Download Certified Internal Auditor - Part 1, The Internal Audit Activity's Role in Governance, Risk, and Control.IIA-CIA-Part1.Test4Prep.2019-01-04.317q.vcex

Vendor: IIA
Exam Code: IIA-CIA-Part1
Exam Name: Certified Internal Auditor - Part 1, The Internal Audit Activity's Role in Governance, Risk, and Control
Date: Jan 04, 2019
File Size: 348 KB
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Demo Questions

Question 1
After several years in the engineering department, an engineer was transferred to the internal audit department. One month later, the new auditor was assigned to an assurance engagement for the engineering department. When the auditor's former engineering supervisor suggested a change in the sample selection method, the auditor consulted with the audit supervisor. They determined that the suggested method would not be as representative and that the original selection method should be used. In this situation, the auditor:
  1. Maintained an independent mental attitude and is therefore objective.
  2. Has subordinated professional judgment, and objectivity is therefore impaired.
  3. Does not have objectivity since the auditor recently transferred from the engineering department.
  4. Does not have independent organizational status since the auditor recently transferred from the engineering department.
Correct answer: C
Question 2
A charitable organization provides substantial grants for important medical research. Assuming marginal controls are in place, which of the following possible frauds 
or misuses of organization assets should be considered the area of greatest risk? 
  1. Senior executives are using company travel and entertainment funds for activities that might be considered questionable.
  2. Purchases of office supplies are made from fictitious vendors.
  3. Grants are made to organizations associated with senior executives.
  4. A payroll clerk has added a fictitious employee.
Correct answer: C
Explanation:
Question 3
If earnings on financial statements for internal use only have been manipulated in the past, an internal auditor is likely to focus on which of the following?
  1. The proper accrual of payables at the end of the interim period.
  2. The timing of revenue recognition and the valuation of inventories.
  3. Whether accounting estimates are reasonable given past actual results.
  4. Whether there have been changes in accounting principles that materially affect the financial statements.
Correct answer: B
Question 4
Which of the following procedures would provide the best evidence of the effectiveness of a credit-granting function?
  1. Observe the process.
  2. Review the trend in receivables write-offs.
  3. Ask the credit manager about the effectiveness of the function.
  4. Check for evidence of credit approval on a sample of customer orders.
Correct answer: B
Question 5
Which of the following best describes how the increased use of computerization may impact an auditor's assessment of the risk of fraud?
  1. Access to assets may be available to information systems personnel as well as to computer users.
  2. Computer controls are generally less effective than human review.
  3. Overrides of key controls may require less collaboration. 
  4. Audit trails are less effective.
Correct answer: A
Question 6
An internal auditor plans to use an analytical review to verify the correctness of various operating expenses in a division. The use of an analytical review as a verification technique would not be a preferred approach if.
  1. The auditor notes strong indicators of a specific fraud involving this account.
  2. The company has relatively stable operations which have not changed much over the past year.
  3. The auditor would like to identify large, unusual, or non-recurring transactions during the year.
  4. The operating expenses vary in relation to other operating expenses, but not in relation to revenue.
Correct answer: A
Question 7
Which of the following is not a benefit of using information technology in solving audit problems?
  1. It helps reduce audit risk.
  2. It improves the timeliness of the audit engagement.
  3. It increases audit opportunities.
  4. It improves the auditor's judgment.
Correct answer: D
Explanation:
Question 8
An organization has developed a large database that tracks employees, employee benefits, payroll deductions, job classifications, and other similar information. In order to test whether data currently within the automated system are correct, an auditor should:
  1. Use test data and determine whether all the data entered are captured correctly in the updated database.
  2. Select a sample of data to be entered for a few days and trace the data to the updated database to determine the correctness of the updates.
  3. Use generalized audit software to provide a printout of all employees with invalid job descriptions. Investigate the causes of the problems.
  4. Use generalized audit software to select a sample of employees from the database. Verify the data fields.
Correct answer: D
Question 9
In order to ensure that the internal auditors have the objectivity required by the Standards, the chief audit executive should:
  1. Demonstrate willingness to include in engagement final communications all matters believed to be important.
  2. Require all auditors to sign statements attesting to their independent mental attitudes and honest belief in their work product.
  3. Carefully assign personnel to individual audit engagements and require auditors to disclose all conflicts of interest.
  4. Appraise each auditor's performance on each audit assignment.
Correct answer: C
Question 10
Which of the following audit activities is within the scope of assurance activities as stated in the International Professional Practices Framework?
  1. Review a make-or-buy decision and report a recommendation to management for approval.
  2. Participate in negotiations for a corporate acquisition.
  3. Assess financing alternatives for a new generator.
  4. Perform an evaluation of management's planning process. 
Correct answer: D
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