IIA IIA Certifications IIA-CIA-PART1 Questions & Answers

• Question 181:

  While performing an internal audit engagement, an auditor reviews a flowchart of the organization's purchasing function. Which of the following internal control weaknesses would the auditor be able to identify in the chart?

  A. That purchasing policies have not been updated.

  B. That supplier invoices are processed and paid before the goods are received.

  C. That the organization is not taking advantage of quantity discounts available from its suppliers.

  D. That authorization for payment of goods received has not been granted at the appropriate level.

  Correct Answer: B

• Question 182:

  Which of the following policies exemplifies a control weakness in the approval and oversight of credit sales?

  A. The credit department is responsible for approving shipments to all customers.

  B. The head of the sales department can authorize credit lines for large customers.

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

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

  Correct Answer: B

• Question 183:

  An internal auditor is planning an audit of an organization where temporary employees are suspected of receiving pay for hours they have not worked. Which of the following tasks should not be performed at this stage in the audit?

  A. Interviewing the manager who requested the audit engagement.

  B. Obtaining a copy of the contract between the organizations and the temporary employment agency.

  C. Interviewing shift supervisors about their employees' attendance.

  D. Preparing an engagement program.

  Correct Answer: C

• Question 184:

  When conducting a preliminary survey, which of the following audit activities should an internal auditor complete first?

  A. Identify risks and controls intended to prevent associated losses.

  B. Write detailed audit procedures.

  C. Identify client objectives, goals, and standards.

  D. Determine relevant engagement objectives.

  Correct Answer: C

• Question 185:

  An organization references a customer order with an approved customer file and credit limit before accepting an order. Which type of control does this process exemplify?

  A. Quality control monitoring.

  B. Direct functional management.

  C. Information processing.

  D. Performance indicators.

  Correct Answer: C

• Question 186:

  Which of the following actions would have the greatest impact on the effectiveness of the internal audit activity?

  A. Appropriate compliance coverage in the annual audit plan.

  B. Annual review of the audit charter by management.

  C. Appropriate definition of internal audit scope and responsibility in the charter.

  D. Assurance of internal audit objectivity and organizational independence by the board.

  Correct Answer: C

• Question 187:

  An internal auditor must determine which components of an organization's telecommunications may introduce the greatest risk. Which of the following tasks should the internal auditor complete first?

  A. Review the open systems interconnect network model.

  B. Identify the network operating costs.

  C. Map the network software and hardware products into their respective layers.

  D. Ascertain the business purpose of the network.

  Correct Answer: D

• Question 188:

  An internal auditor is researching the laws and regulations related to a city's grant program. Which of the following procedures is least relevant to this task?

  A. Making inquiries of the audit committee about the nature of the grants.

  B. Reviewing prior-year workpapers and asking officials if there have been any changes.

  C. Reviewing applicable grant agreements.

  D. Discussing the matter with the city's chief financial officer, legal counsel, or grant administrators.

  Correct Answer: A

• Question 189:

  A manufacturer uses improved linkage between order entry, production, and shipping to reduce raw materials and work-in-process inventory. Which type of fraud will these changes likely reduce?

  A. Payment of fraudulent invoices.

  B. Purchases from a related party.

  C. Theft of resources from inventory.

  D. False reporting of hours worked.

  Correct Answer: C

• Question 190:

  In selecting a team to perform an internal audit of a purchasing operation, which of the following characteristics would not preclude an auditor from being selected?

  1.

  The auditor's spouse is employed by the clerical section of the purchasing records unit.

  2.

  The auditor had been a purchasing agent five years earlier.

  3.

  The auditor's family owns a business that regularly sells goods to the organization.

  4.

  The auditor has received a desk calendar as a promotional gift from a vendor.

  A. 1 and 3 only

  B. 1 and 4 only

  C. 2 and 3 only

  D. 2 and 4 only

  Correct Answer: D