Which of the following techniques should an internal auditor use in order to conduct an effective interview?

Use technical language to establish credibility with the employee being interviewed

Avoid straightforward questions to make the person being interviewed think before answering

Prepare the next question while the interviewee is responding to demonstrate preparedness

Appear confident but not arrogant during the interview to show professionalism

Which of the following is a consulting service the internal audit activity can perform with respect to the organization's risk management'?

Facilitating risk assessment workshops

Delivering assurance on the risk management system

Facilitating risk assessment workshops

Evaluating principal risk reporting

Deciding on the appropriate risk response

According to IIA guidance, which of the following actions best demonstrates that due professional care has been considered by the internal audit activity when conducting a review of an organization's assets?

Planning and executing fieldwork In a complete and timely manner to identify all significant risks

Determining whether any opportunity exists for senior executives to misappropriate property or funds

Planning and executing fieldwork In a complete and timely manner to identify all significant risks

Verifying whether the board of directors has implemented effective internal controls

Having senior management determine whether the degree of work planned is sufficient to meet engagement objectives

Which of the following are considered root causes of fraud?

Perceived need and weak internal controls

A newly appointed chief audit executive (CAE) is tasked with creating a new internal audit activity within the organization. Which of the following would the CAE need to include in the new internal audit charter?

The relevant regulations that will guide the internal audit activity's regulatory compliance assessments

The requirement to provide an annual cost analysis that justifies having an internal audit activity

The specific engagements that the internal audit activity will perform for the organization

The board s oversight role and responsibilities pertaining to the internal audit activity

The relevant regulations that will guide the internal audit activity's regulatory compliance assessments

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 the engagement were included in a written report that was issued to the client who requested the 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 the system

According to IIA guidance, which of the following statements is true regarding risk management in an organization?

The internal audit activity may use a risk management or control framework to assist in risk identification

The risk management function has the sole responsibility for identifying and managing risks in all departments

Risk management is a core responsibility of the internal audit activity

The internal audit activity should consider the organization's maturity, structure, and the competitive environment to establish the organization's risk appetite

The internal audit activity may use a risk management or control framework to assist in risk identification

Which of the following scenarios best illustrates due professional care?

While performing a payroll audit an auditor became skeptical about significant payments made to a manager. The auditor sought to determine whether these payments were reasonable through discussion with a manager in a different department in the organization

An internal auditor who previously worked in the payroll department within the last year was intentionally excluded by the chief audit executive from the audit team assigned to a payroll audit

While performing a payroll audit an auditor became skeptical about significant payments made to a manager. The auditor sought to determine whether these payments were reasonable through discussion with a manager in a different department in the organization

The head of the payroll department being audited is a business partner of the engagement supervisor During the audit the engagement supervisor sought to maintain his objectivity by not participating in fieldwork

An auditor assigned to a payroll audit was unable to reperform some complex payroll computations for a small number of employees The sum of these payments was below the materiality thresholds provided so the auditor did not perform further tests

Which of the following should catch the internal auditor's attention as a potential red flag for fraud?

One of the subsidiaries has more bank accounts than any other comparable subsidiary

The accounting unit keeps detailed records and preserves supporting documentation in excess of company requirements

One of the subsidiaries has more bank accounts than any other comparable subsidiary

The same external audit firm has been with the company for three years without rotation

The arithmetic median tenure of employees working at production facilities is 15 years

Six months after an employee was transferred to the internal audit activity his former operating manager requested that he return to assist a project team with the evaluation of a new pricing module for the organization's online ordering system According to IIA guidance which of the following statements is true?

The auditor may participate on the project, as the nature of the assignment is consulting

The auditor cannot be assigned to this project, as it has been fewer than 12 months since he was transferred from that department.

Another internal auditor should be appointed to the engagement to preserve the independence of the internal audit activity

The auditor cannot participate in the assignment, as providing an opinion would impair his objectivity

The auditor may participate on the project, as the nature of the assignment is consulting

An internal auditor has suspicions that some fictitious vendors have been created in the organization's computer system. Which of the following would be the best technique to detect this fraud?

Run checks to find matches between vendor and employee addresses

Review for duplicate invoice numbers, duplicate dates, and duplicate amounts

Run checks to find matches between vendor and employee addresses

Check for recurring requests for refunds where invoices are paid twice

Review for unexplained increases in inventory

According to IIA guidance, which of the following would the internal audit activity examine in order to evaluate the organization's governance process for strategic and operational decisions'?

The organization's mission and value statements, code of conduct, and whistleblowing policy

The risk assessment process including interviews with senior management.

The organization's mission and value statements, code of conduct, and whistleblowing policy

Board meeting minutes the board policy manual, and past audit reports

Staff compensation objective setting and the performance evaluation policy and process

What should be the first step for a newly hired chief audit executive to build and maintain the proficiency of the internal audit activity'?

Complete a periodic skills assessment of the internal audit activity

Incorporate the basic criteria of internal audit competency into job descriptions

Complete a periodic skills assessment of the internal audit activity

Develop a competency or skill assessment tool.

Perform benchmarking with competitors to learn what other firms are doing related to this topic

Due to the 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 impact of such a situation?

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

The CFO 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 expertise of finance staff can be called upon during an audit of finance-related areas

According to IIA guidance, which of the following best describes the chief audit executive s responsibility for confirming to the board the organizational independence of the internal audit activity'?

The CAE must do this at least annually

The CAE must do this at least once every five years

The CAE must do this upon completion of each external quality assessment

The CAE should do this periodically in conjunction with a review of the internal audit charter

Which of the following is a greater consideration for internal auditors when they are performing a consulting engagement than when they are performing an assurance engagement'?

The needs and expectations of the engagement client

The relative complexity of the engagement

The cost of the engagement relative to its benefits

The extent of work needed to achieve the engagement's objective

The needs and expectations of the engagement client

An internal audit activity maintains a quality assurance and improvement program that includes annual self-assessments The internal audit activity includes in each engagement report a clause that the engagement is conducted in conformance with the International Standards for the Professional Practice of Internal Auditing ( Standards) Which of the following justifies inclusion of this clause in the reports?

The self-assessment results were validated by a qualified external review team three years prior

Internal audit activity policies and engagement records provide relevant, sufficient, and competent evidence that the statement is correct

The audit committee has reviewed the annual self-assessment results and approved the use of the clause

The self-assessment results were validated by a qualified external review team three years prior

The internal audit charter, approved by the audit committee requires conformance with the Standards

Which of the following is an example of corruption?

Demanding payment from a vendor for decisions made in the vendor's favor

Recognizing revenue up front rather than over a contract's life to inflate revenue for the current period

Requesting reimbursement for overstated travel and entertainment expense amount

Misstating realized foreign currency transaction gains or losses

Demanding payment from a vendor for decisions made in the vendor's favor

The chief audit executive of a large national retailer is reviewing the purpose and objectives of the organization's internal audit activity Which of the following objectives is best aligned with The IIA's Mission of Internal Audit?

To operate within the budget established by the board of directors

To implement a quality assurance and improvement program

To assess the effectiveness of internal controls over organizational assets

To ensure internal auditors possess the competencies needed to perform their responsibilities

To operate within the budget established by the board of directors

Which of the following describes the internal audit activity's most appropriate role in an organization's risk management process?

Reporting to the board on management's assessment of current risks

Establishing a risk management policy and framework for the organization

Assigning responsibility for identifying and managing significant risks

Developing key controls to mitigate risks across the organization

During an assurance engagement internal auditors interview operational management to gather and evaluate information. Which approach is most important for internal auditors to be able to listen effectively to interviewees in the given situation?

Express interest by asking follow-up questions

Make an audio recording of the interview

Interrupt with questions during unclear statements

Express interest by asking follow-up questions

Which of the following situations undermines the independence of the internal audit activity?

The internal audit activity is responsible for the company's risk management function and its head manager reports to the chief audit executive

A senior member of the internal audit activity once worked in the corporate finance department

The organization's CEO reviews the internal audit activity's annual budget per the organization's policies and procedures

The internal audit activity often uses management's risk profile to build its own nsk profile for annual planning

According to IIA guidance, which of the following statements is true regarding the internal audit activity's responsibilities in providing consulting services?

Adding value to an organization requires the internal audit activity to initiate a consulting engagement

The chief audit executive is responsible for deciding the priority of consulting services in the internal audit plan

The scope of consulting services is determined primarily by the internal auditor with input from management of the area under review

The board defines the internal audit activity's responsibilities over consulting activities

Adding value to an organization requires the internal audit activity to initiate a consulting engagement

An engagement supervisor noticed that a newly hired internal auditor struggles with large data samples because he appears reluctant to apply available spreadsheet statistical functions and tends to perform testing of transactions manually In which of the following areas does the internal auditor most likely need training?

International Professional Practices Framework

Which of the following is a role internal auditors should undertake related to risk management?

Evaluate the reporting of key risks

Implement risk responses on management's behalf

Impose risk management processes

Recently an organization's internal audit activity discovered ghost employees who receive payments Senior management decides to strengthen the internal control measures to address this Which of the following is considered an effective control to mitigate payments to ghost employees?

The staff salary payment list is reviewed by the head of payroll and endorsed by the head of human resources

Staff transfers are reviewed by the recruiting manager and approved by the head of human resources

New staff requisition forms are authorized by operational management and acknowledged by the head of human resources

Staff salary payments and accounting records are approved by the head of accounting and acknowledged by the head of human resources

The staff salary payment list is reviewed by the head of payroll and endorsed by the head of human resources

Which of the following best describes the type of organizational culture known as adaptability culture'?

A culture that emerges in quick-response and high-risk decision-making environments

A results-oriented culture that values competitiveness and personal initiative

A culture that emerges in quick-response and high-risk decision-making environments

A culture that is characterized by low involvement with environmental and health issues

A culture that places high value on participation and meeting the needs of employees.

Which of the following is true for consulting engagements'?

Risks identified from the engagement must be considered when evaluating the organization's risk management processes

The internal audit activity must ensure management actions have been effectively implemented or risk accepted

A work program for the engagement is not required but may be developed

The nature of consulting services does not have to be in the internal audit charter

Risks identified from the engagement must be considered when evaluating the organization's risk management processes

Which of the following statements is true regarding control activities'?

Control activities should be defined for all business processes

Control activities are defined by management through risk mitigation strategies

Control activities should be defined for all business processes

If two organizations have identical objectives and structures their control activities would be the same

Organizations that are less regulated generally have more complex control activities than highly regulated organizations

Which of the following statements is true regarding consulting and assurance engagements performed by the internal audit activity'?

For a consulting engagement, internal auditors and management jointly agree on the adequate criteria needed to evaluate governance, risk management, and controls. This is not true of assurance engagements

For both assurance and consulting engagements, the auditor must independently and objectively select the criteria for evaluation

For a consulting engagement, internal auditors and management jointly agree on the adequate criteria needed to evaluate governance, risk management, and controls. This is not true of assurance engagements

Engagement planning and fieldwork are similar for both types of engagements (there are no major differences) although the reporting process is different depending on which service is provided

For a consulting engagement objectives must address governance risk management and control processes to the extent agreed upon with the client. This is not true of assurance engagements

Which of the following is the first step in the process of identifying relevant fraud risk factors?

The use of brainstorming, management interviews, analytical procedures and review of prior frauds.

Identifying preventive and detective controls

Gathering information about the organization's business activities to gain an understanding of fraud risks

Engaging in strategic reasoning to anticipate the fraud scheme

The use of brainstorming, management interviews, analytical procedures and review of prior frauds.

According to IIA guidance, which of the following best describes expense reimbursement fraud'?

Theft of assets through false mileage travel logs and meal charges

Theft of cash after it is recorded in the books

Theft of cash before it is recorded in the books

Theft of assets through fictitious or inflated invoices

Theft of assets through false mileage travel logs and meal charges

The chief audit executive of an organization assigns audit resources to undertake a consulting engagement requested by senior management the previous year, and a scheduled assurance audit of the procurement process Which of the following appropriately differentiates the two engagements?

The objectivity of assurance services is impaired when undertaken by internal auditors who have had recent prior responsibility in the area under review; this is not the case for consulting services

The details of assurance services are expected to be included in the risk-based audit plan; this is not the case for consulting services.

The objectivity of assurance services is impaired when undertaken by internal auditors who have had recent prior responsibility in the area under review; this is not the case for consulting services

The performance of assurance services may be outsourced for competency gaps: this is not the case for consulting services.

The results of assurance services are required to be monitored; this is not the case for consulting services

The internal audit activity is performing an assessment of an organization's ethics program, and the engagement scope specifies a focus on the training program's design. According to IIA guidance, which of the following questions would be the most relevant?

Does the training include situations that require an ethical decision?

What percentage of employees have taken the training?

What are the results of the employee assessment of the organization's ethical climate?

Does the instructor provide feedback on the thought process to reach an ethical resolution?

IIA IIA-CIA-Part1 Practice Test 6 - Free Online Exam Prep & Questions

Question 1 / 40

Which of the following activities aligns with The IIA's Core Principles for the Professional Practice of Internal Auditing?

The chief audit executive reports to senior management for compensation decisions and communications of audit results to the board

Final reports from consulting engagements show the summary of findings, and the internal auditor's advice is clearly distinct and separate from management's decisions

Internal auditors rotate through operations and management positions then perform audit engagements on these areas to ensure timely application of their knowledge

Due to limited resources, internal auditors prioritize assurance on internal controls and risk management and exclude evaluating governance processes, which are deemed outside of their core responsibilities

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IIA IIA-CIA-Part1 Practice Test 6

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