[Oct-2021] IIA IIA-CIA-Part1 Official Cert Guide PDF
Exam IIA-CIA-Part1: Essentials of Internal Auditing - TroytecDumps
NEW QUESTION 10
Which of the following types of information would an internal auditor expect to find in the supporting documentation for a high-level accounts payable process flowchart?
- A. The payment terms and credit limit of the vendor to be paid.
- B. The number of payments paid before the due date of the invoice.
- C. An overview of the steps for validating invoices.
- D. A copy of the new customer request form.
Answer: C
Explanation:
Section: Volume D
NEW QUESTION 11
Which of the following roles, if undertaken by an internal auditor, would have the greatest potential for conflict with the Standards regarding objectivity?
- A. Ethics advocate.
- B. External audit liaison.
- C. IT system designer.
- D. Product development team consultant.
Answer: C
NEW QUESTION 12
In order to be organizationally independent, the chief audit executive should report administratively to the
[List A] and functionally to the [List B].
[List A]
[List B]
- A. Chief executive officer
Chief financial officer - B. Chief executive officer
Board of directors - C. Audit committee
Board of directors - D. Audit committee
Chief financial officer
Answer: B
NEW QUESTION 13
After being terminated due to downsizing,an internal auditor finds a different job with an organization in the same industry. Which of the following actions would violate the IIA Code of Ethics?
- A. In preparing for an audit at the previous organization,the auditor had conducted a great deal of research on the Internet at home to identify best practices for the management of a treasury function. The auditor has retained much of the research and uses it to conduct an audit of the new employer's treasury function.
- B. At the new organization,the auditor is asked to develop forms to implement probability-proportional-to-size sampling. Although unsure of how to perform this type of sampling,the auditor proceeds without asking for assistance.
- C. To determine audit priorities in the new job,the auditor uses the audit risk approach that the auditor's previous employer used,without receiving permission to do so.
- D. In the first week at the new organization,the auditor discovers a high fraud risk surrounding the organization's database and suggests that the information technology department implement a new password system to prevent fraudulent actions before they occur.
Answer: B
Explanation:
Topic 6, Volume F
NEW QUESTION 14
An internal auditor is conducting an assessment of the organization's fraud prevention program using the COSO enterprise risk management framework. According to this framework, which of the following activities would fall under the control environment component for preventing fraud?
1. The organization uses an automated authority approval matrix to control payments.
2. The organization has a whistleblower hotline that is available to employees.
3. Annually, every manager completes a comprehensive fraud assessment of his or her department.
4. Annually, the organization reviews and communicates the code of expected behavior.
- A. 2 and 4.
- B. 1 and 3.
- C. 2 and 3.
- D. 1 and 2.
Answer: A
NEW QUESTION 15
Which type of objectives can best be described as broad goals that promote the effective andefficient use of resources?
- A. Compliance objectives.
- B. Strategic objectives.
- C. Operational objectives.
- D. Reporting objectives.
Answer: C
NEW QUESTION 16
According to IIA guidance, which of the following statements about working papers is false?
- A. They provide support for communication to third parties.
- B. They contribute to development of the internal audit staff.
- C. They assist in the implementation of recommendations.
- D. They demonstrate compliance with auditing standards.
Answer: C
NEW QUESTION 17
Which of the following is not an appropriate role of the internal audit activity in governance activities?
- A. Monitor compliance with the organization's ethics policies.
- B. Support the board in enterprise-wide risk assessment.
- C. Ensure the timely implementation of audit recommendations.
- D. Discuss areas of significant risk.
Answer: C
Explanation:
Section: Volume B
NEW QUESTION 18
A small not-for-profit organization with limited resources is unable to adequately maintain appropriate segregation of duties. Considering the organization's resource constraints, which type of controls would best mitigate segregation of duty risks?
- A. Compensating controls.
- B. Application controls.
- C. Preventive controls.
- D. Detective controls.
Answer: A
Explanation:
Section: Volume D
NEW QUESTION 19
A furniture manufacturer has installed a new fire sprinkler system at its central warehouse and canceled the existing fire insurance policy on that property. What change of risk response strategy does this course of action most likely reflect?
- A. From acceptance to avoidance.
- B. From sharing to reduction.
- C. From acceptance to reduction.
- D. From sharing to avoidance.
Answer: B
NEW QUESTION 20
An internal auditor finds during an engagement that payment for the organization's general insurance policy is two months overdue. The issue is informally mentioned to the finance department which immediately submits the invoice for payment. The auditor decides to exclude this finding from the final audit report as the oversight was immediately corrected and there were no consequences because of this late payment.
Which of the following rules of conduct as described in the IIA Code of Ethics, did the auditor fail to uphold?
- A. Integrity.
- B. Confidentiality.
- C. Objectivity.
- D. Competency.
Answer: C
NEW QUESTION 21
An auditor plans to analyze customer satisfaction, including. (1) customer complaints recorded by the customer service department during the last three months; (2) merchandise returned in the last three months; and (3) responses to a survey of customers who made purchases in the last three months.
Which of the following statements regarding this audit approach is correct?
- A. Analysis of three months' activity would not evaluate customer satisfaction.
- B. Steps 1 and 2 of the analysis are not necessary or cost-effective if the customer survey is comprehensive.
- C. Although useful, such an analysis does not address any risk factors.
- D. The survey would not consider customers who did not make purchases in the last three months.
Answer: D
Explanation:
Section: Volume A
NEW QUESTION 22
The top three sales representatives for a company consistently include non-allowable charges on their expense reports. Line management is reluctant to deny reimbursement of the charges for fear of losing the sales representatives. This situation has the greatest negative impact on which of the following internal control components?
- A. Monitoring.
- B. Information and communication.
- C. Control environment.
- D. Control activities.
Answer: C
NEW QUESTION 23
According to the Standards, which of the following statements about effective governance is not true?
- A. It relies on internal controls to be effective.
- B. It considers risk when setting strategy.
- C. Its structures are distinct from risk management structures.
- D. It is implemented by the board or an equivalent body.
Answer: C
NEW QUESTION 24
Which domain of the COBIT framework addresses the maintenance and change management of existing systems to ensure alignment with business needs and objectives?
- A. Acquire and implement.
- B. Monitor and evaluate.
- C. Deliver and support.
- D. Plan and organize.
Answer: A
NEW QUESTION 25
During an audit engagement, the internal auditor discussed a risk mitigation recommendation with the manager of the area under review. The manager disagreed with the risk assessment and recommendation. The two failed to come up with an alternative solution, and the auditor decided to proceed with including the original recommendation in the engagement report. Which of the following is especially important in dealing with this type of situation?
- A. Technical skills in the area under review.
- B. Professional qualifications and certification in internal auditing.
- C. Confidentiality and independence.
- D. Soft skills in communication, negotiation, and collaboration.
Answer: D
NEW QUESTION 26
Which of the following would provide the most reliable information on the risk associated with an auditable activity?
- A. Event scenarios with regression analysis.
- B. Management assessment and corroboration by the internal audit activity.
- C. Consequences and economic predictability of loss.
- D. Past audit findings and instances of management failures.
Answer: B
NEW QUESTION 27
Which of the following scenarios would represent the greatest threat to the authority of the internal audit activity (IAA)?
- A. Responsibility for risk management processes were removed from the IAA and placed under a newly created chief risk officer.
- B. An internal auditor was informed by the chief financial officer that client survey results would be unfavorable unless the auditor changed a finding in the report.
- C. The IAA was denied access to expenditure and budget requirement reports because the reports were considered to be financial administrative matters.
- D. A change was implemented requiring the IAA to report administratively to the organization's chief legal counsel rather than the board.
Answer: C
NEW QUESTION 28
Which of the following controls within a spreadsheet would address the risk of logic errors?
1. The spreadsheet contains formulas that foot and cross-foot data.
2. The spreadsheet is locked to protect cell formulas from being inadvertently changed.
3. Spreadsheets are included in nightly backup processes.
4. Check-in and check-out software is used to manage version control.
- A. 1 and 3 only
- B. 1 and 2 only
- C. 2 and 4 only
- D. 3 and 4 only
Answer: B
Explanation:
Section: Volume D
NEW QUESTION 29
Which of the following actions best demonstrates that an internal auditor is exercising due professional care?
- A. The auditor performs thorough reviews and provides absolute assurance of regulatory compliance.
- B. The auditor is cognizant of reducing travel expenses by combining a personal vacation with a business trip.
- C. The auditor is alert to the possibility of fraud and activities where irregularities are most likely to occur.
- D. The auditor recommends improvements for all of the organization's procedures and practices.
Answer: C
NEW QUESTION 30
Which of the following processes or tools can be used as ongoing internal assessments of the performance of the internal audit activity?
1. Analyses of audit plan completion and cost recoveries.
2. Selective peer reviews of work papers by staff involved in the respective audits.
3. Self-assessment of the internal audit activity with on-site validation by a qualified independent reviewer.
4. Feedback from audit customers and stakeholders.
- A. 1, 2, and 4 only
- B. 1 only
- C. 1 and 2 only
- D. 3 and 4 only
Answer: A
NEW QUESTION 31
During an interview with a data-entry clerk in the human resources department, an internal auditor recognizes a potentially significant weakness with a database system used to track employee performance ratings. Which of the following actions should the auditor take after discovering the weakness?
- A. Immediately document the weakness and write a report to the data-entry clerk's superior.
- B. Question the data-entry clerk indirectly to help obtain more factual information about the weakness.
- C. Schedule a series of follow-up interviews with the data-entry clerk.
- D. Avoid either directly or indirectly confronting the data-entry clerk about the system weakness.
Answer: B
NEW QUESTION 32
Which of the following describes a key characteristic related to effective organizational communication?
- A. Comprehensive supervisory and verification procedures.
- B. A well-designed system of internal controls.
- C. A culture of integrity and transparency.
- D. Unique operating environments with varying complexity.
Answer: B
NEW QUESTION 33
According to IIA guidance, which of the following statements is true when an internal auditor performs consulting services that improve an organization's operations?
- A. The services may preclude assurance services from the consulting engagement.
- B. The services impose no responsibility to communicate information other than to the engagement client.
- C. The services must be aligned with those defined in the internal audit charter.
- D. The services must not be performed by the same internal auditor who performed assurance services, in order to maintain objectivity.
Answer: D
NEW QUESTION 34
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What is IIA-CIA-Part1 Exam
The revised CIA Part 1 exam is well aligned with the IIA’s International Specialized Practice Framework (IPPF) and also includes 6 areas that cover the fundamentals of internal accounting; autonomy and neutrality; efficacy and appropriate specialized treatment; quality assurance and renewal programs; governance, threat tracking and even control; and even the threat of fraud. The first part examines the understanding, skills and also the capabilities of the perspectives associated with the International Specifications for Household Accounting Specialized Technique, in particular the characteristic standards (1000, 1100, 1200 and 1300 series), as well as the criteria performance 2100.
Aspects of the IPPF are included such as the purpose of internal auditing and the basics of expert internal auditing technique. The program offers a higher rating with the IIA performance standards. The test covers the distinctions between obtaining and seeking advice from compromises. The review is about the appropriate disclosure of consistency with respect to non-conformance to specifications. The most important area is “Threat Governance, Management and Control”, which represents 35% of the audit. Part of the exam requires candidates to demonstrate a basic understanding of the concepts; another section requires candidates to demonstrate mastery of their knowledge, skills, and abilities.
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