IIA IIA Certifications IIA-CIA-PART1 Questions & Answers

• Question 311:

  Which of the following sources of evidence would be least persuasive regarding potential waste and inefficiency on the part of a contractor?

  A. The contractor's certification that it has not incurred any waste or inefficiencies.

  B. A walk-through of the contractor's manufacturing and development facilities.

  C. An examination of the nature of contract expenses incurred.

  D. A comparison of contract expenses with those of similar projects.

  Correct Answer: A

• Question 312:

  Which of the following is least likely to be considered material in an audit of a medium-sized organization?

  A. A $1, 000 overstatement of the accrued-vacation payable account.

  B. A violation of a government statute.

  C. Fraud resulting in a cash loss to the organization.

  D. An underpayment to the employee pension fund.

  Correct Answer: A

• Question 313:

  A receiving department receives copies of purchase orders for use in identifying and recording inventory

  receipts.

  The purchase orders list the name of the vendor and the quantities of the materials ordered.

  A possible error that this system could allow is:

  A. Payment to unauthorized vendors.

  B. Payment for unauthorized purchases.

  C. Overpayment for partial deliveries.

  D. Delay in recording purchases.

  Correct Answer: C

• Question 314:

  Which of the following actions by the internal audit activity provides strong evidence that it is organizationally independent?

  A. It reviews engagement results for evidence of undue influence before releasing the final report.

  B. It requires all internal audit staff to sign annual non-disclosure and potential conflict of interest statements.

  C. It maintains direct interactions with the audit committee or board.

  D. It releases an approved internal audit charter stating that the internal audit activity is independent.

  Correct Answer: C

• Question 315:

  Which of the following statements is correct with regard to risk management?

  A. The board's responsibility for risk management cannot be assigned to a board committee, such as a board risk committee.

  B. The chief audit executive is accountable to the board for designing, implementing and monitoring the risk management process.

  C. The total process of risk management, which includes a related system of internal control, is the responsibility of the board.

  D. The finance director is responsible for the overall implementation of the risk management process.

  Correct Answer: C

• Question 316:

  An internal auditor audited a department store's cash function. Which of the following actions would indicate a lack of due professional care by the auditor?

  A. Based on a well-designed system of internal controls over the cash function, the audit report assured senior management that no irregularities existed.

  B. A flowchart of the entire cash function was developed but only samples of transactions were tested.

  C. The audit report included a well-supported recommendation for a reduction in staff even though such a reduction might adversely impact morale.

  D. The auditor informed appropriate authorities within the organization about suspected wrongdoing but did not inform external authorities.

  Correct Answer: A

• Question 317:

  Which of the following would be an appropriate outcome of a quality assurance and improvement program in an internal audit activity?

  1.

  Modification of resources.

  2.

  Corrections to procedures.

  3.

  Changes in processes.

  4.

  Implementation of new technology.

  A. 2 and 4 only

  B. 3 and 4 only

  C. 1, 2, and 3 only

  D. 1, 2, 3, and 4

  Correct Answer: D

• Question 318:

  Which of the following internal control weaknesses would an internal auditor most likely detect while reviewing a flowchart that depicts the purchasing function of an organization?

  A. Purchasing policies have not been updated.

  B. The organization is not taking advantage of quantity discounts available from its suppliers.

  C. Payments for goods received have not been authorized at the appropriate level.

  D. Payments to suppliers are made before goods are received.

  Correct Answer: D

• Question 319:

  An internal auditor pays to participate in the company's annual golf tournament, which is held outside of normal business hours.

  The auditor wins the putting contest and is awarded an all-expense-paid weekend vacation.

  According to the IIA Code of Ethics regarding objectivity, the auditor's best course of action would be to:

  A. Refuse the prize because the amount is significant.

  B. Accept the prize because the event was held outside of normal business hours.

  C. Refuse the prize because it represents an impairment to objectivity.

  D. Accept the prize because the auditor received no special treatment.

  Correct Answer: D

• Question 320:

  During the planning phase of an audit of suspected overbilling on contracts for security services, an internal auditor should perform all of the following except:

  A. Interview an official of the security services company to determine the cause of recent increases in billings for services.

  B. Interview the manager who requested the audit engagement.

  C. Obtain a copy of the contract between the two organizations.

  D. Prepare an engagement program.

  Correct Answer: A