IIA IIA Certifications IIA-CIA-PART1 Questions & Answers

• Question 141:

  Suspecting fraud, the chief financial officer (CFO) asked the internal audit activity to investigate a significant increase in travel related expenditures. Work was performed by a qualified internal auditor. Following the completion of the engagement, the chief audit executive (CAE) reported to the CFO that no violations were found and no fraud had occurred.

  According to the Standards, which of the following principles did the CAE violate?

  A. Due professional care.

  B. Individual objectivity.

  C. Proficiency.

  D. Organizational independence.

  Correct Answer: A

• Question 142:

  The chief audit executive (CAE) has been asked to manage the regulatory compliance function for the organization's retail store operations. Store operations are included in the annual audit plan.

  Which of the following strategies best fulfills the requirements of the Standards regarding these audits?

  A. The scope of store operations audits should exclude compliance.

  B. Store operations audits can be fully executed with appropriate disclosure to the board.

  C. Store operations audits should be performed by an external service provider.

  D. A store operations compliance audit should be performed by a staff internal auditor under the direction of the CAE.

  Correct Answer: C

• Question 143:

  An internal audit activity (IAA) provided assurance services for an activity it was responsible for during the preceding year.

  As a result, which IIA Code of Ethics principle is presumed to be impaired?

  A. Competence.

  B. Flexibility.

  C. Objectivity.

  D. Independence.

  Correct Answer: C

• Question 144:

  According to the Standards, for how long should internal auditors who have previously performed or had management responsibility for an operation wait to become involved in future internal audit activity with that same operation?

  A. Three months.

  B. Six months.

  C. One year.

  D. Two years.

  Correct Answer: C

• Question 145:

  A chief audit executive (CAE) of an international charity reports functionally to the audit committee of the board of directors and administratively to the charity's chief financial officer (CFO).

  Which of the following would impair the internal audit function's independence?

  A. The CFO determines the scope of internal audit work in the accounting department.

  B. The CFO manages the accounting of the budget for the internal audit function.

  C. The CFO administers the annual evaluation process for the internal auditors.

  D. The CFO provides feedback on the CAE's audit reports.

  Correct Answer: A

• Question 146:

  While attending a conference, an internal auditor won an all-expense paid trip sponsored by a vendor of the internal auditor's organization.

  Which of the following actions are most appropriate for the auditor to take?

  A. Consult with an immediate supervisor and notify the organization's audit committee.

  B. Consult with an immediate supervisor and review the organization's ethics policy.

  C. Give the prize to a friend or family member and notitfy the organization's audit committee.

  D. Give the prize to a friend or family member and review the organization's ethics policy.

  Correct Answer: B

• Question 147:

  Which of the following activities best reflects the scope and status of the internal audit activity as defined in the internal audit policy statement?

  A. The internal auditor reviews the physical access to merchandise during an inventory count.

  B. The audit manager conducts an internal quality assessment of the internal audit activity's adherence to the Standards.

  C. The audit manager refrains from assigning an auditor who was a former payroll clerk to conduct a payroll audit.

  D. The board approves the annual performance evaluation of the chief audit executive.

  Correct Answer: A

• Question 148:

  Which of the following scenarios would represent the greatest threat to the authority of the internal audit activity (IAA)?

  A. A change was implemented requiring the IAA to report administratively to the organization's chief legal counsel rather than the board.

  B. Responsibility for risk management processes were removed from the IAA and placed under a newly created chief risk officer.

  C. The IAA was denied access to expenditure and budget requirement reports because the reports were considered to be financial administrative matters.

  D. An internal auditor was informed by the chief financial officer that client survey results would be unfavorable unless the auditor changed a finding in the report.

  Correct Answer: C

• Question 149:

  A staff auditor, nearly finished with an audit engagement, discovers that the director of marketing has a gambling habit. The gambling issue is not directly related to the existing engagement, and there is pressure to complete the current engagement. The auditor notes the problem and forwards the information to the chief audit executive, but performs no further follow-up.

  Which of the following statements is true about the auditor's actions?

  A. They are in violation of the IIA Code of Ethics because the auditor withheld meaningful information.

  B. They are in violation of the Standards because the auditor did not properly follow up on a red flag that might indicate the existence of fraud.

  C. They are in violation of neither the IIA Code of Ethics nor the Standards.

  D. They are not in violation of the Standards but are in violation of the IIA Code of Ethics.

  Correct Answer: C

• Question 150:

  During the course of an audit, an internal auditor discovers that a valuable employee in the research department has been patenting new developments in the employee's name that are unrelated to the basic business of the organization.

  The organization does not have a policy addressing this specific issue, but does have a general policy that all important new discoveries by employees are the property of the organization. Division management views the employee's actions as extra incentive to retain the employee.

  A decision to include the employee's action in the engagement final communication would be:

  1.

  A violation of the IIA Code of Ethics.

  2.

  A violation of the reporting requirements in the Standards.

  3.

  Justified and necessary, according to the IIA Code of Ethics and Standards.

  A. 1 only

  B. 2 only

  C. 3 only

  D. 1 and 2 only

  Correct Answer: C