Which of the following can be used to minimize employees' resentment of controls?

Developing general constricting controls rather than detailed ones

Making sure employees are exempt from participating in control creation

Implementing controls without lengthy s of their purpose

Developing general constricting controls rather than detailed ones

Not using controls to achieve goals

Which of the following is a typical characteristic of an organization's risk management framework*?

Risk is assessed on both an inherent and a residual basis

Risk tolerance may or may not align with risk appetite depending on whether the assessment is quantitative or qualitative

Risk is assessed on both an inherent and a residual basis

The framework addresses four organizational objective categories strategic, historical, operational, and investment

External risks and internal opportunities are omitted from the risk assessment scope

Which of the following best demonstrates conformance with IIA standards related to continuing professional development?

Seeking guidance regarding internal audit best practices from The IIA

Retaining evidence of training in the form of continuing education credits

Seeking guidance regarding internal audit best practices from The IIA

Retaining supervisory reviews conducted on the basis of the development plan

Giving consideration to certain areas of specialization as part of development planning

Which of the following specifications in an internal audit charter is the most important factor in the internal audit activity's independence?

Description of internal audit activity's reporting structure

Description of internal audit activity's responsibilities

Definition of internal auditing

Statement of internal audit activity's authonty

Description of internal audit activity's reporting structure

In which of the following scenarios is the internal auditor in conformance with The IIA's Code of Ethics and the Standards?

The auditor testifies in front of a jury about an organization's fraudulent financial practices after receiving a subpoena

Management has agreed to remedy a significant control deficiency, so the auditor excludes the deficiency from the engagement report

The chief audit executive declines an assurance engagement in IT because the internal audit activity is not proficient in IT

The auditor communicates an audit opinion on fraud risk during an audit engagement's preliminary fraud risk assessment

According to IIA guidance, which of the following actions by the chief audit executive (CAE) best demonstrates the organizational independence of the internal audit activity?

The CAE provides the board with an annual budget for approval

The CAE seeks senior management approval of the internal audit charter

The CAE obtains senior management's approval to hire staff

The CAE reports significant issues to the organization's CEO

The CAE provides the board with an annual budget for approval

An accounts payable clerk has recently transferred Into the internal audit activity and has been assigned to an engagement related to accounts payable processes for which he was previously responsible Which of the following is the best action for the new internal auditor to take?

If it is a consulting engagement accept the assignment because direct knowledge of the existing accounts payable processes will provide depth and add more value

If it is an assurance engagement accept the assignment because direct knowledge of the existing accounts payable processes will provide depth and add more value

If it is a consulting engagement decline the assignment and ask to be reassigned, because in a consulting engagement the auditor must not assess operations for areas in which they were previously responsible

If it is a consulting engagement accept the assignment because direct knowledge of the existing accounts payable processes will provide depth and add more value

If it is an assurance engagement accept the assignment becausethe chief audit executive had knowledge of the internal auditor's previous role when this engagement was assigned

According to IIA guidance, which of the following statements is true regarding internal auditors' knowledge, skills and other competencies?

The CAE must refuse a consulting engagement if the internal audit activity lacks the knowledge, skills, or other competencies needed to perform all or part of the engagement

The chief audit executive (CAE) must obtain competent advice and assistance if the internal audit activity lacks the knowledge, skills, or other competencies needed to complete the audit engagement

Internal auditors must have sufficient knowledge to evaluate the risk of fraud and the manner in which it is managed by the organization and should have the expertise of a fraud investigator

Internal auditors need to have basic knowledge of key IT risks and controls and available technology-based audit techniques in order to perform their assigned work

The CAE must refuse a consulting engagement if the internal audit activity lacks the knowledge, skills, or other competencies needed to perform all or part of the engagement

Which of the following describes a primary responsibility for the internal audit activity in helping management maintain effective controls?

Promoting continuous evaluation

Promoting continuous monitoring

Promoting continuous improvement

Which of the following best demonstrates conformance with the Standards regarding the internal audit activity's purpose authority, and responsibility?

Discussion and formal presentation of the internal audit charter to the board of directors

Certification by external auditors on the purpose, authority and responsibility of the internal audit activity

Approval of senior management that the internal audit activity is functioning as originally designed

Self-assessment of the internal audit activity completed by the chief audit executive

Which of the following threatens internal audit objectivity'?

Internal auditors are prevented from accessing information necessary to undertake their audit engagements

Internal auditors are expected by senior management to identify a minimum of five major control weaknesses in each area audited

Internal auditors are prevented from accessing information necessary to undertake their audit engagements

The chief audit executive reports directly to the chief financial officer who previously led the internal audit activity

The CEO requests the internal audit activity develop a charter that clearly delineates its purpose and responsibilities within the organization

The internal audit activity is undergoing a self-assessment as part of its quality assurance and improvement program Which of the following observations must be addressed in order for the internal audit activity to achieve conformance with the Standards?

The internal audit charter does not describe the authority of the internal audit activity

The internal audit charter does not identify which audit services are outsourced

The internal audit charter has not been reviewed by the legal department

The internal audit charter has not been approved by the board within the past year

The internal audit charter does not describe the authority of the internal audit activity

Which of the following is the best way for an internal auditor to demonstrate due professional care?

Conduct an audit to the same extent that another prudent auditor would under similar circumstances

Seek feedback from the engagement supervisor during the engagement

Execute internal audit work in such a manner as to provide absolute assurance of compliance

Request and receive client feedback surveys during the engagement

Which of the following is an example of an entity-level control pertaining to the finance area of an organization'?

Segregation of duties between posting and reviewing journal entnes

Key account reconciliation such as bank reconciliation

Segregation of duties between posting and reviewing journal entnes

A signing authority matrix for spending approvals

The establishment of a finance and audit committee

Which of the following disclosures must the chief audit executive (CAE) include when communicating the results of the quality assurance and improvement program to senior management and the board?

independence and objectivity impairments of the CAE

Authority and responsibility of the internal audit activity

Hours and sources of continuing professional education

Scope and frequency of both the internal and external assessments

independence and objectivity impairments of the CAE

Which of the following statements is true regarding the quality assurance and improvement program (QAIP)?

The qualifications of the assessors must be communicated to the board

Reporting on the QAIP to the board should occur at least once every five years

The responsibility for the selection of an external assessor rests with the board

The qualifications of the assessors must be communicated to the board

The reporting of outcomes of the QAIP can be delegated to senior audit staff

Which of the following best describes why a chief audit executive might obtain the services of a fraud specialist to assist in a major fraud investigation'?

Fraud specialists are better able to properly apply due professional care

Fraud specialists are better at using computer-assisted audit techniques

Fraud specialists are better equipped to act as an expert witness in court

Fraud specialists are better able to properly apply due professional care

Fraud specialists are better at using crime scene investigation techniques

Which of the following actions should an organization take to detect an emerging risk of potential fraud?

Establish an anonymous platform for reporting suspected unethical behaviors

Adopt reward and recognition programs that promote good behaviors

Undertake background checks for new employees as part of the hiring process

Establish an anonymous platform for reporting suspected unethical behaviors

Institute periodic educational training on expected ethical behaviors

The chief audit executive (CAE) of a large organization has been asked by the board to assume responsibility for risk management and compliance operations, both of which are distinct departments within the organization and are subject to periodic audits by the internal audit activity In regards to future audits of these functions which of the following approaches would be most appropriate?

Audits of risk management and compliance functions should be overseen by a competent external assurance provider

Audits of risk management and compliance functions should be overseen by a senior audit manager within the internal audit activity other than the CAE

Audits of risk management and compliance functions should be conducted by internal auditors under the supervision of management from both functions

Audits of risk management and compliance functions should be earned out by a team of the most experienced auditors overseen by the CAE

The management team of an agricultural organization has prioritized corporate social responsibility (CSR) initiatives. Which of the following would be considered a CSR activity'?

Organizing organization volunteers to provide periodic plantation skill sharing to farmers

Offering a one-off donation to an environmental charity for its expansion efforts

Organizing organization volunteers to provide periodic plantation skill sharing to farmers

Providing special year-end monetary bonuses to the organization's employees at all levels

Arranging a free-of-charge picnic for all of the organization's employees and their family members

According to IIA guidance, which of the following best demonstrates how the chief audit executive may ensure that due professional care is applied?

Establish policies and procedures concerning the engagement process

Develop a strategy for recruiting assigning, and training staff

Outsource complex engagements to an external service provider

Base the auditor evaluation process on the number of observations

Upon completion of an external quality assessment, which of the following would the chief audit executive be required to report to the board?

The detailed evaluation results of the external assessment

The total time spent to accomplish the external assessment

The detailed evaluation results of the external assessment

The competency and independence of the external assessment team

The timetable and schedule of the next external assessment

An auditor for a large wholesaler is evaluating the controls over the approval and oversight of credit sales. Which of the following procedures would be a control weakness?

The sales department is responsible for determining the credit ratings of customers

The credit department is responsible for approving shipments to all customers

The finance committee of the board of directors periodically reviews credit standards

Customers who fail to meet credit requirements must pay cash for shipments upon delivery

The sales department is responsible for determining the credit ratings of customers

Which of the following statements is true regarding organizational culture and an audit of the control environment?

If there are unresolved scope restrictions, the CAE should consider whether to pursue the audit and note the scope restrictions in the audit report

For multinational organizations it is important to ensure that the organizational culture is consistent at all locations

Because the chief audit executive (CAE) is part of the organizational culture, external auditors should be engaged to evaluate the control environment

If there are unresolved scope restrictions, the CAE should consider whether to pursue the audit and note the scope restrictions in the audit report

Because it will create a conflict of interest relating to the control environment, senior management should not be consulted during the audit

Regarding assurance and consulting services provided by the internal audit activity which of the following statements is correct?

Both assurance services and consulting services can be focused on controls or performance or both

The nature and scope of a consulting engagement are determined by the internal audit activity based on its risk assessment

The nature and scope of an assurance engagement are subject to agreement with management of the area under review

Both assurance services and consulting services can be focused on controls or performance or both

The assurance engagement process ends with reporting

Which of the following statements represents the most appropriate correlation between an organization's risk maturity and the internal audit activity's consulting role in risk management processes?

There is typically no correlation between an organization's risk maturity and the extent to which the internal audit activity's consulting role in risk management processes

When an organization has a high level of risk maturity the internal audit activity is less likely to provide consulting services related to risk management

When an organization has a low level of risk maturity, the internal audit activity is less likely to provide consulting services related to risk management

When an organization has a high level of risk maturity the internal audit activity is more likely to provide consulting services related to risk management

There is typically no correlation between an organization's risk maturity and the extent to which the internal audit activity's consulting role in risk management processes

Which of the following is a legitimate role for the internal audit activity in the organization's risk management process'?

Championing the establishment of a nsk management framework

Creating and implementing new risk management processes

Maintaining sole responsibility for risk management within the organization

Setting the risk appetite of the organization

Which of the following is a legitimate requirement for an internal audit activity's quality assurance and improvement program (QAIP)?

The results of the QAIP should be communicated to shareholders annually

Quality assessments should be performed by individuals with sufficient knowledge of the internal audit practices

External quality assessments should be conducted every seven years

All quality assessments should be either conducted or validated by an independent assessment team

The results of the QAIP should be communicated to shareholders annually

Which of the following would be considered advanced expertise which most internal auditors are not expected to possess'?

The ability to detect and investigate fraud

The ability to evaluate fraud risk

The ability to detect and investigate fraud

The ability to assess risk management strategies

The ability to create test databases

According to IIA guidance, which of the following statements is true regarding mentoring programs designed to assist internal auditors with their professional development?

An auditor s supervisor is best positioned to serve as the auditor's mentor

The mentor must have a higher position in the organization than the mentee

An auditor s supervisor is best positioned to serve as the auditor's mentor

Meetings between a mentor and a mentee should be formal and well documented

Auditors at the same level may be assigned different mentors and some auditors may have no mentor

An external assessment of an organization's internal audit activity was last completed four years ago Which of the following options would be acceptable this year if the internal audit activity is to fulfill the requirements of the Standards?

The internal audit activity conducts a self-assessment that is validated by a qualified and experienced internal auditor and then schedules a qualified, independent external assessor

The board nominates an independent individual from senior management in the organization to conduct an assessment of the internal audit activity

An external auditor conducts an audit of the organization which includes information about the internal audit activity

The chief audit executive schedules a self-assessment and the board approves the results

IIA IIA-CIA-Part1 Practice Test 5 - Free Online Exam Prep & Questions

Question 1 / 40

Which of the following is most accurate concerning corporate social responsibility?

A moral agent in an organization makes decisions that are based on the rules and regulations of the organization as they apply to human resources decisions

The utilitarian approaching deciding on ethical dilemmas is concerned with choosing the simplest solution that will apply to the most people

Ethics are not defined by laws but they are not a matter of free choice ethics are based on standards of conduct derived from shared principles and values

The individualism approach to ethical decision making is focused on implementing a customized long-term outcome that is most beneficial for the entire organization

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IIA IIA-CIA-Part1 Practice Test 5

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