IIA IIA Certifications IIA-CIA-PART1 Questions & Answers

• Question 411:

  When performing benchmarking during the planning phase of a performance audit, an internal auditor should:

  A. Determine the current performance gap.

  B. Project future performance levels.

  C. Develop functional action plans.

  D. Identify comparative organizations.

  Correct Answer: D

• Question 412:

  Which of the following would provide the best assessment of an organization's ethical climate?

  A. Number of years that directors have been appointed to the board.

  B. Evidence of training provided to the board of directors on ethical issues.

  C. Clarity and consistency of consequences imposed by the board of directors for ethical violations.

  D. Frequency of fraud reported and results of subsequent investigations.

  Correct Answer: C

• Question 413:

  A chief audit executive used risk assessment to prepare the audit work schedule. Which of the following would be the least appropriate reason to modify the schedule?

  A. Need for coordination of audit activities with the external auditors.

  B. Request for postponement since the audit would be too complicated.

  C. Change in the relative risk of auditable activities during the year.

  D. Budget constraints or expansions.

  Correct Answer: B

• Question 414:

  Which of the following would be the most effective action for an internal audit activity to take in order to assist in improving an organization's ethical climate?

  I. Review formal and informal processes within the organization that could promote unethical behavior.

  II. Conduct surveys of employees, suppliers, and customers regarding ethics.

  III.

  Assess the employees' knowledge of and compliance with the organization's code of conduct.

  A.

  I only

  B.

  I and II only

  C.

  II and III only

  D.

  I, II, and III.

  Correct Answer: D

• Question 415:

  Which of the following factors related to an organization's performance management system would not contribute to the organization's success?

  A. Performance management is linked to competence and knowledge management.

  B. Subordinates and superiors have shared responsibility for the performance management process.

  C. Staff members own the performance management process, thereby ensuring implementation and accountability.

  D. Performance management is integrated into other organizational processes and human resource processes.

  Correct Answer: C

• Question 416:

  When reviewing operational risk for a department whose manager adopts a laissez-faire style of

  leadership, it is most important for the internal auditor to verify that:

  A. Employee decisions follow department and company guidelines.

  B. The manager considers employees' input when designing new procedures.

  C. Employees are empowered to deal with unusual or emergency situations.

  D. Management has adopted an open-door policy to assist with communication.

  Correct Answer: A

• Question 417:

  All of the following would normally be involved in preparing for and carrying out the internal audit activity's annual plan except:

  A. Establishing policies and procedures for workpapers and referencing.

  B. Providing periodic activity reports to the audit committee on audit engagements in progress.

  C. Assessing the amount of risk in major departments.

  D. Training audit staff on appropriate audit methodologies for addressing any newly identified risks.

  Correct Answer: A

• Question 418:

  When a risk assessment process has been used to construct an audit engagement schedule, which of the following should receive attention first?

  A. The external auditors have requested assistance for their upcoming annual audit.

  B. A new accounts payable system is currently undergoing testing by the information technology department.

  C. Management has requested an investigation of possible lapping in receivables.

  D. The existing accounts payable system has not been audited over the past year.

  Correct Answer: C

• Question 419:

  When an external auditor unknowingly fails to modify an opinion on financial statements that are materially misstated, this is an example of:

  A. An inherent risk.

  B. A control risk.

  C. An audit risk.

  D. A residual risk.

  Correct Answer: C

• Question 420:

  A tax consultancy agency retains sensitive personal information regarding its clients. Which of the following is a violation of acceptable privacy practices?

  A. Copies of printed client information not used by the agency are shredded.

  B. Employees share client information with coworkers with the permission of the client.

  C. The agency only releases client information with management's approval.

  D. The agency advises clients of their privacy rights before they commence business with the agency.

  Correct Answer: C