IIA-CIA-Part1 Exam Dumps (V15.02) – Proven Way to Crack Your CIA Exam Part One: Essentials of Internal Auditing Exam

1. Which of the following is the most effective way for internal auditors to determine whether ethical values are followed throughout the organization?

2. Which of the following best describes the Standards requirement for collective proficiency of the internal audit activity?

3. A snow removal company is conducting a scenario planning exercise where participating employees consider the potential impacts of a significant reduction in annual snowfall for the coming winter.

Which of the following best describes this type of risk?

4. An internal auditor is performing testing to gather evidence regarding an organization’s inventory account balance and is mindful of the possibility that the sample used might support the conclusion that the recorded account balance is not materially misstated when, in fact, it is.

The auditor's concern best describes which of the following risks?

5. Which of the following is the most appropriate way to ensure that a newly formed internal audit activity remains free from undue influence by management?

6. Which of the following statements is true with regard to services provided by the internal audit activity?

7. The internal audit activity completed its analysis of sample transactions to determine occurrences of double billings According to If A guidance, which of the following best demonstrates that internal auditors exercised due professional care during the review?

8. While auditing an organization's credit approval process, an internal auditor learns that the organization has made a large loan to another auditor's relative.

Which course of action should the auditor take?

9. Which of the following is most likely to be considered a control weakness?

10. An internal audit activity includes in its audit reports the assertion that its work is performed in conformance with the International Standards for the Professional Practice of Internal Auditing (Standards). A recent external quality assessment concluded that the internal audit activity had substantial deficiencies that impact its overall operations.

According to IIA guidance, which of the following is the most appropriate action for issuing future audit reports?

11. Which of the following types of policies best helps promote objectivity in the interna! audit activity's work?

12. According to NA guidance, which of the following conditions would enhance the independence of the internal audit activity?

13. A series of incidents over the past year reveals several members of senior management possess a limited understanding of the concept and impact of fraud.

Which of the following would be the most effective way to approach this issue?

14. In which of the following situations may the internal audit activity report conformance with the Standards?

15. A chief audit executive (CAE) identifies that the internal audit activity lacks a necessary skill to perform a management request for a consulting engagement.

According to IIA guidance, which of the following is the most appropriate action the CAE should take regarding the request?

16. Which of the following statements best demonstrates application of due professional care during an assurance engagement?

17. Which of the following best describes the risk contained in an initial public offering for a new stock?

18. An internal auditor is updating the risk register for risks identified during a recent organizational risk assessment.

According to the Standards, which of the following would the auditor include in the risk register?

19. Which of the following would be considered a monitoring activity in organization wide risk management?

20. Which of the following documents are internal auditors most likely to be asked to sign as a demonstration of due professional care?

A description of their job responsibilities,

21. Which of the following processes does the board manage to ensure adequate governance?

22. Which of the following best describes the internal audit activity's contribution to the implementation of the risk management framework?

23. During a review of employee benefits, a staff internal auditor observed an ambiguity in the incentive compensation policy. If reported, it could negatively impact the internal auditor's compensation.

Which of the following would encourage the internal auditor to be objective in his work?

24. During an assurance engagement, an internal auditor uses benchmarking research to support preparation of a report to stakeholders that contains significant findings about control deficiencies.

Which of the following skills did the auditor demonstrate?

25. An internal auditor observed that sales staff are able to modify or cancel an order in the system prior to shipping* She wonders whether they can also modify orders after shipping.

Which of the following types of controls should she examine?

26. Which of the following statements best illustrates why internal auditors assess soft controls?

27. While conducting an engagement in the procurement department, the internal auditor noticed that the department head’s travel reports showed minor travel expenses, and there were no charges for hotels, meals, or transportation. However, the auditor knew that the department head frequently traveled worldwide to meet with suppliers and visit their production sites.

Which of the following would be the most appropriate next step for the auditor?

28. Which of the following best illustrates the application of due professional care during an audit of the procurement department?

29. Which of the following procedures will best help an internal auditor assess operating effectiveness of fraud prevention and detection controls?

30. Operational management in the IT department has developed key performance indicator reports, which are reviewed in detail during monthly staff meetings.

This activity is designed to prevent which of the following conditions?

31. Which of the following would be considered a violation of The HAfs mandatory guidance on independence?

32. Management would like to self-assess the overall effectiveness of the controls in place for its 200-person manufacturing department.

Which of the following client-facilitated approaches is likely to be the most efficient way to accomplish this objective?

33. Which of the following could increase risks to the organization’s control environment?

34. A chief audit executive (CAE) has no direct access to the board.

According to IIA guidance, which of the following is the most appropriate way for the CAE to react?

35. An internal audit activity maintains a quality assurance and improvement program that includes annual self-assessments. The internal audit activity includes in each engagement report a clause that the engagement is conducted in conformance with the International! Standards for the Professional Practice of Internal Auditing (Standards).

Which of the following justifies inclusion of this clause in the reports?

36. Who is responsible for ensuring internal auditors’ continuing professional development?

37. Which of the following controls would best mitigate the risk of fraud in the bidding process?

38. Evidence discovered during the course of an engagement suggests that multiple incidents of fraud have occurred. There do not appear to be sufficient controls in place to prevent reoccurrence.

Which of the following is the internal auditor's most appropriate next step?

39. Which of the following is the primary engagement responsibility of an entry-level internal auditor?

40. Which of the following factors is most important for internal auditors to consider when prioritizing fraud risks?

41. According to IIA guidance, which of the following statements is true regarding due professional care?

42. Senior management has decided to adopt the key principles approach of the ISO 31000 risk management framework.

According to IIA guidance, which of the following principles is most appropriate when implementing the risk management process in a dynamic agency?

43. A multinational organization has asked the internal audit activity to assist in setting up the organization’s risk management system. The chief audit executive (CAE) agrees to take on the engagement as a consultant.

Which of the following tasks is appropriate for the CAE to undertake?

44. Upon joining the internal audit activity, each new auditor receives a copy of the audit handbook.

Which of the following handbook policies has the greatest risk of compromising audit objectivity?

45. Which of the following resources would be most effective for an organization that would like to improve how it informs stakeholders of its social responsibility performance?

46. Identify and mitigate risks to help meet the CSR program objectives.

47. Which of the following is an example of a directive control?

48. Which of the following is a true statement regarding whistleblowing?

49. Which of the following actions is a chief audit executive most likely to take in order to identify gaps in the internal audit activity’s knowledge, skills, and competencies?

50. Which of the following skills is most important for an internal auditor who facilitates control self-

assessment workshops to possess?

51. In which of the following ways can a chief audit executive demonstrate to the board that the internal audit activity collectively possesses all of the skills needed to complete its annual goals?

52. An engagement supervisor obtains facilities maintenance reports from a contractor during an audit of third-party services.

Which of the following is the source of authority for the engagement supervisor to make such contact outside the organization?

53. Applying ISO 31000, which of the following is part of the external context for risk management?

54. The internal audit activity is asked to review the effectiveness of controls around the disposal of chemical waste. However, the internal auditors on staff lack the necessary skills to conduct this review.

Which of the following would be the most appropriate approach?

55. A newly appointed chief audit executive (CAE) started analyzing the organization's policies in an attempt to customize them to address internal audit specifics.

Which of the following organizationwide practices is most likely to be acceptable to the CAE?

56. After being assigned to an audit of the accounts payable process, an internal auditor privately notifies the chief audit executive that she is a finalist for an open manager position within the accounts payable department.

Which of the following is the IIA Code of Ethics principle that the auditor upheld?

57. If the skills and competencies are not present within the internal audit activity to complete an ad-hoc assurance engagement, which of the following is an acceptable resolution?

58. Which of the following actions should the internal audit activity take during an audit engagement when examining the effectiveness of risk management processes?

59. A regional entertainment organization is in the process of developing a corporate social responsibility (CSR) policy. Management invites ideas from employees when developing the CSR policy.

Which of the following is the most appropriate idea to include?

60. In which scenario might it be considered problematic for the chief audit executive (CAE) to provide assurance services over the payroll function?

61. Which of the following would be the most effective fraud prevention control?

62. At a conference, an interna! auditor presented a new computer-assisted audit technique developed by his organization. The presentation included sample data derived from performing audit engagements for the organization. Travel costs were paid by the conference organizers, and the trip was approved by the chief audit executive (CAE).

However, neither management nor the CAE was aware that the internal auditor would be making a

presentation based on work completed for the organization.

According to IIA guidance, which of the following statements is most relevant regarding the actions of the auditor?

63. The board of a newly established organization was discussing the contents of the draft internal audit charter One board member suggested adding to the charter an obligation for the internal audit activity to develop controls in business procedures. The board member explained that the new organization needs professional-level developers, internal auditors have the necessary skills and competencies, and the internal audit activity is well positioned to assume this responsibility.

Which of the following would be a potential concern if the board member’s suggestion is adopted?

64. In an assurance engagement focused on the adequacy of organization wide risk management practices, which of the following best describes a primary area of interest for the engagement?

65. Which of the following documents would promote objectivity within an organization's internal audit activity?

66. According to NA guidance, which of the following provides the best evidence of conformance with the Standards with respect to the proficiency required of the internal audit activity?

67. An internal auditor believes that the internal audit activity's independence is impaired.

Which of the following actions should the internal auditor take first?

68. Management assessed the organization’s risk of expanding operations into a new, but volatile, region and began looking for a compatible local partner to manage sales and distribution.

Which of the following best describes this risk management technique?

69. In which of the following ways could stakeholders be engaged in corporate social responsibility efforts?

70. According to IIA guidance, which of the following statements is true regarding reporting the results of the quality assurance and improvement program?

71. Which of the following best describes the internal audit activity’s responsibility within a risk and control framework?

72. Which of the following best demonstrates that the internal audit activity is using due professional care?

73. Which of the following best demonstrates conformance with the Standards relating to continuing professional development of internal auditors?

74. If an internal auditor suspects fraud during an engagement which of the following is expected of the auditor?

75. Which of the following statements best describes the difference between risk appetite and risk tolerance?

76. An internal auditor discovered fraud while performing an audit of an organization’s procurement process.

Which of the following describes the greatest benefit of using forensic auditing techniques in this scenario?

77. Which of the following best describes the type of risk that an adequately designed and effectively operating system of internal controls should mitigate?

78. Which of the following is an example of a detective control?

79. Which of the following needs to be established prior to undertaking an assessment of the quality assurance and improvement program?

80. Skimming involves stealing cash or assets from the organization and is normally concealed by adjusting the organization’s records.

4, Disbursement fraud occurs when a person causes the organization to issue a payment for fictitious goods or services.

81. Which of the following most accurately describes the role of the board when it comes to organizational governance?

82. Which of the following activities is most likely to require a fraud specialist to supplement the knowledge and skills of the internal audit activity?

83. Assisting the controller in developing and monitoring a series of business process indicators, which are historically correlated with, but independent of sales.

84. Which of the following scenarios would most significantly restrict the areas where internal audit could perform assurance services?

85. According to NA guidance, which of the following describes the primary reason to implement environmental and social safeguards within an organization?

86. The chief audit executive (CAE) of a new internal audit activity is creating an internal audit charter According to IIA guidance, which of the following terms is most likely to be included in the charter?

87. According to NA guidance, which of the following practices by the chief audit executive (CAE) best enhances the organizational independence of the internal audit activity?

88. Which of the following statements is true regarding electronic funds transfer (EFT)?

89. According to the 11A Code of Ethics, which of the following is required with regard to communicating results?