Which of the following would a chief audit executive most likely use to identify a need for improvement in a staff internal auditor's business acumen?

An internal audit client survey.

A peer review of the internal audit activity.

Which of the following statements is the most appropriate example of the internal audit activity exercising due professional care during an audit of the payroll department?

Internal auditors ensure that the work program is appropriately designed in order to identify all of the risks surrounding the payroll process.

Internal auditors determine whether the policies, procedures, and practices of the payroll department are operating in accordance with relevant laws.

Internal auditors verify whether the board of directors has implemented effective internal controls over the processes used by the payroll department.

Internal auditors ask the organization's risk manager to determine whether the degree of work planned is sufficient to determine whether payroll payments were complete and accurate.

Which of the following tests would most likely help discover a fictitious invoice?

Compare vendor addresses to employee addresses.

Match cancelled checks to invoices.

Search for duplicate payment amounts.

Check employee bank records against invoice amounts.

Once an organization's risks are identified, what would be the next step to ensure resources are properly allocated to manage those risks?

Risk responses must be selected.

The risk universe must be established.

Risk responses must be aligned.

Which of the following is true about corporate social responsibility (CSR)?

Internal auditors can provide assurance on reported sustainability results.

Social and environmental considerations are required parts of an organization's decision making

The Global Reporting Initiative provides standards on required disclosures of CSR.

CSR activities are overseen and managed by operational management.

Internal auditors can provide assurance on reported sustainability results.

Which of the following statements demonstrates that internal auditors are in conformance with the standard of due professional care?

Internal auditors have demonstrated the skills needed to carry out the audit engagement.

Internal auditors have shown they have the freedom to carry out their responsibilities.

Internal auditors have demonstrated the skills needed to carry out the audit engagement.

Internal auditors have strictly followed a formal audit process in conducting their work.

Internal auditors have demonstrated an unbiased mental attitude.

Which should the internal auditor first consider when assessing fraud risks during an engagement?

Review any related prior fraud investigations.

Compare the organizations fraud strategies with the industry's strategies.

Review any related prior fraud investigations.

Investigate any related fraud allegations.

Communicate any suspicious fraud activities to management.

An external assessment was performed as part of the organization's quality assurance and improvement program. Which of the following conclusions confirms that the internal audit activity is in conformance with the Standards'?

All audit workpapers are reviewed and signed by the engagement supervisor before the audit report is issued.

The chief audit executive is well qualified and has responsibilities over operational areas that the internal audit activity assesses.

Periodic self-assessments are assigned to entry-level internal audit staff to support their continuing professional development.

All audit workpapers are reviewed and signed by the engagement supervisor before the audit report is issued.

Employees who rotate into the internal audit activity from other areas of the organization are assigned to audit areas where they previously worked, to take advantage of their operational expertise and experience.

A chief audit executive (CAE) recruited a few new internal auditors to reduce the resource gaps identified in this year's internal audit plan. One of the new recruits has several years of experience with the organization. Ten months ago. she served as a senior supervisor in the finance department. However, for the past 10 months, she has been helping the organization with implementing a new IT system. What approach should the CAE take for the upcoming financial statement controls audit?

Assign the new auditor to assist with developing the audit program, but ensure that the audit program is executed by other audit staff.

Assign the new auditor to assist with conducting the fieldwork. but ensure that her work is reviewed by the CAE.

Assign the new auditor to assist with developing the audit program, but ensure that the audit program is executed by other audit staff.

Ensure that the new auditor's previous manager, and other close former coworkers, are excused during the audit.

Ensure that the new auditor is responsible only for the supervisory review, but not the execution of the audit field work.

According to IIA guidance, which policy, established by the chief audit executive, would most likely ensure internal audits are conducted with due professional care?

Internal audit staff should be informed regularly of changes to policies and procedures.

The initial review of workpapers should be conducted after the final engagement report is issued.

Independent internal assessments of the internal audit activity should be performed by entry-level staff as part of on-the-job training.

Internal audit staff should be informed regularly of changes to policies and procedures.

Training documents should be destroyed at the end of the year to create space for the next year's training documents.

Which of the following are some of the requirements of the quality assurance and improvement program (QAIP)?

he QAIP should include both internal assessments performed by staff and external assessments performed by independent, objective individuals

The OAIP should be conducted at least once every three years, and must be performed by an external assessor.

The OAIP should be conducted on an ongoing basis, and can be completed as a self-assessment,

he QAIP should include both internal assessments performed by staff and external assessments performed by independent, objective individuals

The OAIP should be performed with scoping limitations established by the board.

According to The IIA's Competency Framework, which competency is considered the mandatory minimum for internal auditors to possess when performing internal audit engagements?

To evaluate the potential for fraud.

To recognize red flags that indicate fraud.

To recommend controls to prevent fraud.

To apply forensic auditing techniques to detect fraud.

To evaluate the potential for fraud.

An experienced internal auditor is planning an assurance engagement of the organization's sales activities. During process walkthroughs and interviews, many sales representatives expressed concerns about management's escalating demands to meet the organization's sales goals. According to the MA guidance, which of the following is the best application of due professional care in planning the engagement?

Consider the significance of the risks related to the complaints and develop appropriate assurance procedures in work programs.

Disregard the complaints because the information isn't reliable and isn't sufficient to support engagement conclusions and results.

Consider the significance of the risks related to the complaints and develop appropriate assurance procedures in work programs.

Disregard the complaints because using them would violate the confidentiality principle.

Discuss management's needs and expectations related to including the complaints in the audit scope.

Which of the following practices is generally most effective to protect internal audit objectivity?

Prohibiting auditors from accepting gifts from audit clients or potential clients.

Ensuring regular documentation of auditor skills and experience in the workpapers.

Basing performance evaluations heavily on customer satisfaction surveys.

Prohibiting auditors from accepting gifts from audit clients or potential clients.

Ensuring that auditors have a balance of both operational and internal audit responsibilities.

Which of the following is true regarding internal audit role's in The IIA's Three Lines Model?

Internal audit should be aligned with first- and second-line functions through effective communication, cooperation, and collaboration.

As internal control is part of risk management, the internal audit role in risk management implies reduced emphasis on internal control.

Internal audit can blur the distinction between the second and the third lines as long as value is added.

Internal audit cannot rely on other assurance providers when opining on the effectiveness of risk management.

Internal audit should be aligned with first- and second-line functions through effective communication, cooperation, and collaboration.

An organization is conducting a fraud risk assessment as part ol its risk management program. Which of the following steps is the organization most likely to perform first?

Identify relevant fraud risk factors.

Identify potential fraud schemes.

Identify existing controls for preventing and detecting fraud.

Identify red flags by conducting data analysis.

According to the Standards, in today's technology and business environments, how much computer and information systems-related knowledge and skills must an internal auditor have to be effective in fulfilling his job responsibilities?

Auditors must understand their organization's IT governance, risk, and control processes.

Auditors must have an IT specialty in at least one of their organization's key information technology systems.

Auditors must be proficient in data analysis and computer assisted audit techniques for their organization.

Auditors must understand their organization's integrated test facilities and generalized audit software.

Auditors must understand their organization's IT governance, risk, and control processes.

According to the Standards, in today's technology and business environments, how much computer and information systems-related knowledge and skills must an internal auditor have to be effective in fulfilling his job responsibilities?

Auditors must understand their organization's IT governance, risk, and control processes.

Auditors must have an IT specialty in at least one of their organization's key information technology systems.

Auditors must be proficient in data analysis and computer assisted audit techniques for their organization.

Auditors must understand their organization's integrated test facilities and generalized audit software.

Auditors must understand their organization's IT governance, risk, and control processes.

During an assurance engagement, an internal auditor reviews a tender inviting vendors to submit bids to supply financial services software to the organization. She suspects that the tender was tailored for the bidder who eventually won the contract. What should the auditor do next?

Analyze technical terms and conditions of the tender.

Review payments made for the financial services software.

Confront a procurement specialist with the suspicion.

Submit an anonymous tip to the whistleblower hotline.

Analyze technical terms and conditions of the tender.

Which of the following best describes the role of internal control frameworks?

They provide guidance related to internal control design and implementation to assist with the evaluation and benchmarking of business practices.

They outline specific internal controls for an organization to implement to ensure business objectives will be achieved.

They provide guidance related to internal control design and implementation to assist with the evaluation and benchmarking of business practices.

They serve as a list of appropriate internal controls for auditors to ensure an organization is using best practices.

They serve as a template for identifying standardized best practices in effective risk management across industries and countries.

According to the IIA Code of Ethics, which of the following best describes the conduct of an internal auditor who demonstrates the principle of competency?

The auditor does not perform services in a particular area when he lacks skills in that area.

The auditor is prudent in the use and protection of information acquired in the course of his work.

The auditor does not accept anything that may impair or be presumed to impair his professional judgment.

The auditor does not perform services in a particular area when he lacks skills in that area.

The auditor performs work with honesty, diligence, and responsibility.

Which of the following situations is most likely to threaten the independence of the internal audit activity?

The annual budget for the internal audit activity is approved by the chief financial officer.

The chief audit executive reports functionally to the board and administratively to the CEO.

The annual budget for the internal audit activity is approved by the chief financial officer.

The internal audit activity is completely outsourced to an external service provider.

The internal audit manager provides consulting services to the procurement department, where she worked during the prior year.

According to IIA guidance, which of the following best demonstrates due professional care?

Assessing the cost of assurance in relation to the potential benefits.

Staffing audit engagements with internal auditors who possess professional designations.

Relying on prior audit work to save planning time and costs.

Performing assurance procedures to guarantee all significant risks are identified.

Assessing the cost of assurance in relation to the potential benefits.

How can an Internal audit activity contribute to Its organization's risk assessment process?

Assist in reviewing how key risks are reported

Determine the risk appetite based on an independent review

Determine necessary risk responses based on an assessment

Take accountability for risk management

Which of the following would be Included in ongoing monitoring of the performance of the internal audit activity?

Acquiring feedback from audit clients and other stakeholders.

Having senior auditors conducting an annual self-assessment

Benchmarking against best practices in internal auditing.

Performing an external assessment once every five years.

An Internal auditor noted that many amended purchase orders were automatically created for discrepancies between the value of the original purchase order and the final invoice.Further examination revealed that most differences resulted from rounding errors bulk weights or minor tariff adjustments for shipping. Which of the followtng IS the most reasonable conclusion for the Internal auditor regarding this control?

The control is both effective and efficient

The control IS effective but inefficient

The control IS ineffective but efficient.

The control IS both Ineffective and Inefficient

The control is both effective and efficient

The audit committee chair requested that the chief audit executive include in his annual report to the audit committee information related to how the internal audit activity meets its requirement for due professional care. Which of the following statements would be appropriate to include in the report?

Due professional care was exercised during the conduct of each engagement so that all risks were identified and ranked, and assurance procedures were designed to address each risk accordingly.

During engagements, the identified risks were appropriately addressed with necessary audit procedures to ensure that any risk that threatened the company's objectives was adequately mitigated, regardless of cost.

Due professional care was exercised during the conduct of each engagement so that all risks were identified and ranked, and assurance procedures were designed to address each risk accordingly.

To meet its mission of enhancing and protecting organizational value and to demonstrate appropriate support for management, the internal audit activity planned to accept all proposed management consulting engagements.

During engagements, internal auditors considered various data analysis techniques and relevant technology-based audit procedures, and used these techniques and procedures when applicable.

According to IIA guidance, who is ultimately responsible for the enhancement of the internal auditor's knowledge, skills, and other competencies?

The officer in charge of human resources.

Which of the following statements describes the activities performed by the internal audit activity to fulfill the Mission of Internal Audit?

Conduct reviews of internal risk and controls.

Conduct fraud investigations on suspicious deals.

Perform risk management functions in selected areas.

Establish the risk appetite of the organization.

Which of the following preventive controls would be most effective for organizations facing business disruptions and respective financial losses?

Develop a business continuity plan for contingent situations.

Insure the organization against financial losses.

Rely on third-party cloud solution providers for the organization's systems.

Hedge company assets via purchasing derivatives.

During an audit of the procurement department, the internal auditor interviewed the department manager to ask questions about the purchasing process. There have been a number of employee complaints, tips, and reports regarding the purchasing process via the organization's whistleblower hotline. Which of the following phrases from the interviewee is most likely to raise concerns regarding potential control deficiencies or fraud risks?

'I cannot take more than a few days of vacation, as nobody else can perform my duties.'

'The process works the way it is mandated to work.'

'I cannot take more than a few days of vacation, as nobody else can perform my duties.'

'There are policies or procedures for this process.'

A chief audit executive (CAE) is currently employed at a commercial bank where she was previously the chief compliance officer over three years ago. The current chief compliance officer abruptly resigned prior to the start of a mandatory anti-money laundering compliance audit. The board is contemplating a number of alternatives regarding the vacant post, bearing in mind that the bank has been struggling financially and is looking to contain costs. Which of the following alternatives, if taken by the board, would be most appropriate to satisfy the bank's objectives as well as preserve the internal audit activity's independence?

Recruit a new chief compliance officer to fill the vacancy and have the CAE direct the new individual in the compliance officer role.

Extend the CAE's responsibility to cover the compliance function and postpone the scheduled compliance audit to next year.

Recruit a new chief compliance officer to fill the vacancy and have the CAE direct the new individual in the compliance officer role.

Assign responsibility for the compliance function to the CAE and have an external auditor perform the scheduled compliance audit.

Appoint the current CAE to head of the compliance function. No further action is required since the CAE was employed in the compliance function more than a year ago.

Which of the following statements is true regarding risk management frameworks?

The organization should ensure that its risk management framework is designed specifically to meet the needs of its operations.

The organization should ensure that it uses a universally-accepted risk management framework.

The organization should ensure that its risk management framework is designed specifically to meet the needs of its operations.

The organization should ensure that the board is responsible for implementing the risk management framework.

The organization should ensure that the risk management framework has been validated by the internal audit activity for implementation.

IIA IIA-CIA-Part1 Practice Test 18 - Free Online Exam Prep & Questions

An internal auditor failed to identify transactions between the parent organization and a subsidiary. What is the most likely reason for the failure?

Become a Premium Member for full access

Unlock Premium Member

IIA IIA-CIA-Part1 Practice Test 18

Question

IIA IIA-CIA-Part1 Practice Tests

Practice Tests