Which of the following is a preventive control the organization could implement to mitigate fraudulent activity in the accounts payable department?

Segregating duties between employees in the department.

Delivering fraud awareness training to employees in the department.

Segregating duties between employees in the department.

Requesting the internal audit activity perform an independent evaluation of fraud risk in the department.

Requiring accounts payable employees to sign a code of conduct awareness confirmation.

During an audit of company expenses, the internal auditor performed a test using data analytics and identified a violation of the company's expenses policy. The auditor who discovered the issue considered it a potential fraudulent transaction and informed the chief financial officer (CFO). The CFO dismissed the concern because he did not understand the data analytics test that was performed and the transaction was of a low value. Given this situation, which skills or competencies should this internal auditor seek to improve?

Soft skills such as communication and negotiation.

Skills in evaluating the risk of fraud.

Knowledge of key IT risks and controls

Soft skills such as communication and negotiation.

Knowledge and understanding of the company's expenses policy

Which of the following scenarios depicts an appropriate role for the internal audit activity to take regarding an organization's risk management process?

Internal audit assesses whether the organization's risk management processes are effective.

Internal audit designs and implements the organization's controls to help manage risk.

Internal audit sets the organization's risk tolerance and promotes awareness throughout the organization.

Internal audit assesses whether the organization's risk management processes are effective.

Internal audit is responsible for safeguarding the organization's assets and preventing loss from occurring.

At what point in time can an organization conclude that the established organizational governance framework was correctly implemented?

When the internal auditor conducts observations and fieldwork.

When management completes the risk assessment.

When the internal auditor evaluation shows its soundness.

When the organization's goals and objectives are met.

Which of the following concepts is emphasized in the Mission of Internal Audit?

Enhancement of organizational value.

Support of good governance and controls.

Enhancement of organizational value.

Protection of tangible and intangible assets.

Provision of professional advisory and assurance services.

The organization's chief audit executive (CAE) is planning an immediate assurance engagement following several product recalls. However, the internal audit staff does not have the required Knowledge and experience to adequately assess all the relevant processes and procedures.According to 11A guidance, which of the following actions should the CAE take under these circumstances?

Obtain assistance for the audit team from other internal assurance providers who possess the requisite expertise in the area.

Use the current available resources to conduct the review and exclude those procedures that can't currently be performed.

Implement an accelerated training plan to provide the audit staff with the necessary skills and knowledge to conduct the engagement.

Encourage management to accept the assessed risk until the internal audit activity is able to adequately review the area.

Obtain assistance for the audit team from other internal assurance providers who possess the requisite expertise in the area.

In which of the following situations would the organizational independence of an internal audit activity be impaired?

Scope limitations are imposed on internal audits.

The chief audit executive reports administratively to the CEO.

Scope limitations are imposed on internal audits.

The internal audit activity provides assurance services for an activity for which the engagement supervisor had responsibility within the previous year.

The compensation committee of the board approves the remuneration of the chief audit executive.

According to MA guidance, which of the following best demonstrates that the chief audit executive is properly reporting the results of the quality assurance and improvement program lo senior management and the board?

Providing a written conformance statement to both senior management and the board.

Giving copies of both external and internal assessments to the board.

Keeping files of reports of ongoing external assessment monitoring

Retaining copies of board meeting minutes showing that discussions of assessments took place.

Which of the following best describes a purpose for the internal audit charter?

The internal audit charter authorizes access to records, personnel, and physical properties relevant to the performance of audit engagements.

The internal audit charter authorizes the internal audit activity's reporting structure and clearly defines the roles of each internal auditor.

The internal audit charter defines the roles and responsibilities of the chief audit executive, board of directors, and senior management.

The internal audit charter authorizes access to records, personnel, and physical properties relevant to the performance of audit engagements.

The internal audit charter defines the criteria by which the internal audit activity's performance will be evaluated

Which of the following statements is true regarding the internal audit activity's quality assurance and improvement program (QAIP)?

It Is permissible to share the results of the QAIP with the organization's external auditors.

Internal assessments must be performed by the chief audit executive.

An internal assessment must be performed at least once every five years.

It Is permissible to share the results of the QAIP with the organization's external auditors.

Results of ongoing monitoring must be validated annually by an independent external assessor.

An organization is implementing a new cybersecurity policy and has established a committee to ensure stakeholder alignment across the organization's infrastructure, network, and security teams.The head of the committee has asked the chief audit executive if the internal audit activity could play a role in these efforts. According to HA guidance, which of the following is the most appropriate response?

The internal audit activity may assist the committee and consult with management on the organization's responses and control activities.

It is not appropriate for the internal audit activity to play a role because its independence must be protected.

The internal audit activity should not participate because there are no IT auditors on staff.

The internal audit activity is knowledgeable about risk and therefore should prioritize the organization's responses and control activities for the committee.

The internal audit activity may assist the committee and consult with management on the organization's responses and control activities.

Which of the following statements best describes how the internal audit activity obtains reasonable assurance that significant risks in the organization are identified and assessed?

The internal auditors interview staff at various levels and determine whether the organization's objectives, significant risks, and risk appetite are articulated sufficiently.

The internal auditors review the organization's strategic plan, business plan, and policies, and have discussions with the board and senior management.

The internal auditors evaluate the adequacy and timeliness of management's reporting of risk management results.

The internal auditors interview staff at various levels and determine whether the organization's objectives, significant risks, and risk appetite are articulated sufficiently.

The internal auditors review recently completed risk assessments and related reports issued by senior management, external auditors, and other sources.

Which of the following organizations has reached the most mature level of corporate social responsibility?

An organization that requires its decision makers to act with equity, fairness, and respect for the rights of individuals.

An organization that is able to provide goods and services society needs and thus maximizes profit to its owners.

An organization that ensures compliance to legal frameworks of the countries in which it operates and sells its products.

An organization that is willing to make contributions not mandated by law or economics and expects no payback.

An organization that requires its decision makers to act with equity, fairness, and respect for the rights of individuals.

An internal auditor assessed that the risk of steel theft at a plant is high. In response, the plant's management introduced a number of controls, including fences around the facility, a metal detector at the entrance, and monthly steel inventory counts. If the controls operate as intended, which of the following outcomes would the internal auditor hope to see?

The residual risk will be reduced to an acceptable level.

The inherent risk will be mitigated to a level lower than the residual risk.

The inherent risk will be reduced to an acceptable level.

The residual risk will be reduced to an acceptable level.

The residual risk will be eliminated

According to MA guidance, which of the following is true with regard to the internal audit charter?

It describes the expectations for communicating the results of a quality assurance and Improvement program.

It specifies the minimum resources needed for assurance engagements.

It requires final approval from senior management.

It defines the internal audit activity's authority and responsibilities.

It describes the expectations for communicating the results of a quality assurance and Improvement program.

According to MA guidance, which of the following is an appropriate role for the internal audit activity?

Coaching management in responding to risks.

Implementing risk responses on management's behalf.

Imposing risk management processes.

Management of an area under review is aggressive, upset, and questioning the knowledge and experience of the organization's internal auditors, as the audit results highlight critical findings. The relationship between the internal audit activity and management has continued to degenerate. as previous audit reports also showed a large number of issues. What would be the best strategy for working through the current audit results while also attempting to repair the relationship with management?

Take an assertive approach and be persistent in attempting to convince the director.

Take an accommodating approach and change the overall rating of the audit report.

Take a compromising approach by modifying the tone of the report, while maintaining the critical findings.

Take an assertive approach and be persistent in attempting to convince the director.

Take an assisting approach and offer to assist with the implementation of action plans.

During a review of the procurement function, an internal auditor identified an existing control for adding new vendors into the vendor contract system. Which of the following would best help the auditor determine the adequacy of the control's design?

Flowchart of the vendor addition process.

Independent confirmations sent to vendors.

Analysis of the control's costs and benefits.

Interview with management of the procurement function.

An internal auditor is assessing fraud risks and creating a fraud risk matrix for a particular branch location. Which of the following is most likely to be included in the matrix?

Risks and relevant mitigating controls.

Business processes and relevant fraud risks.

Fraud scenarios and relevant risks.

Opportunity, rationalization, and pressure to commit fraud.

A whistle blower notified internal audit of a conflict of interest between an organization's employee and a major supplier. Which of the following steps should be undertaken first?

Attain an understanding of the employee's role, responsibilities, and relationship with the supplier.

Interview the employee identified by the whistleblower.

Attain an understanding of the employee's role, responsibilities, and relationship with the supplier.

Notify senior management, the board, and the external auditor about the alleged fraud

Review all the orders issued to the supplier to investigate potential fraud.

Which of the following actions would best help the internal audit activity promote continuous improvement in control effectiveness within the organization?

Providing training on controls and ongoing self-monitoring processes.

Determining whether management measures and monitors the costs and benefits of controls.

Providing training on controls and ongoing self-monitoring processes.

Developing flowcharts to obtain information about control design adequacy.

Identifying objectives and the risks involved in achieving them.

In its five years of existence, an internal audit activity conducted a single internal assessment of its quality assurance and improvement program (QAIP). The results of that assessment showed that the internal audit activity did not conform with the Standards. Prior to this, an external assessment of the internal audit activity's QAIP was conducted, which reported that the internal audit activity was in conformance with the Standards. Considering the two assessments, what would be the internal audit activity's current state of conformance with the Standards?

Nonconformance with the Standards

Conformance with the Standards.

Nonconformance with the Standards

Unable to determine conformance with the Standards.

Partial conformance with the Standards

It is important for the chief audit executive to consider the level of competence of the internal audit staff because their competence influences which of the following?

Proficiency needed to carry out engagements.

The cost-benefit relationship of planned audits.

Proficiency needed to carry out engagements.

Achievement of the objectives of internal control.

Quantity of the audits performed.

According to MA guidance, which of the following statements is true regarding an effective governance process?

It stipulates that risk needs to be considered when making strategic decisions.

It encourages strict segregation of the risk management and internal control processes.

It relies on effective risk management when establishing the organization's risk appetite.

It relies on the board to devise ways to communicate the effectiveness of internal controls.

As a result of a high-profile processing error, respective business unit managers are implementing new controls. The internal audit team was asked for their advice regarding the controls. The objective of this consulting engagement would be determined by which of the following?

The business unit manager and the engagement supervisor.

The organization's board of directors.

The business unit manager and the engagement supervisor.

The compliance manager and the business unit manager.

During an audit engagement of a large retail store, internal auditors noted significant discrepancies between available inventory and sales and suspect an abuse of cash register refunds and voids.Which of the following would be the most effective preventative control to reduce these losses?

Require that a manager use a reserved register code to approve voids or refunds.

Ensure that returned merchandise is restocked to shelves or sent to the manufacturer by an independent employee.

Call a sample of customers who returned merchandise to test the legitimacy of the returns and check refund amounts.

Require that a manager use a reserved register code to approve voids or refunds.

Analyze voids and refunds by employee, credit card number, and amount for unusual numbers, amounts, or patterns.

An internal auditor is finalizing an audit report on the effectiveness of the organization's overall system of internal control. Several audit tests were performed, and the only issue identified was that the CEO frequently asks employees to make exceptions or bypass the organization's standard written policies and procedures. Which of the following conclusions is most appropriate for the auditor to report?

The auditor should indicate that the system of internal control is not effective.

The auditor should indicate that the system of internal control is generally effective, except for the minor issue identified.

The auditor should indicate that the system of internal control is effective.

The auditor cannot express a conclusive opinion in the audit report.

In addition to her internal audit activity responsibilities, the chief audit executive has been asked to oversee the organization's insurance function. Which of the following responses is most appropriate?

Revise the internal audit charter to include oversight of the insurance function, ensuring that all of her responsibilities are properly documented.

Welcome the additional responsibility, as it represents an opportunity to gain more information for future audits.

Revise the internal audit charter to include oversight of the insurance function, ensuring that all of her responsibilities are properly documented.

Report the request to the board and recommend alternate processes to obtain assurance related to insurance activities.

Promptly remove the organization's insurance function from the audit universe.

IIA IIA-CIA-Part1 Practice Test 11 - Free Online Exam Prep & Questions

The chief audit executive (CAE) is drafting the annual internal audit plan and seeks input from senior management and the external auditor prior to submitting it for approval to the board. According to MA guidance, which of the following statements is true regarding this scenario?

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IIA IIA-CIA-Part1 Practice Test 11

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