is not complex

Questions 200

Which of the following actions would an internal auditor perform primarily during a consulting engagement of a debt collections process?

Options:
A.

Reviewing journal entries for accuracy and completeness.

B.

Comparing the policies and procedures to regulatory collections guidance.

C.

Advising management on streamlining the recording of accounts receivable.

D.

Performing a walk-through of the debt collections process to determine whether proper segregation of duties exists

Questions 201

Which of the following characteristics is typical of the internal audit activity?

Options:
A.

Serves third parties that need reliable financial information from audit engagements

B.

Responds to the needs and desires of senior management and the board, but remains independent of areas under review

C.

Ensures the organization complies with laws and regulations in the area under review

D.

Is completely independent of senior management, the board and the area under review

Questions 202

An auditor for a large wholesaler is evaluating the controls over the approval and oversight of credit sales. Which of the following procedures would be a control weakness?

Options:
A.

The credit department is responsible for approving shipments to all customers

B.

The finance committee of the board of directors periodically reviews credit standards

C.

Customers who fail to meet credit requirements must pay cash for shipments upon delivery

D.

The sales department is responsible for determining the credit ratings of customers

Questions 203

An internal auditor extended the scope of testing for a disbursements engagement following a fraud risk assessment Despite the investment of additional audit resources no significant issues were found Unfortunately a major payment fraud was discovered several

months later According to IIA guidance which of the following statements is true regarding the internal auditor's application of due professional care?

Options:
A.

Due professional care was not applied because no additional work should have been performed unless there was actual evidence of fraud

B.

Due professional care was not applied because the extended scope resulted in no issues being identified, while fraud actually existed

C.

Due professional care was applied as the internal auditor modified the scope based on reasonable judgment, despite the additional cost of resources

D.

Due professional care was applied as the cost of audit resources should not be a determining factor in the degree of testing undertaken

Questions 204

Which of the following threatens internal audit objectivity'?

Options:
A.

Internal auditors are expected by senior management to identify a minimum of five major control weaknesses in each area audited

B.

Internal auditors are prevented from accessing information necessary to undertake their audit engagements

C.

The chief audit executive reports directly to the chief financial officer who previously led the internal audit activity

D.

The CEO requests the internal audit activity develop a charter that clearly delineates its purpose and responsibilities within the organization

Questions 205

The internal audit activity is undergoing a self-assessment as part of its quality assurance and improvement program Which of the following observations must be addressed in order for the internal audit activity to achieve conformance with the Standards?

Options:
A.

The internal audit charter does not identify which audit services are outsourced

B.

The internal audit charter has not been reviewed by the legal department

C.

The internal audit charter has not been approved by the board within the past year

D.

The internal audit charter does not describe the authority of the internal audit activity

Questions 206

Which of the following is an example of an entity-level control pertaining to the finance area of an organization'?

Options:
A.

Key account reconciliation such as bank reconciliation

B.

Segregation of duties between posting and reviewing journal entnes

C.

A signing authority matrix for spending approvals

D.

The establishment of a finance and audit committee

Questions 207

A business unit manager was impressed by the competence of the internal auditor who was conducting an assurance engagement in his area and the manager made the auditor an attractive job offer to begin after the audit was completed The auditor later told her auditor in charge that she was considering the offer. Which of the following IIA Code of Ethics principles was most likely violated?

Options:
A.

Integrity

B.

Confidentiality

C.

Objectivity

D.

No violation was committed

Questions 208

A new company’s risk management function is developing its cybersecurity risk management program Which of the following actions should be the first priority when developing the program?

Options:
A.

Start building a cybersecurity culture and set the desired behavior using a bottom-up approach

B.

Determine the cybersecurity framework that will establish and report on the effectiveness of the program

C.

Define the cybersecurity risk appetite and perform a cost-benefit analysis of the program

D.

Raise cybersecurity awareness across various departments outside of the IT department

Questions 209

Which of the following strategies for professional development best demonstrates an internal auditor’s competency'?

Options:
A.

Completed education credits

B.

Membership in professional organizations

C.

Subscriptions to sources of relevant professional information

D.

Professional development and training plans

Questions 210

The largest risks facing an organization should be mitigated by which type of controls?

Options:
A.

Entity-level

B.

Activity-level

C.

Transaction-level

D.

Process-level