What is the primary reason a chief audit executive should dedicate time and resources to support continuing professional development of internal audit staff?

To ensure that internal audit staff maintains high overall job satisfaction.

To ensure that internal audit staff acquired continuing professional education credits timely.

To ensure that top risks are mitigated to an acceptance level.

To ensure that internal audit staff have he competency to address high-priority risks.

Whch ol the following would show appropriate disclosure of nonconformance with the Standards?

The CAE discussed with the board an issue regarding the internal activity performing an IT engagement without proper skills and knowledge.

The chief audit executive (CAE) documented in the personal file a critical conflict of interest involving an internal audit on a upcoming contracting engagement.

The CAE discussed with the board an issue regarding the internal activity performing an IT engagement without proper skills and knowledge.

The CAE met with the peer review team to discuss an internal auditor's failure to meet the annual requirements for continuing professional education.

The CAE revealed to revealed to operational manager that he failed to appropriately consider risks while he was developing the audit plan.

Which of the following statements best represents the duo professional care that is required of internal auditor's?

Internal auditors should perform assurance procedures to ensure that all significant risks are identified.

Internal auditor should not perform consulting engagements for operations for which they had previous responsibilities.

Internal auditors should consider the cost of assurance in relation to the potential benefits.

Internal auditors should device internal audit programs to confirm that the results are accurate.

TrÂ» chiet audit executive (CAE) of large organization is preparing job descriptions to hire five new general internal audit staff, two new IT auditors and a senior auditer how is the CAE likely to describe IT requirements for me general internal audit statt positions?

The candidate must be able to understand IT-elated risk and general controls

The candidate must be able to apply data analytics tolls methodologies

The candidate must be able to evaluate IT governance and cybersecurity frameworks.

The candidate must be able to understand IT-elated risk and general controls

The candidate must be able to execute web servers, applications, and databases testing procedures.

The accounting department asked the chief audit executive (CAE) to perform a review of suspicious transactions The CAE was an accounting manager for the organization six months ago How should she respond to the request?

Accept, it is a consulting engagement with agreed-upon scope and services to be provided by me internal audit activity.

Decline, if it is consulting engagement because she recently worked in the organization s accounting department

Accept, 11 is an assurance engagement, as she has been out of the department long enough to not impair objectivity.

Inform the accounting department mat me engagement can take place m the future once she has been removed from accounting for a longer period of time.

Accept, it is a consulting engagement with agreed-upon scope and services to be provided by me internal audit activity.

What is an appropriate first step in an internal auditor's fraud risk assessment to evaluate how the organization manages such risk?

Identify potential fraud scenarios

Develop preventive and detective controls

Identify potential fraud scenarios

Assess the impact and likelihood of fraud risks

Which of the following would most likely be classified as a consulting engagement?

Facilitating a self assessment of the organizations business risk and control identification

Examining the internal control effectiveness of the marketing department

Assessing the adequacy of the IT system's business process design

Facilitating a self assessment of the organizations business risk and control identification

Reviewing the application controls in the human resources system

Which of the following is an indicator that the organization s risk management process is effective?

The organization s risk management practices are assessed as mature.

The organization s risk appetite mission, and objectives are dearly outlined.

The organization s risk management practices are assessed as mature.

The organization has adopted risk management frameworks and global models.

The organization s significant risks are identified and adequately assessed

Which of the following would best describe a control implemented to detect cash register disbursement fraud in a large retail store?

Periodically count the cash in the register and compare it to the expected amount

Separate the duties of processing and authorizing refunds on merchandise

Post signs in the register area prompting customers to ask for and examine their sales receipts

Periodically count the cash in the register and compare it to the expected amount

Use cash registers with internal tapes that are tamper proof and that require a manager to process voids or refunds

Which of the following qualifies as an acceptable consulting service provided by the internal audit activity?

Lead a risk self assessment session for laboratory managers to help identify inherent risks and provide recommendations on how to evaluate the risks

Develop training and system rollout plans in response to the results of the change readiness assessment of a new sales distribution model

Lead a risk self assessment session for laboratory managers to help identify inherent risks and provide recommendations on how to evaluate the risks

Audit a third party cloud service provider to review the effectiveness of governance and management controls in providing secure services to its customers

Conduct a post-implementation assessment of the enterprise resource planning system to determine whether project objectives were met and to identify opportunities to maximize potential benefits

The chief audit executive (CAE) decided to conduct a self-assessment with independent validation.Which of the following is the most likely reason the CAE selected this course of action?

The staff auditors have the necessary knowledge and experience to conduct the review

The audit committee requested the self assessment for quality assurance purposes

The staff auditors have the necessary knowledge and experience to conduct the review

The internal audit activity is relatively small in size and is due for an external assessment

The internal audit activity is due for a self-assessment which is specifically required at least once every five years

Prior to commencing a financial compliance engagement, the engagement supervisor reads the business plan for the finance department and meets informally with the director to learn more about any key issues. Which of the following competencies is the engagement supervisor demonstrating?

The ability to communicate effectively

The ability to understand the needs of stakeholders

An internal auditor notes that inventory counts are conducted on Mondays only and that all documentation is on paper as there are no computers in the underground warehouses. Also she notices that the person responsible for receiving the goods is the same one who distributes materials and spare parts Finally, she sees that spare parts are written off and taken by the heads of mining units to different underground locations to wait for their turn to be installed. Which of the described findings requires more consideration from a fraud risk perspective?

Spare parts are written off before their actual usage and installation

The job responsibilities of the warehouse employee compromise segregation of duties

Spare parts are written off before their actual usage and installation

Warehouse management is conducted on paper and requires further investigation

The inventory counts take place on specific days of the week for no apparent reason

A new internal audit activity is considering the adoption of a risk and control framework. Which of the following is the most appropriate consideration during this process?

The framework should always be tailored to the organization

The framework should not be developed by the internal audit activity

The framework should apply to individual projects rather than the organization as a whole

The framework should always be tailored to the organization

The framework should require fewer resources to implement

Which of the following is true regarding the stakeholder theory of corporate social responsibility?

An organization has a fiduciary duty to put shareholders' needs first

Customers' needs are the primary responsibility of the organization

Competitors are considered stakeholders of the organization

Employees are the organization's best assets and primary responsibility

An internal audit team was assigned to review the organization's information security protocol After fieldwork was completed an internal auditor identified an error in the review of security access The error could affect the overall results of the engagement Which of the following is the most appropriate course of action for the internal auditor?

Inform the engagement supervisor of the error and allow the supervisor to determine the appropriate action to take

Proceed with addressing the error and report any corrections to the engagement supervisor during the scheduled exit meeting

Issue the audit report to senior management on schedule but include a disclaimer about the error

Proceed with the scheduled closing of the engagement without consideration of the identified error

Inform the engagement supervisor of the error and allow the supervisor to determine the appropriate action to take

Which of the following scenarios provides the most concerning red flag or indicator of possible fraud?

During the past 18 months three chief financial officers have left the organization after having been promoted to the position

An employee receives a bonus for perfect attendance

During the past 18 months three chief financial officers have left the organization after having been promoted to the position

The organization does not perform any due diligence research on third party service providers

Three competitors are highly profitable but a fourth equal in size is approaching bankruptcy limits

Which of the following describes the most appropriate match between a potential temporary guest auditor candidate and an upcoming audit assignment?

An accounting manager who discovered and reported fraud committed by a payables clerk to conduct a performance audit of accounts payable

A purchasing manager with two years of prior audit experience in public practice to lead a contracts management audit

A communications officer who worked in the marketing department during the last six months to conduct a customer loyalty program audit

A manager of social responsibility who has a nursing background to participate m a health and safety audit for the corporate office and plant facilities

An accounting manager who discovered and reported fraud committed by a payables clerk to conduct a performance audit of accounts payable

Which of the following statements is true regarding reporting results of the quality assurance and improvement program to senior management and the board?

If supported by assessment results, reporting provides assurance that internal auditors demonstrate conformance with the Code of Ethics

Internal assessments must be reported to the board at least every five years

If supported by assessment results, reporting provides assurance that internal auditors demonstrate conformance with the Code of Ethics

Following the reporting the board must give the internal audit activity five years to correct any deviations

A report, including the results of both internal and external assessments must be provided to the board annually

A senior executive at a government-owned organization received an invitation to attend a public exhibition where he can learn about new trucks relevant to the organization's business. As a special perk, the executive is offered an opportunity to drive a luxury vehicle manufactured by one of the exhibiting companies. Prior to the event, the executive asked for the chief audit executive s (CAE's) advice. What should the CAE recommend as the most appropriate course of action for the executive?

Attend the event, but decline the offer to use the luxury vehicle

Decline the invitation to the exhibition.

Ask the board to decide on the issue.

Select a lower-level employee to enjoy the luxury vehicle instead

At a construction company, supervisors are entitled to bonus payments if there are no safety rule violations on their teams. There are several channels available for workers to report accidents and violations, and all reported violations are investigated. Bonus payment calculations are approved by managers and the head of safety. Which of the controls best addresses the risk that supervisors will conceal accidents on their teams in order to receive the bonus?

The variety of reporting channels

The investigation of all reported violations

The authorization process for bonus calculations

The variety of reporting channels

How do assurance services and consulting services differ?

Other employees in an organization can provide consulting services but only an internal audit activity can provide assurance services

There is less variety of consulting services that an internal audit activity might provide compared to assurance services

Assurance services are limited to financial events or actions, and consulting services are not limited in this way

Consulting services do not have to be included in the internal audit charter

Other employees in an organization can provide consulting services but only an internal audit activity can provide assurance services

Which of the following fraud prevention measures is most likely to trigger undesired adverse behavior if improperly designed?

Disclosure of outside business activities

Which of the following would an internal auditor expect to find within an organization's internal control framework?

A statement of the organization s values, reflecting its attitude toward risk

A compliance risk mitigation strategy to be implemented by the compliance function.

A statement of the organization s values, reflecting its attitude toward risk

Details of how each group from the Three Lines Model fits into the risk management strategy.

The risk appetite related to establishing and approving process

What is the primary purpose of The IIA's Code of Ethics?

Establish principles and expectations governing behavior of individuals and organizations in the conduct of internal auditing

Communicate specific activities appropriate to the performance of internal auditing

Promote ethical culture within corporations and other business organizations

Establish mandatory standards of competence for the practice of internal auditing

Establish principles and expectations governing behavior of individuals and organizations in the conduct of internal auditing

Which of the following is an indicator that an organization's risk management processes are effective?

Organization wide mechanisms exist to enable the identification and assessment of all significant risks.

Departmental objectives are managed by department heads and are independent of the organization's mission.

Organization wide mechanisms exist to enable the identification and assessment of all significant risks.

Department heads have the autonomy to determine risk responses that fall outside of the organizations risk appetite

Relevant risk information is captured and communicated primarily between management and the board

Which of the following would be addressed in the internal audit charter?

Functional and administrative reporting lines for the chief audit executive

Expertise requirements for internal auditors

Functional and administrative reporting lines for the chief audit executive

Audit engagements to be completed in the next fiscal year

Budget requirements for each engagement

Which of the following should the internal audit activity establish to ensure auditors develop the appropriate skills for conducting audits?

An internal audit plan that links engagements to strategic objectives

An audit charter that includes the internal audit activity mission and vision

A policy encouraging audit staff to earn certifications

A quality assurance and improvement program to address audit risk areas

An internal audit plan that links engagements to strategic objectives

Which of the following should be part of the internal audit activity's duties?

Assisting management in developing processes and controls to manage risks and issues.

Actively reporting to the governing body.

Providing risk management frameworks.

Assisting management in developing processes and controls to manage risks and issues.

Identifying and mitigating significant risks to the organization.

Which of the following statements is true regarding how the scope of a consulting engagement should be established?

The engagement client should be able to determine the scope to be applied to the engagement

The internal auditor should establish a scope that does not impair her objectivity

Any attempts by the engagement client to limit the scope should be considered a scope limitation

The scope should include reviewing the effectiveness of the internal control environment

According to The IIA's Code of Ethics, which of the following best describes the principle of integrity?

Auditors shall observe the law and make disclosures expected by the law and the profession

Auditors shall disclose all material facts known to them that if not disclosed may distort the reporting of activities under review

Auditors shall engage only in those services for which they have the necessary knowledge skills and experience

Auditors shall be prudent in the use and protection of information acquired in the course of their duties

Which of the following best describes the approach the internal audit activity should take to assess and make appropriate recommendations to improve the organization?

To determine how an organization provides oversight of its isk management and control activities internal auditors should review board meeting minutes and the board policy manual

To evaluate an organization s governance processes for making strategic and operational decisions eternal auditors should review the organization s policies and processes related to staff compensation

To determine how an organization provides oversight of its isk management and control activities internal auditors should review board meeting minutes and the board policy manual

To assess how an organization promotes ethics and values both internally and among its external business partners, internal auditors should review the organization' s related objectives programs and activities

To evaluate how an organization ensures effective performance management and accountability internal auditors should review previously conducted risk assessments

IIA IIA-CIA-Part1 Practice Test 13 - Free Online Exam Prep & Questions

Upon completion of an external assessment as part of the quality assurance and improvement program (QAIP), the chief audit executive (CAE) reported the results to senior management and the board The CAE included the following elements in the report

- Qualifications and independence of me external assessment team

- Conclusions of assessors

- Corrective action plans

How should the CAE improve the aforementioned approach to reporting the resets of QAIP?

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IIA IIA-CIA-Part1 Practice Test 13

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