IIA IIA Certifications IIA-CIA-PART1 Questions & Answers

• Question 371:

  Which of the following internal controls is likely to prevent pollution from waste disposal before it occurs, rather than detect it after it occurs?

  A. Identification of large budget variances in disposal costs for hazardous chemicals.

  B. Restricted access to environmental department files.

  C. Formal on-the-job training program conducted by the environmental staff.

  D. Samples of water and solid waste taken daily with the results recorded in a log.

  Correct Answer: C

• Question 372:

  Which of the following is most likely to be an element of an effective compliance program?

  A. The internal audit activity is assigned responsibility for overseeing the program.

  B. The program is communicated to employees in a video format on a one-time basis.

  C. The organization uses monitoring systems designed to detect improper activity.

  D. The organization obtains as much information as possible when performing background checks on employees.

  Correct Answer: C

• Question 373:

  Which of the following best describes the procedures used by the representatives of an organization's stakeholders to provide oversight of the processes administered by management?

  A. Governance

  B. Control

  C. Risk management

  D. Monitoring

  Correct Answer: A

• Question 374:

  In assessing the independence of the internal audit activity, a member of a peer review team should consider all of the following factors except:

  A. Access to and frequency of communications with the board of directors or its audit committee.

  B. The criteria of education and experience considered necessary when filling vacant positions on the audit staff.

  C. The degree to which auditors assume operating responsibilities.

  D. The scope and depth of engagement objectives for the audit engagements included in the review.

  Correct Answer: B

• Question 375:

  Which of the following actions by a chief audit executive is most likely to prevent exaggerated sales reports by division management?

  I. Hire a new internal auditor who has fraud investigation credentials.

  II. Assist the controller in developing and monitoring a series of business process indicators which are historically correlated with, but independent of, sales.

  III. Announce a series of internal audit engagements focusing on compliance with corporate sales-reporting policies.

  IV. Ask the president and the board to issue a statement of corporate policy stressing the importance of accurate management reporting and the negative consequences of intentional misreporting.

  A. I and II only

  B. II and III only

  C. III and IV only

  D. I, II, III, and IV.

  Correct Answer: C

• Question 376:

  When planning the work program for an assurance engagement, an internal auditor should first review the department's business objectives and then:

  A. Identify risks.

  B. Review controls.

  C. Determine scope.

  D. Evaluate vulnerabilities.

  Correct Answer: A

• Question 377:

  It is important for a chief audit executive to seek formal approval from the board regarding an internal audit charter so that:

  A. The effectiveness of the internal audit activity can be measured.

  B. The status of the internal audit activity can be more clearly established.

  C. There is assurance that all internal audit activities will be completed.

  D. Improvements can be implemented in internal audit processes.

  Correct Answer: B

• Question 378:

  According to the International Professional Practices Framework, risk is:

  I. Defined as the negative effect of events that are expected to occur.

  II. Measured in terms of consequences.

  III.

  Measured in terms of likelihood.

  A.

  I only

  B.

  I and II only

  C.

  II and III only

  D.

  I, II, and III.

  Correct Answer: C

• Question 379:

  The percentage of orders that are rush orders and the percentage of returns to total orders are examples of which of the following types of control activities?

  A. Quality control monitoring.

  B. Direct functional management.

  C. Benchmarking.

  D. Performance indicators.

  Correct Answer: D

• Question 380:

  Risk within an internal audit engagement is defined as the:

  A. Probability that a balance or class of transactions and related assertions contain misstatements that could be material to the financial statements.

  B. Uncertainty of an event occurring that could have an impact on the achievement of objectives.

  C. Failure to adhere to organizational policies, plans, and procedures, or the failure to comply with relevant laws and regulations.

  D. Failure to accomplish established objectives and goals for operations or programs.

  Correct Answer: B