What Top Quality IIA-CIA-Part1 Exam Is

NEW QUESTION 1
According to IIA guidance, which of the following statements about working papers is false?

• A. They assist in the implementation of recommendations.
• B. They provide support for communication to third parties.
• C. They demonstrate compliance with auditing standards.
• D. They contribute to development of the internal audit staff.

Answer: A

NEW QUESTION 2
The internal audit activity is planning a procurement audit and needs to obtain a thorough understanding of the subcontracting process, which can involve multiple individuals in multiple countries.
Which of the following internal audit tools would be most effective to document the process and the key controls?

• A. Internal control checklist.
• B. Procurement employee survey.
• C. Cross-functional flow chart.
• D. Segregation of duties matrix.

Answer: C

NEW QUESTION 3
Which of the following is considered a violation of The IIA's Code of Ethics?

• A. An auditor conveys public information about an organization's financial condition.
• B. An auditor reports a manager's illegal activity to senior management, rather than reporting the incident to the appropriate external authority.
• C. An auditor receives allegations of fraud from a whistleblower and immediately reports the allegations to senior management.
• D. An auditor reports material deficiencies, despite the fact that management is already aware of the defects.

Answer: C

NEW QUESTION 4
Which of the following are core responsibilities to be included in the internal audit charter?
* 1. Review reliability and integrity of financial and operating information and the means used to identify, measure, classify, and report such information.
* 2. Determine the adequacy and effectiveness of the organization’s systems of internal accounting and operating controls.
* 3. Participate in the planning and performance of audits of potential acquisitions with the organization's outside accountants and other members of the corporate staff.
* 4. Report to those members of management who should be informed of results of audit examinations, the audit opinions formed, and the recommendations made.

• A. 1 and 2.
• B. 1 and 4.
• C. 2 and 3.
• D. 2 and 4.

Answer: A

NEW QUESTION 5
Which of the following would be the most important consideration by the internal audit activity when selecting employees to perform an internal quality assessment?

• A. Their understanding of auditing standards.
• B. Previous experience working with the internal audit activity.
• C. Their reporting line within the organization.
• D. The nature of their regular duties and responsibilities.

Answer: A

NEW QUESTION 6
Which of the following enhances the independence of the internal audit activity?

• A. The chief audit executive (CAE) approves the annual internal audit plan.
• B. The CAE administratively reports to the board.
• C. The audit committee approves the CAE's annual salary increase.
• D. The chief executive officer approves the internal audit charter.

Answer: C

NEW QUESTION 7
A fraud investigation was completed by management, and a proven fraud was communicated to relevant authorities. According to MA guidance, which of the following roles would be most appropriate for the internal audit activity to undertake after the investigation?

• A. Plan employee sessions and team building strategies for the organization to improve awareness of fraud among employees.
• B. Review the investigation and implement any improvements to the process.
• C. Conduct lessons learned sessions to ascertain how the fraud occurred and which controls failed.
• D. Determine why The fraud was not detected earlier and design controls to strengthen early detection.

Answer: C

NEW QUESTION 8
Which of the following is most likely to be considered a control weakness?

• A. Vendor invoice payment requests are accompanied by a purchase order and receiving report.
• B. Purchase orders are typed by the purchasing department using prenumbered forms.
• C. Buyers promptly update the official vendor listing as new supplier sources become known.
• D. Department managers initiate purchase requests that must be approved by the plant superintendent.

Answer: C

NEW QUESTION 9
Which of the following statements is true about The IIA Global Internal Audit Competency Framework?

• A. The core competencies outlined in the framework are not expected of a person undertaking an entry-level position as an internal auditor.
• B. The framework is designed to be used primarily by chief audit executives that are developing indicators to measure the performance of the internal audit activity for which they are responsible.
• C. The framework lists the core competencies internal auditors should possess before attempting to attain The IIA's Certified Internal Auditor certification.
• D. The framework describes competencies needed for individual internal auditors, but not those necessary at the chief audit executive level.

Answer: B

NEW QUESTION 10
Which of the following is an example of a directive control?

• A. Segregation of duties.
• B. Exception reports.
• C. Incentive compensation plans.
• D. Automated reconciliations.

Answer: C

NEW QUESTION 11
Which two of the following are preventive controls in a check disbursement process?
* 1. Daily reconciliation of the bank account used for check disbursements and prompt follow-up of un-reconciled items.
* 2. Segregation of the following duties: establishing new vendors, approving checks, and reconciling the bank account.
* 3. An activity report detailing who accesses the check disbursement system and the nature of any action taken in the system.
* 4. Evidence of strong access controls ensuring that authorized individuals have access only to the functions related to their responsibilities.

• A. 1 and 3.
• B. 1 and 4.
• C. 2 and 3.
• D. 2 and 4.

Answer: D

NEW QUESTION 12
A chief audit executive (CAE) reports functionally to the CEO and administratively to the chief financial officer, both of whom serve on the company's board of directors. According to IIA guidance, which of the following would offer the greatest protection for the independence of the internal audit activity?

• A. Appoint the CAE as a member of the board.
• B. Move the CAE's functional reporting to an executive who is not on the board.
• C. Obtain full board approval of the internal audit activity's annual audit plan.
• D. Move the CAE's functional reporting to the audit committee.

Answer: D

NEW QUESTION 13
Which of the following scenarios best illustrates a rationalization as the root cause of potential fraud?

• A. Managers who have been with the organization for several decades become aware that newly hired, younger managers are being moved more quickly into senior positions.
• B. The controller at a nationwide manufacturing company recently opted to no longer require two-week mandatory vacations for accounting staff.
• C. Security cameras that monitor cash handling at the register are not functioning.
• D. The organization is slowly phasing out three mature products that produce the highest commissions for the sales staff.

Answer: B

NEW QUESTION 14
Non-statistical sampling does not require which of the following?

• A. The sample to be representative of the population.
• B. The sample to be selected haphazardly.
• C. A smaller sample size than if selected using statistical sampling.
• D. Projecting the results to the population.

Answer: C

NEW QUESTION 15
An internal auditor wants to sample data to test an audit theory in a cost-effective way. Which of the following sampling strategies should she use?

• A. Statistical sampling only
• B. Nonstatistical sampling only
• C. A combination of both statistical and nonstatistical sampling.
• D. Neither approach to testing the audit theory would be cost effective.

Answer: B

NEW QUESTION 16
Which of the following offers the best evidence that the internal audit activity has achieved organizational independence?

• A. An independent third party has assessed the organization's system of internal controls to be adequate and effective.
• B. The chief audit executive reports both functionally and administratively to the CEO.
• C. The internal audit charter is drafted properly and approved by the appropriate parties.
• D. The mission statement and strategy of the internal audit activity demonstrates alignment to organizational objectives.

Answer: B

NEW QUESTION 17
An auditor identifies three errors in the sample of 25 entries selected for review (a 12 percent error rate). Based on this result, the auditor assumes that approximately 59 of the total population of 492 entries are incorrect. To reach this assumption, the auditor has used a technique known as which of the following?

• A. Variability tolerance.
• B. Ratio estimation.
• C. Stratification.
• D. Acceptance sampling.

Answer: B

NEW QUESTION 18
Click the Exhibit.

Internal auditors are asked to keep track of how many hours per day they spend planning the audit, conducting the engagement, and writing the audit report. The data for two days has been collected as follows:
Day 1
Day 2
Planning the audit 2 hours
3 hours
Conducting the engagement 1 hour
1 hour
Writing the audit report 2 hours
4 hours
Which of the following graphs depicts the data accurately?

• A. Graph A only
• B. Graph B only
• C. Both A and B.
• D. Neither A nor B.

Answer: C

NEW QUESTION 19
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