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

The internal audit activity must possess or obtain the competencies needed to carry out their professional responsibilities, including providing relevant advice and recommendations.

The internal audit activity must have auditors on staff who collectively possess all of the competencies required to fulfill the internal audit plan,

All internal auditors on staff should possess the knowledge, skills, and competencies needed to perform any assurance engagement on the audit plan.

The internal audit activity must possess or obtain the competencies needed to carry out their professional responsibilities, including providing relevant advice and recommendations.

Internal auditors collectively are responsible for ensuring that the internal audit activity has the competencies required to fulfill the internal audit plan.

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?

Establish the internal audit activity's position within the organization in an audit charter.

Appoint the chief audit executive as a member of the board.

Adopt written policies and procedures for the internal audit activity, approved by the board.

Ensure the chief audit executive reports administratively to the audit committee.

Establish the internal audit activity's position within the organization in an audit charter.

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

Both assurance and consulting engagements require a final engagement report

For consulting engagements, internal auditors do not need to be alert to control issues.

Assurance and consulting services have similar objectives.

Internal auditors may not perform assurance and consulting roles at the same time.

Both assurance and consulting engagements require a final engagement report

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?

Internal auditors documented the scope and methodology of the data testing.

Internal auditors found no instances of double billing and concluded there were no significant risks in this area.

Internal auditors documented the scope and methodology of the data testing.

Internal auditors discussed with management how data is safeguarded.

Internal auditors received formal performance feedback from the engagement supervisor.

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?

Have the chief audit executive and management determine whether the auditor should continue with the audit engagement.

Proceed with the audit engagement, but do not include the relative's information.

Have the chief audit executive and management determine whether the auditor should continue with the audit engagement.

Disclose in the engagement final communication that the relative is a customer.

Immediately withdraw from the audit engagement.

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

Buyers promptly update the official vendor listing as new supplier sources become known.

Vendor invoice payment requests are accompanied by a purchase order and receiving report.

Purchase orders are typed by the purchasing department using prenumbered forms.

Buyers promptly update the official vendor listing as new supplier sources become known.

Department managers initiate purchase requests that must be approved by the plant superintendent.

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?

Refrain from indicating that the internal audit activity operates in conformance with the Standards until the chief audit executive confirms that the internal audit activity has addressed all areas of nonconformance and the audit committee has been notified.

Refrain from indicating that the internal audit activity operates in conformance with the Standards until another external assessment confirms that the significant areas of nonconformance have been addressed.

Indicate that the internal audit activity operates in partial conformance with the Standards t as the internal audit activity has a quality assurance and improvement program in place to address deficiencies and has met the requirement for conducting an external assessment.

Update and reissue previous audit reports, removing the assertion that the internal audit activity operates in conformance with the Standards, and distribute them to ail parties who received the original reports.

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

Policies that provide examples of inappropriate business relationships.

Policies that are distributed to all members of the internal audit activity and require a signed acknowledgment,

Policies that match internal auditors' performance with feedback from management of the area under review.

Policies that keep internal auditors in areas where they have vast audit expertise.

Policies that provide examples of inappropriate business relationships.

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

The organization establishes effective governing body oversight,

The organizational culture rewards critical and objective thinking.

The quality of work performed by the internal audit activity is periodically reviewed,

The organization establishes effective governing body oversight,

Audit assignments are rotated among internal audit staff

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?

The organization should conduct training sessions on fraud, which should be attended by senior management and staff.

The board should ask the internal audit activity to perform additional assurance engagements.

A comprehensive fraud risk assessment and management program should be carried out.

The organization should conduct training sessions on fraud, which should be attended by senior management and staff.

Anti-fraud and whistleblowing policies should be implemented and their importance should be clearly stated.

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

The internal audit activity has been in existence fewer than five years, but periodic selfassessments were conducted.

An internal audit activity has been in existence at least five years and has not completed an external assessment,

An internal auditor was assigned to an audit engagement but did not meet individual objectivity requirements.

The internal audit activity prepared an internal audit plan that was not risk-based.

The internal audit activity has been in existence fewer than five years, but periodic selfassessments were conducted.

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 theCAE should take regarding the request?

Decline the engagement request.

Assign the engagement to a more senior internal auditor.

Decline the engagement request.

Allow the internal auditors to acquire the needed skills while performing the engagement.

Supervise the assigned internal auditors throughout the engagement.

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

The engagement detected irregularities and noncompliance instances.

The engagement supervisor had no significant comments in the supervisory review.

The audit procedures were systematically planned, executed, and documented.

The engagement objectives were designed to assist the engagement client.

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?

Management's acceptance of inadequate controls for cybersecurity risk.

Discussions with senior management relating to a new revenue stream.

Mitigating controls implemented by the engagement supervisor

Project manager planned hours versus time spent for all prior year projects

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

Validate the results of management's self-assessment.

Maintain rigorous and comprehensive documentation.

Obtain authorizations and signatures.

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,

An annual declaration of commitment to

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

Select board members with necessary knowledge and skills.

Establish and measure performance objectives for the internal audit activity.

Select board members with necessary knowledge and skills.

Develop, approve, and execute the strategic plan of the organization.

Develop strategies to mitigate the risks to achieving the organization's objectives

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

Internal audit identifies key risk areas during assurance reviews and provides audit findings.

Internal audit assists with the prioritization of identified risks.

Internal audit participates in setting the risk appetite.

Internal audit takes part in the design of risk mitigation measures.

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?

Internal audit charter approved by the board.

Periodic reinforcement of the internal audit activity's code of ethics disclosure practices.

External assessments of the internal audit activity every five years.

Audit committee review of every engagement report at the conclusion of the audit.

Internal audit charter approved by the board.

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

Assessing soft controls are an effective method of assessing risk related to personnel.

Assessing soft controls, as opposed to hard controls, makes it easier to evaluate operating effectiveness.

Assessing soft controls can help internal auditors in undertaking root-cause analysis.

Assessing soft controls provides more objective information than assessing hard controls.

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?

The auditor should investigate whether there are any special arrangements regarding senior management travel.

The auditor should make a note of the issue for follow-up when employee travel expenses are audited.

The auditor should analyze trends and changes among the organization's suppliers over the past few years.

The auditor should investigate whether there are any special arrangements regarding senior management travel.

The auditor should analyze the list of destinations the department head visited to estimate typical costs.

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

The internal auditor selected a sample of purchase orders with amounts greater than S5.000, the threshold at which the organization requires a bidding process. The auditor obtained documentation of the bidding process for each purchase order in the sample.

The internal auditor began checking purchase requisitions for proper authorizations. He stopped when he discovered an instance of noncompfiance. and he concluded the controls were ineffective.

The internal auditor discovered an instance where management did not follow the standard bidding processes. The auditor assessed the validity of management's reasons for deviating from standard practice and the supporting documentation, and determined that the deviation was acceptable.

The internal auditor selected a sample of purchase orders with amounts greater than S5.000, the threshold at which the organization requires a bidding process. The auditor obtained documentation of the bidding process for each purchase order in the sample.

The internal auditor analyzed bidding documents provided by management. Management indicated that the documents were purchase orders issued to a sole-source vendor Based on the analysis and management's declaration, the internal auditor determined that the procurement process was effective.

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

The board seeks senior management's recommendation before approving the annual salary adjustment of the CAE.

The chief audit executive (CAE) reports functionally to the board and administratively to the chief financial officer.

The board seeks senior management's recommendation before approving the annual salary adjustment of the CAE.

The CAE confirms to the board, at least once every five years, the organizational independence of the internal audit activity,

The CAE updates the internal audit charter and presents it to the board for approval periodically, not on a specific timeline

Which of the following could increase risks to the organization's control environment?

Incentive-based compensation structures.

Strong board of directors oversight.

Incentive-based compensation structures.

Lower than average employee turnover.

Implementation of a fraud hotline.

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?

Engage in written communications with the board and present relevant issues in writing

Ensure all subsequent audit reports include a disclaimer as to the lack of access to the board,

Focus on operational audit work and disregard lack of direct access to the members of the board.

Initiate changes to the internal audit charter to report to senior management for the time being,

Engage in written communications with the board and present relevant issues in writing

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?

The self-assessment results were validated by a qualified external review team three years prior.

Internal audit activity policies and engagement records provide relevant, sufficient, and competent evidence that the statement is correct.

The audit committee has reviewed the annual self-assessment results and approved the use of the clause.

The self-assessment results were validated by a qualified external review team three years prior.

The internal audit charter, approved by the audit committee, requires conformance with the Standards

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

Restrict the time to submit tender bids.

Have a bidding committee open the tender bids.

Restrict the time to submit tender bids.

Keep minutes of pre-bid meetings.

Allow the higher tenders to rebid.

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?

Immediately notify management of the area under review and the other internal auditors involved in the engagement.

Discuss the situation with the engagement supervisor to determine whether fraud investigation experts are required to investigate the matter properly.

Fully document in the workpapers the evidence that has been discovered and recommend appropriate controls to address the fraud.

Provide the evidence that was discovered to local law enforcement for possible prosecution of the suspected fraud.

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

The organization's code of conduct.

The organization's competition.

The organization's code of ethics.

IIA IIA-CIA-Part1 Practice Test 1 - Free Online Exam Prep & Questions

Question 1 / 40

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

Review the organization's ethical value structure and reporting procedures.

Review what the organization considers to be ethical behavior, such as the employee code of conduct.

Review employee survey responses and follow up on those that suggest weaknesses in the ethical climate.

Review the organization's records to ensure all employees have signed statements that they will follow ethical practices.

Comment (0)

IIA IIA-CIA-Part1 Practice Test 1

Question

IIA IIA-CIA-Part1 Practice Tests

Practice Tests