An internal auditor is reviewing employee travel expenses from the previous six months for fraud.Which of the following tests would best detect instances where personal travel has been claimed?

Reconciling claims against business the requests that were approved by supervisors

Verifying whether claims have been properly authorized for payment

Verifying whether claims are properly supported by invoices or other documents.

Confirming that all claims are within the limits of the organization's travel policy.

Reconciling claims against business the requests that were approved by supervisors

Which of the following best describes a consulting engagement rather an assurance engagement?

An internal auditor is assigned to assess whether a proposed new initiative to convert a customer service system would be cost effective.

Bank internal auditors review an activity checklist to determine that the loan officer followed proper procedures.

The chief financial officer asks for the internal auditor's opinion regarding whether the new accounting pronouncements were properly and comprehensively adopted

An internal auditor is assigned to assess whether a proposed new initiative to convert a customer service system would be cost effective.

Senior management asks the internal audit activity to review compliance with customer data security regulations

An electric company hires several independent contractors to trim trees that are in close proximity to electricity lines. Which of the following would be the most effective control to mitigate the risk of contractors submitting fraudulent invoices regarding work completed?

Reconcile invoices and work acceptance sheets submitted by contractors

Require contractors to submit completed and signed work acceptance sheets

Utilize unmanned drones to conduct regular flights and photo shoots over the areas where work is performed

Reconcile invoices and work acceptance sheets submitted by contractors

Compare actual payments to contractors with budgeted values and analyze discrepancies

Which of the following is an example of an application control?

A two stage authentication process must be used to access customer information

Employees in the data center must always wear identification badges

Operating system updates must be installed within 48 hours.

A two stage authentication process must be used to access customer information

System backup and recovery testing must be done monthly

An internal auditor discovered that a former colleague from the internal audit activity now works in a junior position in a department scheduled for an upcoming audit. How can the auditor best ensure his objectivity for this engagement?

Proceed with the audit engagement in accordance with the internal audit manual

Recommend mat the chief audit executive outsource the upcoming audit engagement

Proceed with the audit engagement in accordance with the internal audit manual

Increase the amount of fieldwork in order to build greater credibility for audit conclusions

Declare a conflict of interest and hand over the engagement to another auditor

Which of the following items related to the quality assurance and improvement program should the chief audit executive report to the board?

Periodic management assessment results

Internal auditors' training evaluation results

Which of the following accurately describes the concept of inherent risk?

Combination of internal and external risk factors in their pure state assuming no controls are in place

Risk factors that exist when controls are in place and operating effectively

Internal risk factors assuming no controls are in place

Risk factors that cannot be mitigated because they are innate to a process

Combination of internal and external risk factors in their pure state assuming no controls are in place

To comply with the proficiency standard which of the following would the chief audit executive likely consider as the primary hiring criterion when choosing a new internal auditor?

The auditor's skills compared to those already possessed by other audit staff

The length and consistency of the auditor's work experience

The auditor's demonstrated problem-solving skills

The auditor's skills compared to those already possessed by other audit staff

The auditor's ability to be self motivated and a good team player

Which of the following actions by the internal audit activity requires disclosure to the board of nonconformance with the Standards?

The internal audit activity did not complete an external assessment within the last seven years

The internal audit activity performed an engagement with limited scope due to lack of knowledge

The internal audit activity failed to consider risk when conducting a review of a department

An internal auditor was assigned to an engagement m an area where she previously worked more than 10 years ago

An internal auditor is assessing the effectiveness of the organization's risk management practices She checks to see whether risk management is an intégrai part of decision making and whether risk management is transparent, responsive to change and addresses uncertainty. According to HA guidance on risk management frameworks, which of the following approaches is the auditor most likely using?

Key performance indicators approach.

An internal auditor believes that a weakness exists in the control environment relating to the delegation of authority and responsibility within the management structure. Which of the following actions should the internal auditor first consider in this matter?

Evaluate the potential impact on related controls

Recommend a control change and obtain management support

Evaluate the potential impact on related controls

Address the risk with senior management and the board

Develop and communicate the scope and evaluation criteria to be used by management

During an audit of a foreign subsidiary an internal audit team discovered that products were sold to a prohibited country due to sanctions. What is the best course of action for the internal audit team?

Consult with the legal department

Include the facts m the engagement communications

Inform me external auditors of the violation.

Report the violation to the government regulators

Consult with the legal department

Which of the following is the primary benefit of an effective professional development program for internal auditors?

An effective program may ensure that HA Standards requirements are adhered to during audit engagements

An effective program may enhance internal auditors' business acumen

An effective program may ensure that HA Standards requirements are adhered to during audit engagements

An effective program may ensure internal auditors' effectiveness in setting the organization's nsk management process

An effective program may clarify management's expectations of the auditors and their responsibilities to the organization

The board requested the chief audit executive (CAE) to provide consulting services for a new systems implementation project Which of the following statements is true regarding this scenario?

The CAE should avoid giving assurance on risk management processes in this particular situation

The CAE should avoid making decisions on risk responses within risk management processes.

The CAE may only provide consulting and not assurance services in risk management processes

The CAE may manage the project risks on behalf of management in this particular situation

The CAE should avoid giving assurance on risk management processes in this particular situation

According to IIA guidance, which of the following statements is true regarding the internal audit activity's quality assurance and improvement program (QAIP)?

The chief audit executive is responsible for assessing the suitability and competence of an external assessor.

Internal assessments rely solely on the review of completed audit engagements for demonstrated performance.

The chief audit executive is responsible for assessing the suitability and competence of an external assessor.

QAIP results must first be discussed with the board and approval obtained for distribution to senior management.

At the board's discretion, the frequency of external assessments can exceed the five-year guideline.

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

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

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.

What is the ultimate goal of establishing a robust risk management framework in an organization?

To facilitate the organization's achievement of business goals and objectives.

To support the organization's risk culture, involving employees at all levels.

To ensure that the organization attains a better financial position.

To assist the organization in identifying and mitigating key risks.

To facilitate the organization's achievement of business goals and objectives.

According to IIA 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.

According to IIA guidance, which of the following is the most accurate statement regarding the internal audit charter?

The charter must be approved by both senior management and the board.

The IIA's Code of Ethics must exist outside of the charter to maintain independence.

The charter must be approved by both senior management and the board.

The nature of consulting services does not need to be defined in the internal audit charter.

The charter provides a framework for performing a broad range of value-added audit services.

Internal audit is performing an engagement to determine whether there were indications of questionable bidding on a city s infrastructure project. As part of the engagement the internal audit activity became aware that certain firms tend to receive the contracts for large city projects. How should the internal audit activity proceed with the engagement and identify questionable bidding practices?

Obtain the city's contracting files to determine whether the city demonstrated efforts to solicit bids from various interested firms.

Obtain the city s vendor listing to determine whether there was an adequate number of firms available to solicit bids for protects

Obtain at of the city s financial records to identify any firms that received payments for contracted goods and services.

Obtain the city's contracting files to determine whether the city demonstrated efforts to solicit bids from various interested firms.

Obtain the city's official public meeting minutes to determine whether there were concerns about the contracting practices

In an environment where employees are frequently penalized for mistakes and the organizational culture is one of fear and blame which of the following is an internal auditor most likely to find?

Management regularly overrides key controls

Careless behavior becomes normal

Due to toe increased operational responsibility of the CEO. The chief audit executive (CAE) of an organization currently reports to the chief financial officer (CFO). What is the likely imped of such a situation?

There may be limitation m the scope of engagements that can be undertaken

The CPO could provide expert advice when auditing areas under his purview

The internal audit activity is adequately positioned when the CAE reports to a member of executive management

The expense of finance staff can be catted upon during an audit of finance-related areas

The organization s procurement manager asks the internal auditor to deliver training to the procurement team on the organization's third-party risk management process. Which of the following is the most appropriate response?

The internal auditor may accept the request only if she defines the scope to ensure conformance with the Code of Ethics

The internal auditor should reject the request it she previously worked in the procurement area to maintain objectivity

The internal auditor should reject the request if the internal audit team does not have the requisite expertise.

The internal auditor should accept the request and in fact she may assume some management responsibilities temporarily if the result is a relevant training benefit

The internal auditor may accept the request only if she defines the scope to ensure conformance with the Code of Ethics

How should the internal audit activity promote continuous improvement of organizational controls?

By facilitating control self-assessment sessions for managers responsible for business processes

By assessing implementation of controls m individual processes during audit engagements

By identifying the most significant business processes and designing effective controls for those processes

By implementing an internationally accepted internal control framework across the organization

By facilitating control self-assessment sessions for managers responsible for business processes

Which of the followIng would permit an internal audit activity to use the statement "conducted m conformance with the International Standards for the Professional Practice of Internal Auditing m audit reports?

The result of a quality assurance and improvement program confirm there are no material issues.

Engagement workpapers are retained by the internet audit activity according to the retention and deletion policy.

The internal audit activity receives positive feedback from the managers of the areas that were under review.

internal auditors demonstrate proficiency by maintaining professional internal audit certifications

A newly hired chief audit executive is reviewing available documentation to provide evidence of conformance with the standard for continuing professional development. Which of the following documents is the most reliable source for this purpose?

Self-assessments against an internally developed audit benchmark

The organization's training policy.

A list of auditors who requested to attend the next audit conference.

Self-assessments against an internally developed audit benchmark

An internal auditor wants to compare her organization's governance processes to those of a wellknown governance model. Which of the following approaches would the auditor take for this purpose?

Benchmark the governance processes using a capability maturity modal

Perform a gap analysis to assess me differences between the approaches

Assess the governance processes using computerized modeling techniques

identify any differences between the processes using a variance analysis

Benchmark the governance processes using a capability maturity modal

An internal auditor has completed an assurance engagement. Which of the following is most likely true regarding the engagement?

During audit planning the auditor determined that the engagement scope would include a review of the security and privacy of payroll records

During audit planning the auditor provided the client with the scope of the engagement for their agreement

The results of tie engagement were included m a written report mat was issued to the cleint who requested me engagement

During audit planning the auditor determined that the engagement scope would include a review of the security and privacy of payroll records

The client requested the review of a new payroll system in order to improve the security of fie system

Which of the following best demonstrates the application of due professional care?

An audit lead establishes internal audit manuals to guide the internal audit activity on now to undertake audit engagements.

An engagement supervisor requests that the employment of a process owner be terminated due to a significant control failure.

An audit lead establishes internal audit manuals to guide the internal audit activity on now to undertake audit engagements.

An audit manager provides a guarantee to senior management that internal controls relating to an audited process operate effectively.

An organization's internal audit activity operates under a direct reporting structure to tie audit committee of the board

An internal auditor is assessing how the organization processes financial transactions and whether written policies and procedures are followed. The auditor requested to meet with certain employees to understand their related roles and responsibilities. However the employees refuse to meet with the auditor claiming they are too busy. Which of the following responses would best demonstrate the auditor's conflict-resolution skills?

The auditor considers the employees to be unresponsive and proceeds to document the actions and concerns as a scope limitation that can affect the engagement

The auditor considers other options to determine whether the employees are processing financial transactions as required by the organization

The auditor meets with senior management of the organization to discuss the employees' behavior and possible resolutions that would satisfy all parties

The auditor meets with the department supervisor and staff to discuss the employees' actions in order to obtain an understands and potential resolution

During a procurement process audit the internal audit activity undertakes a fraud risk assessment and considers a range of possible fraud scenarios within the process. Which of the following scenarios constitutes a pressure to commit fraud?

One of the employees was found to have an obsession with expensive jewelry

An employee believes his poor compensation package justifies engaging in unethical behavior.

The head of the department is the only signatory to purchase orders issued to third party contractors.

Some employees strongly believe monetary gifts from vendors is a means of saving for life after employment.

One of the employees was found to have an obsession with expensive jewelry

During a quality assessment of the internal audit activity an auditor is assessing whether the independence of the internal audit activity is at risk of being compromised. According to IIA guidance, which of the following would provide the best source of evidence for such an assessment?

The internal audit charter as endorsed by the organization's governing body

An organizational chart showing the reporting line of the chief audit executive to the CEO

The internal audit charter as endorsed by the organization's governing body

A review of the audit opinions issued from a sample of recent audit engagements

An assessment of the scope of the audit work performed by the internal au<M activity

IIA IIA-CIA-Part1 Practice Test 14 - Free Online Exam Questions 521-560

Which of the following would best assist the internal audit activity in assessing whether an organization's responses to risk are aligned with its risk appetite?

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IIA IIA-CIA-Part1 Practice Test 14

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