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Free IIA IIA-CIA-Part1 Practice Exam with Questions & Answers | Set: 7

Questions 91

According to IIA guidance, which of the following best describes expense reimbursement fraud?

Options:
A.

Theft of cash after it is recorded in the books

B.

Theft of cash before it is recorded in the books

C.

Theft of assets through fictitious or inflated invoices

D.

Theft of assets through false mileage travel logs and meal charges

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Questions 92

A newly appointed chief audit executive (CAE) is tasked with creating a new internal audit activity within the organization. Which of the following would the CAE need to include in the new internal audit charter?

Options:
A.

The requirement to provide an annual cost analysis that justifies having an internal audit activity

B.

The specific engagements that the internal audit activity will perform for the organization

C.

The board s oversight role and responsibilities pertaining to the internal audit activity

D.

The relevant regulations that will guide the internal audit activity's regulatory compliance assessments

Questions 93

Which of the following statements is true regarding control activities'?

Options:
A.

Control activities are defined by management through risk mitigation strategies

B.

Control activities should be defined for all business processes

C.

If two organizations have identical objectives and structures their control activities would be the same

D.

Organizations that are less regulated generally have more complex control activities than highly regulated organizations

Questions 94

Which of the following conditions classifies an engagement as a consulting service provided by the internal audit activity?

Options:
A.

The internal auditor assigned to the engagement previously worked in the area under review and lacks objectivity.

B.

The internal audit engagement will involve providing an opinion on the effectiveness of controls.

C.

The internal auditor assigned to the engagement was specifically requested by management of the area under review.

D.

he internal audit engagement involves only two parties: the internal auditor and the engagement client.

Questions 95

Which of the following actions should the audit committee take to promote organizational independence for the internal audit activity?

Options:
A.

Delegate final approval of the risk-based internal audit plan to the chief audit executive (CAE).

B.

Approve the annual budget and resource plan for the internal audit activity.

C.

Assist the CAE with hiring objective and competent internal audit staff.

D.

Encourage the CAE to communicate and coordinate with the external auditor.

Questions 96

The internal audit activity audited an organization's risk management function multiple times, and the recommendations that were made remain unaddressed by the head of risk management. Which of the following would be the next step for the internal audit activity?

Options:
A.

The internal audit activity should add value by implementing the recommendations on management's behalf.

B.

The chief audit executive (CAE) must discuss this matter with senior management and the board

C.

The CAE should determine which recommendations to implement based on the severity of the associated risks.

D.

The internal audit activity, led by the CAE. should assume responsibility for risk management function.

Questions 97

Outsourcing a business activity is considered which of the following risk management techniques?

Options:
A.

Sharing a risk.

B.

Avoiding a risk.

C.

Reducing a risk.

D.

Mitigating a risk

Questions 98

According to IIA guidance, which of the following is ultimately responsible for seeing that the internal control system of an organization’s social responsibility program is effective?

Options:
A.

Senior management

B.

Internal audit activity.

C.

All employees.

D.

Board of directors.

Questions 99

Guidelines need to be set for various levels of suspected fraud within an organization and when it would be reported to the audit committee. Which of the following would be

reported at the next meeting?

Options:
A.

Minor theft of less than $10,000, not involving senior management.

B.

Theft using collusion for more than $10,000. but not involving senior management.

C.

Denial of access to requested employees during an audit.

D.

Discussion of replacement of the chief audit executive.

Questions 100

According to IIA guidance, which of the following statements is true regarding risk management in an organization?

Options:
A.

The risk management function has the sole responsibility for identifying and managing risks in all departments

B.

Risk management is a core responsibility of the internal audit activity

C.

The internal audit activity should consider the organization’s maturity, structure, and the competitive environment to establish the organization’s risk appetite

D.

The internal audit activity may use a risk management or control framework to assist in risk identification

Questions 101

Which of the following is a primary responsibility of senior management with respect to ethical violations?

Options:
A.

Senior management provides oversight for the organization's ethical climate.

B.

Senior management promotes an ethical culture in the organization.

C.

Senior management assesses the effectiveness of the organization’s ethical programs.

D.

Senior management reviews major ethical policies in the organization for compliance

Questions 102

Which of the following should catch the internal auditor's attention as a potential red flag for fraud?

Options:
A.

The accounting unit keeps detailed records and preserves supporting documentation in excess of company requirements

B.

One of the subsidiaries has more bank accounts than any other comparable subsidiary

C.

The same external audit firm has been with the company for three years without rotation

D.

The arithmetic median tenure of employees working at production facilities is 15 years

Questions 103

Which of the following would the chief audit executive be required to disclose in the communication of quality assessment results to senior management and the board?

Options:
A.

The cost and frequency of both internal and external assessments.

B.

Any assumptions made by the assessment team

C.

A potential conflict of interest of the assessment team.

D.

The assessment team’s execution plan of relevant procedures.

Questions 104

An engagement supervisor noted that an internal auditor's personal relationship with a process owner resulted in the auditor providing a favorable and partial assessment during an audit within that process owner's area. According to MA guidance, which of the following should be used to manage this impairment?

Options:
A.

An internal audit charter.

B.

An employee disciplinary policy.

C.

A functional audit committee.

D.

A functional reporting placement.

Questions 105

An internal audit of an organization's disbursement department revealed that multiple payments were made to legitimate vendors bearing fraudulent banking information belonging lo employees in the department. These vendors were initially set up with accurate banking information but were subsequently modified by disbursement officers with access to the vendor management system. Which of the following controls would have likely prevented the fraudulent modification of vendors' banking information?

Options:
A.

Management periodically reviews and verifies the information in the vendor master Tile.

B.

Management's approval is required for update to vendors' banking information.

C.

Management randomly audits a sample of payments to verify the accuracy of vendors' banking information.

D.

Management's approval is required before payments can be processed.