IIA-CIA-PART1 Online Practice Questions and Answers

In order to ensure that the internal auditors have the objectivity required by the Standards, the chief audit executive should:

A. Demonstrate willingness to include in engagement final communications all matters believed to be important.

B. Require all auditors to sign statements attesting to their independent mental attitudes and honest belief in their work product.

C. Carefully assign personnel to individual audit engagements and require auditors to disclose all conflicts of interest.

D. Appraise each auditor's performance on each audit assignment.

It would be appropriate for an internal audit activity to use consultants with expertise in health- care benefits when the internal audit activity is:

I. Conducting an audit of the organization's estimate of its liability for post retirement benefits, which include health care benefits.

II. Comparing the cost of the organization's health care program with that of other programs offered in the industry.

III.

Training its staff to conduct an audit of health care costs in a major division of the organization.

A.

I only

B.

I and III only

C.

II and III only

D.

I, II, and III.

Auditors 1, 2, and 3 work out of various offices. Each must be assigned to one, and only one, of three audit locations (A, B, or C). The cost of sending each auditor to each location is listed below:

Audit Locations

Auditor 1 A B

Auditor 2 $200 $300 $400

Auditor 3 $400 $300 $600

Auditor 4 $200 $200 $500

The minimum cost with which this assignment can be accomplished is:

A. $800

B. $900

C. $1, 000

D. $1, 100

The chairperson of an organization's audit committee has obtained a risk management report that identifies significant industry concerns that impact the organization. The chairperson has asked the chief audit executive (CAE) to review these concerns and advise if they are relevant to the organization. How should the CAE respond?

A. Accept the engagement but communicate only with the audit committee to protect the confidentiality of the request.

B. Decline the engagement because it is outside of the scope of the internal audit charter.

C. Decline the engagement because it impairs the internal audit activity's independence.

D. Accept the engagement but inform senior management of the request.

In a manufacturing company, which department would be the internal audit activity's most reliable source of information on the controls over minimizing defective goods?

A. Manufacturing.

B. Quality control.

C. Research and development.

D. Inventory management.

The first stage in the development of a crisis management program is to:

A. Formulate contingency plans.

B. Conduct a risk analysis.

C. Create a crisis management team.

D. Practice the response to a crisis.

During the planning phase of an audit of suspected overbilling on contracts for security services, an internal auditor should perform all of the following except:

A. Interview an official of the security services company to determine the cause of recent increases in billings for services.

B. Interview the manager who requested the audit engagement.

C. Obtain a copy of the contract between the two organizations.

D. Prepare an engagement program.

An internal auditor is planning an operational audit of the accounts payable function. Which of the following best mitigates the risk of the organization being a victim of disbursement fraud by employees?

A. Accounts payable payment records are checked against supplier invoices.

B. Accounts payable are aged by vendors.

C. The accounts payable trial balance is reconciled to the general ledger.

D. The accounts payable function is properly segregated from the cash custody function.

Which of the following actions would be a violation of the IIA Code of Ethics?

A. Excluding an issue in the final audit report after management has resolved the issue.

B. Reporting information that could be damaging to the organization, at the request of a court of law.

C. Failing to return a free promotional pen to a vendor related to the audit activity.

D. Declining an audit engagement for which the auditor does not have the necessary experience or training.

An internal audit activity (IAA) provided assurance services for an activity it was responsible for during the preceding year.

As a result, which IIA Code of Ethics principle is presumed to be impaired?

A. Competence.

B. Flexibility.

C. Objectivity.

D. Independence.

Which of the following statements is true regarding the use of non-statistical sampling in auditing control tests?

A. It considers tolerable deviation rate more effectively than does statistical sampling.

B. Sampling risk will be accurately quantified through non-statistical sampling.

C. Non-statistical sample results must be projected to the population.

D. Lesser evidence is required to support a conclusion than for statistical sampling.

According to IIA guidance, the results of a formal quality assessment should be reported to which of the following groups?

A. The audit committee and senior management.

B. The audit committee and the external auditors.

C. Senior management and management of the audited area.

D. Senior management and the external auditors.

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.

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.

Which of the following controls could an internal auditor reasonably conclude is effective by observing the physical controls of a large server room?

A. Adequate signs are in place to assist in locating safety equipment.

B. Servers are secured individually to their racks by locks.

C. Foam fire extinguishers are operable to protect against electrical fires.

D. Swipe card access is required to gain access to the server room.