Which of the following constitutes an example of a control designed to prevent an undesired activity from happening?

Segregation of personnel duties.

Confirmation of sales by third parties.

Which of the following would the internal audit activity do first if fraud is suspected during an audit engagement?

Expand audit testing to determine whether fraud actually occurred.

Interview the employees who may be implicated in the fraud.

Advise management regarding the event and provide recommendations.

Expand audit testing to determine whether fraud actually occurred.

Determine the potential impact on the organization.

Which of the following is an example of computer forensic auditing?

Recovering deleted communications and emails.

Testing compliance with policies that define acceptable computer use.

Assessing controls over allocation of IT assets in a specific location.

Recovering deleted communications and emails.

Logging targeted cybersecurity events on the organization's network.

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

The auditor lacked an understanding of the organization.

The auditor misunderstood the audit objectives.

The auditor lacked professional skepticism.

The auditor's fieldwork was not properly supervised.

The auditor lacked an understanding of the organization.

Which of the following statements is true regarding external quality assessments?

An external quality assessment must be conducted at least once every five years by a qualified, independent assessor or assessment team.

They can be performed by self-assessment with independent external validation, but they must be performed every three years.

When a new chief audit executive (CAE) is appointed, an external quality assessment should be undertaken during the CAE's first year of office.

An external quality assessment must be conducted at least once every five years by a qualified, independent assessor or assessment team.

An external assessment by a qualified professional from outside of the organization can be performed in place of an internal assessment.

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 trip 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 trip requests that were approved by supervisors.

According to IIA guidance, which of the following statements is true of assurance services provided by the internal audit activity?

Internal auditors cannot assess an operation for which they were responsible within the previous year.

Management of the area under review must agree with the engagement objectives, scope, and techniques.

The engagement results will vary in form and content depending upon the needs and wishes of the engagement client.

The only parties involved in the engagement are the internal auditor and management of the area under review.

During a payroll audit, a staff internal auditor suspects that signatures on some of the documents being sampled for examination are not authentic. Which of the following actions should the auditor take before proceeding with the examination?

Review the suspicious documents with the chief audit executive and seek advice concerning further examination.

Suggest to the payroll manager that the suspicious documents should be sent to the organization's security department for forensic review.

Keep the suspicious documents in the workpaper file until the end of the engagement, and then discuss the suspicions with the payroll manager.

Discuss the suspicious documents with payroll staff to seek their views on the authenticity of the signatures.

Review the suspicious documents with the chief audit executive and seek advice concerning further examination.

Which of the following must be considered by the chief audit executive before writing the internal audit charter?

The manner in which the internal audit activity is viewed by the board.

Internal auditors' level of competencies and skills.

The manner in which the internal audit activity is viewed by the board.

Evaluation of staff certifications and continued development.

Effectiveness of the quality assurance and improvement program.

Which of the following activities would breach the principles of The IIA's Code of Ethics?

The internal auditor is using information from a recent engagement to assist with a friend's business.

The internal auditor is keeping personal notes from an engagement conducted on the organization's information system security for future use.

The internal auditor is performing an engagement of the purchasing department where he used to work five years ago.

The internal auditor is using information from a recent engagement to assist with a friend's business.

The internal auditor is discussing relevant information involving questionable vendors with a government regulatory agency.

Which of the following documents most directly describes the guidelines for and importance of the objectivity of internal auditors?

Internal audit quality assessments.

Which of the following statements is true regarding organizational independence of the internal audit activity (IAA)?

Independence is impaired when the scope of the IAA is subject to changes required by senior management.

Reporting to a higher level within the organization reduces the potential scope of engagements that can be undertaken by the IAA.

The benefit of the IAA's organizational independence is realized primarily via reduced costs for the external auditor.

Independence is impaired when the scope of the IAA is subject to changes required by senior management.

Inadequate organizational independence can result in the chief audit executive being able to fire staff without consulting the audit committee.

Which of the following would best preserve the organizational independence of the internal audit activity?

The CAE's internal audit plan is endorsed by the board.

The internal audit charter is approved by the chief audit executive (CAE).

The CAE reports functionally to the CEO.

The CAE's internal audit plan is endorsed by the board.

The chief financial officer determines the appointment of the CAE.

For a high-risk observation, which is the best approach to follow when management takes an aggressive, uncompromising position in opposition to the internal audit activity?

The internal audit activity should discuss with senior management, and if still not resolved, discuss with the board.

The parties should work together to develop a mutually beneficial solution.

The internal audit activity should share the observation with other business units to get their opinions.

The internal audit activity should discuss with senior management, and if still not resolved, discuss with the board.

The internal audit activity should accommodate management's position, since the relationship is more important than the fight.

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

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

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.

According to IIA guidance, which of the following statements regarding ethics is true?

Business ethics may vary within an organization with both domestic and foreign operations.

Business ethics are universal in nature and organizations across the world are expected to comply with similar standards.

A business ethics policy for an organization is established solely to direct the behavior and expectations of employees.

Business ethics of an organization must remain independent from those of suppliers, customers, and business partners.

According to IIA guidance, which of the following would be the most appropriate to help a new internal auditor understand the nature and positioning of the internal audit activity within his organization?

Examples of internal audit reports.

The internal audit policy and procedures manual.

The IIA's International Professional Practices Framework.

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.

Which of the following is most likely to result in the impairment of independence for the internal audit activity?

The CAE performs an audit of a functional area that is also under the CAE's oversight.

The chief audit executive (CAE) has a dual reporting relationship within the organization.

The CAE performs an audit of a functional area that is also under the CAE's oversight.

The CAE has unrestricted access to information throughout the organization and to the board.

The board is involved in decisions to hire or remove the CAE and in drafting and approving an internal audit charter.

Which of the following is the primary benefit of establishing a formal training program for the internal audit activity?

It is useful to maintain the skills and competencies of internal audit staff.

It is useful to reinforce the independence of the internal audit activity.

It is useful to guide internal auditors as they perform specific engagements.

It is useful to maintain the skills and competencies of internal audit staff.

It is useful to measure the effectiveness and maturity of the internal audit activity.

An internal audit activity is performing a governance engagement. Which of the following would provide the best evidence for an internal auditor when evaluating the organization's culture?

Ethics and integrity policy; structured interviews with employees; and established and communicated values, mission, and vision.

Personnel and customer surveys, actual reports, and due diligence results regarding third-party governance practices.

Details on mandatory reporting to third parties, disclosure committee charter and responsibilities, and the internal communication system.

Succession plans, development programs, and job descriptions with responsibilities and authorities.

Ethics and integrity policy; structured interviews with employees; and established and communicated values, mission, and vision.

Which of the following circumstances would most likely be considered a potential red flag for fraud by the internal audit activity?

The volume of nonroutine journal entries has steadily increased over time.

The monthly payroll reports are not vetted to ensure terminated employees have been removed from the payroll system.

The volume of nonroutine journal entries has steadily increased over time.

The database of approved suppliers has not been reviewed in the last year.

The recent employee survey indicates that some employees remain unaware of the organization's whistleblower hotline.

The level of authority for the internal audit activity is granted by which of the following?

The International Professional Practices Framework.

Which of the following actions does a competency assessment tool help the chief audit executive perform?

Assess the knowledge and skills of the internal audit activity to identify any gaps.

Record that the internal audit activity's completion of audit assignments has been met.

Hire qualified and skilled internal auditors for the organization's internal audit activity.

Postpone audits where the internal team does not have the necessary skills or knowledge.

Assess the knowledge and skills of the internal audit activity to identify any gaps.

Which of the following would most likely represent an objectivity impairment for an internal auditor?

Performing a compliance audit on a vendor prior to disclosing that the vendor's office manager is the auditor's brother.

Providing fraud awareness training and disseminating information regarding the organization's fraud hotline.

Performing consulting services after disclosing that the auditor had previous responsibilities in the area under review.

Performing an assurance engagement related to the cash receipts process three years after transferring to the internal audit activity from accounts receivable.

Performing a compliance audit on a vendor prior to disclosing that the vendor's office manager is the auditor's brother.

An organization is in the process of hiring a new chief audit executive (CAE). Which of the following can the potential candidates expect to be a part of the recruiting process or in place when the CAE is hired?

There are checks to determine the existence of any potential conflict of interest.

The CAE reports functionally to the highest level of management, the CEO.

The CAE's compensation depends on the performance of the organizational departments.

Hiring and termination of the CAE is dependent on the decision of senior executives.

A senior Internal auditor was hired Into a large Internal audit activity It was agreed upon hiring that the auditor would pursue professional development that would support her ability to take on the role of the head of Internal audit, Which of the following skills best supports this development goal?

Application of IIA mandatory and supplemental guidance.

Which of the following scenarios most likely indicates that the organization is not managing risks effectively?

Securities market oversight authorities fined the organization for not disclosing significant transactions with a related party.

A construction project is significantly delayed due to an unexpected global pandemic.

Senior management terminated contracts with certain solar panel manufacturers due to potential allegations of child labor usage.

A local community filed a lawsuit against a wind farm developer even though the developer complied with all legal requirements.

Which of the following actions by an organization's board would potentially impair the internal audit activity's independence?

Requiring that reports from the CAE are reviewed and approved first by senior management.

Approving the appointment and compensation package of the chief audit executive (CAE).

Requiring that reports from the CAE are reviewed and approved first by senior management.

Approving the internal audit activity's resources and audit plans annually.

Asking senior management and the CAE about the scope of the annual internal audit plan.

An internal auditor is assigned to an assurance engagement. The auditor's aunt has been working in management of the area under review for a considerable amount of time. Which of the following would best assist the internal auditor in this situation?

The conflict of interest policy.

The internal audit activity plans to audit a supplier quality management process within the supply chain function. In what way is this assurance engagement similar to a typical consulting engagement?

For both types of engagements, internal auditors must obtain requisite skillsets for the areas where their team lacks competencies.

For both types of engagements, internal auditors are solely responsible for deciding the goals and objectives.

For both types of engagements, internal auditors must obtain requisite skillsets for the areas where their team lacks competencies.

For both types of engagements, internal auditors should not be involved in the engagement if they previously managed the supply chain function.

For both types of engagements, internal auditors are prohibited from undertaking operational responsibilities.

Which of the following is a true statement regarding environmental, social, and governance (ESG) and corporate social responsibility (CSR)?

Sustainability disclosure is evolving around the world.

Having a CSR program also means decreased revenue and increased costs.

Organizations with ESG programs have lower performance due to the necessity to focus on sustainability as well.

Sustainability reporting focuses solely on the environmental and social performance of an organization's activities.

IIA IIA-CIA-Part1 Practice Test 19 - Free Online Exam Prep & Questions

Which of the following statements is true regarding a small internal audit activity with limited resources demonstrating due professional care?

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IIA IIA-CIA-Part1 Practice Test 19

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