A Review Of Approved IIA-CIA-Part1 Exam

Exam Code: IIA-CIA-Part1 (Practice Exam Latest Test Questions VCE PDF)
Exam Name: Certified Internal Auditor - Part 1, The Internal Audit Activitys Role in Governance, Risk, and Control
Certification Provider: IIA
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NEW QUESTION 1
According to IIA guidance, which of the following statements is true regarding periodic internal assessments of the internal audit activity?

  • A. Internal assessments are conducted to benchmark the internal audit activity's performance againstindustry best practices.
  • B. Internal assessments must be performed at least once every five years by a qualified assessor.
  • C. An internal auditor may perform a peer review of a colleague's workpapers, as long as the auditor wasn't involved in the audit under review.
  • D. Follow-up to ensure appropriate improvements are implemented is a recommended, but not mandatory, element of internal assessments.

Answer: C

NEW QUESTION 2
Which of the following techniques would provide the most compelling evidence that a safety hazard exists within a manufacturing facility?

  • A. Observation of the facility during operations.
  • B. Questioning of facility management, including the facility safety officer.
  • C. Analysis of facility operating reports, focusing on instances when breakdowns occurred.
  • D. Review of records involving safety violations, filed by facility production employees.

Answer: A

NEW QUESTION 3
Forty-five percent of an organization's customer payments are submitted online. Eight percent of online payments are rejected. Executive management decides to outsource its online payment services to a contractor that will assume 75 percent of the total value of rejected payments. The organization estimates $1.25 million customer payments due during the contract period.
Which of the following represents the organization's residual risk for online customer payments due?

  • A. $11, 250
  • B. $25, 000
  • C. $33, 750
  • D. $45, 000

Answer: A

NEW QUESTION 4
An internal auditor is evaluating techniques management uses to mitigate risks within a particular product division. Which of the following is an example of risk reduction?

  • A. Management sells the product division to a competitor.
  • B. Management outsources the product division to a third party.
  • C. Management allows the product division to remain unchanged.
  • D. Management modifies the product division to minimize errors.

Answer: D

NEW QUESTION 5
Which of the following is a common type of payroll fraud?

  • A. Unauthorized overtime.
  • B. Fictitious employees.
  • C. Unearned bonuses or commissions.
  • D. Skimming.

Answer: B

NEW QUESTION 6
A headquarters-based internal auditor has been sent to a major overseas subsidiary to conduct various engagements. Initially, the internal auditor spends time to become familiar with local customs and organization's practices while embarking on the first engagement. Which of the following competencies does the internal auditor exercise?

  • A. Communication.
  • B. Persuasion and collaboration.
  • C. Business acumen.
  • D. Governance, risk, and control.

Answer: A

NEW QUESTION 7
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 8
Which of the following is not an objective of internal control?

  • A. Compliance.
  • B. Accuracy.
  • C. Efficiency.
  • D. Validation.

Answer: D

NEW QUESTION 9
According to COSO, which of the following describes a principle related to the control environment?

  • A. The organization identifies and assesses changes that could significantly impact the system of internal control.
  • B. The organization establishes appropriate authorities and responsibilities in the pursuit of objectives.
  • C. The organization selects and develops control activities that contribute to the mitigation of risks.
  • D. The organization performs evaluations to ascertain whether internal control components are present and functioning.

Answer: B

NEW QUESTION 10
Which of the following statements is true regarding assurance services provided to clients outside of the organization?

  • A. Assurance services for outside clients are not covered under the internal audit charter.
  • B. Assurance services for outside clients must be approved on a case-by-case basis by the board of directors.
  • C. The nature of assurance services for outside clients should be defined in the internal audit charter.
  • D. The nature of assurance services for outside clients is the same as for internal clients.

Answer: C

NEW QUESTION 11
Which of the following is the most common method of fraud detection?

  • A. Analytical reviews of high-risk areas.
  • B. Detective controls built into the daily processes.
  • C. Unannounced audits or reviews of programs or departments.
  • D. Tips received from employees or citizens.

Answer: D

NEW QUESTION 12
Which of the following statements accurately describes the responsibility of the internal audit activity regarding IT governance?
* 1. The internal audit activity does not have any responsibility because IT governance is the responsibility of the board and senior management of the organization.
* 2. The internal audit activity must assess whether the IT governance of the organization supports the organization's strategies and objectives.
* 3. The internal audit activity may assess whether the IT governance of the organization supports the organization's strategies and objectives.
* 4. The internal audit activity may accept requests from management to perform advisory services regarding how the IT governance of the organization supports the organization's strategies and objectives.

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

Answer: A

NEW QUESTION 13
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 14
According to IIA guidance, which of the following practices by the chief audit executive (CAE) best enhances the organizational independence of the internal audit activity?

  • A. CAE reviews and approves the annual audit plan.
  • B. CAE meets privately with The CEO at least annually.
  • C. CAE meets privately with The board at least annually.
  • D. CAE reports to the board regarding audit staff performance evaluation and compensation.

Answer: D

NEW QUESTION 15
According to IIA guidance, which of the following external groups is most likely to represent a liability risk, based on activities associated with the organization's corporate social responsibility program?

  • A. Consumers.
  • B. Activists.
  • C. Suppliers.
  • D. Investors.

Answer: B

NEW QUESTION 16
Which of the following would be the most appropriate first step for the board to take when developing an effective system of governance?

  • A. Determine the organization's overall risk appetite.
  • B. Establish a governance committee.
  • C. Delegate authority to members of senior management.
  • D. Identify key stakeholders and their expectations.

Answer: D

NEW QUESTION 17
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 18
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 19
Which of the following responsibilities would fall under the role of the chief audit executive, rather than internal audit staff or the audit manager?

  • A. Manage and support a quality assurance and improvement program.
  • B. Maintain industry-specific knowledge appropriate to the audit engagements
  • C. Set clear performance standards for internal auditors and the internal audit activity.
  • D. Apply problem-solving techniques for routine situations.

Answer: C

NEW QUESTION 20
According to the International Professional Practices Framework, which of the following are allowable activities for an internal auditor?
* 1. Advocating the establishment of a risk management function.
* 2. Identifying and evaluating significant risk exposures during audit engagements.
* 3. Developing a risk response for the organization if there is no chief risk officer.
* 4. Benchmarking risk management activities with other organizations.
* 5. Documenting risk mitigation strategies and techniques.

  • A. 4 and 5 only.
  • B. 1.2, and 3 only.
  • C. 1.2. 4. and 5 only.
  • D. 2. 3. 4. and 5 only.

Answer: C

NEW QUESTION 21
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