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Free IIA IIA-CIA-Part1 Practice Exam with Questions & Answers | Set: 9

Questions 121

In an internal audit charter, which of the following statements regarding the chief audit executive (CAE) would be most directly related to describing the responsibilities of the internal audit activity*?

Options:
A.

The CAE shall report functionally to the board and administratively to the chief financial officer

B.

The CAE and the Internal audit activity shall have full access to any and all records and personnel of the organization that are relevant to audit engagements

C.

The CAE and the internal audit activity shall be independent and objective in performing their work.

D.

The CAE shall report periodically on the performance of the internal audit activity relative to its plan

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Questions 122

Which of the following scenarios is a characterize of an organization with a highly effective ethical culture?

Options:
A.

An organization implements and communicates to staff a formal and comprehensive code of conduct, which is clear and understandable.

B.

An organization waives reference and background checks when hiring for certain sensitive positions in order to not violate potential employees' rights to privacy.

C.

An organization punishes senior management more harshly for ethics violations than it would for lower-level staff to send a message throughout the organization.

D.

An organization conducts surveys of employees, suppliers, and customers once every five years to determine the slate of the ethical climate in the organization.

Questions 123

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?

Options:
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 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.

C.

Internal auditors may conduct an engagement in a business unit at any point after providing a training workshop in that area.

D.

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.

Questions 124

Considering the concepts of organization wide risk management and the system of internal controls, the internal audit activity as a whole can be considered which of the following types of control?

Options:
A.

Transaction-level control.

B.

Management-oversight control.

C.

Governance control.

D.

Process-level control.

Questions 125

Which of the following organizations is adopting an acceptance technique in terms of its risk response?

Options:
A.

An organization that takes no action in managing the possible exposure to an earthquake.

B.

An organization that opts out of investing in a new region due to volatility in foreign exchange rates.

C.

An organization that takes out insurance policies to protect its property and equipment.

D.

An organization that deploys policies and procedures to guide business activities and practices

Questions 126

In which of the following scenarios would the internal auditor’s objectivity be best protected?

Options:
A.

A former human resources manager conducts an effectiveness review of the appointment and termination process six months after transferring to the internal audit activity.

B.

An accounts payable clerk assists the internal auditors during an effectiveness review of the physical access controls to the server room.

C.

An internal auditor writes the system manual for a newly acquired payroll software application prior to conducting an effectiveness review of the system.

D.

An internal auditor conducts an effectiveness review of an organization's business continuity plan in which his son is a minority stockholder.

Questions 127

Which of the following indicates an appropriate disclosure of a potential nonconformance with the Standards?

Options:
A.

An external assessment of the internal audit activity was last performed six years ago.

B.

The internal audit activity has been in existence for four years but has not performed an external assessment.

C.

An internal assessment is not performed every year.

D.

The internal audit activity has been in existence for two years and has documented only an internal assessment.

Questions 128

According to MA guidance, which of the following best describes how often the chief audit executive should review the quality assurance and improvement program of the internal audit activity?

Options:
A.

Whenever the business objectives of the organization change

B.

Just prior to an external assessment of the internal audit activity

C.

At the completion of each engagement.

D.

Progressively on a day-to-day basis

Questions 129

Which of the following statements is true with regard to the quality assurance and improvement program (GAIP)?

Options:
A.

As the head of the organization, the CEO selects and appoints the external quality assessment team to perform the OAIP reviews.

B.

The chief audit executive determines the scope and frequency of both internal and external quality assessments based on the availability and capacity of resources in accordance with the annual internal audit plan.

C.

Minutes of meetings held with senior management and the board to discuss the scope and frequency of internal and external assessments support the OAIP reporting requirement.

D.

The internal audit activity needs to assess whether each engagement on the annual internal audit plan is conducted in conformance with the Standards.

Questions 130

Which of the following best describes the risk created when a manager bypasses organizational policies and procedures in order to meet an organization’s objective?

Options:
A.

Accountability/reward risk.

B.

Monitoring failure risk.

C.

Communication failure risk.

D.

Knowledge/skills risk

Questions 131

According to NA guidance which of the following should be documented in the internal audit chatter?

Options:
A.

The risk assessment process applied by the internal audit activity

B.

The organization's internal control framework used by the internal audit activity

C.

The nature of consulting services provided by the internal audit activity

D.

The performance evaluation process used by the internal audit activity

Questions 132

Which of the following is part of a fraud detection program?

Options:
A.

Whistleblower hotline.

B.

Authority limits.

C.

Background investigations

D.

Evaluation of compensation programs.

Questions 133

Which of the following is most important for an internal auditor to consider when developing an approach for an audit engagement in a foreign country?

Options:
A.

Currency exchange rates, as they relate to internal audit-related expenses.

B.

Differences in typical working hours, compared to other countries.

C.

The effects of subtle language nuances on translations.

D.

Accepted practices that may be illegal in other countries.

Questions 134

During an audit of the purchasing department, an internal auditor identifies significant issues that could affect the organization's financial reporting. Management disagrees with the audit results. Which of the following responses best demonstrates the internal auditor has the necessary competencies related to professional Judgment and conflict management?

Options:
A.

The auditor maintains his convictions and continues to proceed with the review process despite management's concerns related to the results.

B.

The auditor bypasses management, discusses the results with the board, and seeks the board's input on how best to address the recommendations.

C.

The auditor consults with other members of the audit team, and together they develop alternative recommendations that management may be more likely to accept.

D.

The auditor meets with management to discuss the results and obtain a better understanding of the specific concerns.

Questions 135

Which of the following is a way to demonstrate an individual internal auditor's competency through continuing professional development?

Options:
A.

Create different training budgets for each of the internal auditors

B.

Define average training hours per auditor as a team performance measure

C.

Analyze internal audit client survey feedback following audits

D.

Review training records for all internal auditors