IIA IIA-CIA-Part1 Practice Test - Questions Answers, Page 60
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According to IIA guidance, which of the following statements is true regarding consulting engagements performed by the internal audit activity?
Consulting engagements typically involve four or five parties: the internal audit activity, engagement client, senior management, board, and sometimes the external auditor.
The scope of a consulting engagement is determined by either the engagement supervisor or chief audit executive, and it is finalized prior to beginning fieldwork.
According to the Standards, internal auditors are permitted to carry out certain management functions during a consulting engagement.
A preliminary risk assessment may not be needed for consulting engagements, because the expectations and objectives of the engagement are determined by the engagement client.
According to HA guidance, if an internal auditor suspects fraud during an assurance engagement, what should the auditor do first?
Recommend parties involved to be sanctioned in accordance with the organization's policy.
Determine whether any additional audit work needs to be performed.
Launch an investigation to obtain details of the fraud and parties involved.
Request that the responsible process owner remediate the issue immediately.
A new chief audit executive wants to develop a formal internal control framework for her organization. She uses globally accepted frameworks as a guide. Which of the following would she likely find critical in creating the new framework for her organization?
Independent assessments.
Continuous monitoring.
Business continuity and backups.
Organization wide objectives.
A global manufacturing company has three regional offices. The chief audit executive (CAE) is concerned about the cost of an upcoming external quality assessment of the internal audit activity. The last external assessment was performed six years ago. Recently, the internal audit staff at one of the regional offices performed an internal assessment. To ensure conformance with the Standards, what is the most appropriate action for the CAE to take?
Request from the audit committee an additional budget and an extension so that the external assessment could be performed next year.
Review the results of the internal assessment, identify weaknesses, and implement improvements at the remaining offices.
Request the regional office that performed the internal assessment to perform an assessment of the remaining offices.
Request that an external assessor validate the results of the internal assessment and review the remaining offices.
Which of the following describes a responsibility of operating management in an organization's corporate social responsibility (CSR) efforts?
Responsible for implementing CSR principles and overseeing of CSR performance.
Responsible for performing periodic internal self-verifications of reported CSR results.
Responsible for performing analysis and comparison of CSR reports and performance.
Responsible for ongoing CSR reporting and accomplishing of performance targets.
Which of the following relates to the concept of due professional care?
An auditor attempts to obtain information needed to complete an assurance engagement but is denied access.
The appointment of the chief audit executive is ratified by the board.
An auditor demonstrates a good understanding of the steps involved in carrying out a consulting engagement.
The internal audit resource plan is only approved by the chief financial officer.
The same internal auditor has audited the regional purchasing department annually for the last three years. The audits have shown several significant control deficiencies that have not been corrected by management. New management is in charge of this regional purchasing department, and it is time to audit the department again. What concerns should be considered prior to assigning the audit to the same auditor?
Intimidation threats may compromise the auditor's objectivity due to multiple negative audit reports completed by the auditor.
The auditor has reviewed the department annually for the last three years, leading to familiarity, which can impact the internal audit activity's independence.
A negative cognitive bias may be in place that affects the employee's objectivity due to the recent audits with uncorrected control deficiencies.
The auditor may have formed a cultural bias, as the department under review is in the auditor's geographic area.
In a small company with a small budget, the board and senior management asked the chief audit executive (CAE) to develop specific controls prompted by a new regulatory requirement affecting a specific process. The CAE was also directed to report functionally to senior management. An audit engagement on this process was already set in the internal audit plan. Which of the following represents an impairment to the internal audit activity's independence?
The development of controls by the CAE.
The audit engagement regarding this process.
The functional reporting of the CAE to senior management.
The small budget.
During the planning stage of an assurance engagement, a payroll clerk informed the internal auditor that he is often asked to add new employees to the payroll without any formal new-hire documentation from human resources. The auditor is concerned that this increases the risk for fraud. To complete engagement planning, which of the following is the most appropriate next step for the auditor to take?
Increase the sample size to be tested, ensuring a thorough review of the payroll records.
Advise the chief audit executive of the clerk's assertion, despite the lack of supporting evidence.
Ask the clerk to provide a list of any suspicious new employee names on the payroll.
Investigate the matter further to understand precisely how many payroll records were affected.
Which of the following is the internal audit activity expected to do with respect to the organization's governance processes?
Formally audit all governance activities.
Provide strategic guidance on the organizational processes to senior management.
Achieve agreement with the board regarding the range of activities, depth of review, and time period to include in the assessment.
Audit against the governance structures and practices widely used in the industry.
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