IIA IIA Certifications IIA-CIA-PART1 Questions & Answers

• Question 461:

  Which of the following is not true with regard to the internal audit charter?

  A. It defines the authorities and responsibilities of the internal audit activity.

  B. It specifies the minimum resources needed for the internal audit activity.

  C. It provides a basis for evaluating the internal audit activity.

  D. It should be approved by senior management and the board.

  Correct Answer: B

• Question 462:

  To enhance the independence of both the internal and external audit functions, audit committees should be composed of:

  A. A rotating subcommittee of the board of directors or its equivalent.

  B. A combination of external members of the board of directors and company officers.

  C. Members from all important constituencies, specifically including representatives from banking, labor, regulatory agencies, shareholders, and officers.

  D. Only external members of the board of directors or other similar oversight committees.

  Correct Answer: D

• Question 463:

  During a review of data center physical security and environmental controls, an auditor should ensure that:

  I. Visitors are accompanied by authorized personnel at all times.

  II. Only developers and operators have access to the data center.

  III. Fire suppression equipment is tested periodically.

  IV.

  Fire and water detectors have been installed.

  A.

  I and III only

  B.

  II and IV only

  C.

  I, III, and IV only

  D.

  II, III, and IV only

  Correct Answer: C

• Question 464:

  Which of the following best contributes to the effectiveness of the internal audit activity in an organization?

  A. Appropriate terms of internal audit scope and responsibility in the charter.

  B. Appropriate compliance coverage in the annual audit plan.

  C. Regular review of the audit charter by management.

  D. Assurance of internal audit objectivity by the board.

  Correct Answer: A

• Question 465:

  When reviewing management reports to the board of directors, the internal audit activity should:

  A. Evaluate the process used to prepare the management reports.

  B. Maintain supporting documentation for the management reports.

  C. Tie all financial numbers in the reports to the general ledger.

  D. Compare to prior-period reports for consistency.

  Correct Answer: A

• Question 466:

  The internal audit activity's role in the risk assessment and management processes of an organization is determined by the:

  A. Board of directors.

  B. Chief audit executive.

  C. Risk management department.

  D. External auditors.

  Correct Answer: A

• Question 467:

  Overall audit efficiency is enhanced between the internal and external audit functions when:

  A. Internal audit coverage is reduced to avoid potential conflicts of interest.

  B. Audits of the same department are conducted at different times.

  C. The internal audit department reviews functions or departments prior to the external audit.

  D. External audit scope is reduced based on the internal audit department's activities.

  Correct Answer: D

• Question 468:

  In publicly held companies, management often requires the internal audit activity's involvement with quarterly financial statements that are made public and used internally. Which of the following is generally not a reason for such involvement?

  A. Management may be concerned about its reputation in the financial markets.

  B. Management may be concerned about potential penalties that could occur if quarterly financial statements are misstated.

  C. The Standards state that internal auditors should be involved with reviewing quarterly financial statements.

  D. Management may perceive that having quarterly financial information examined by the internal auditors enhances its value for internal decision making.

  Correct Answer: C

• Question 469:

  At the beginning of fieldwork in an audit of investments, an internal auditor noted that the interest rate had declined significantly since the engagement work program was created. The auditor should:

  A. Proceed with the existing program since this was the original scope of work that was approved.

  B. Modify the audit program and proceed with the engagement.

  C. Consult with management to verify the interest rate change and proceed with the engagement.

  D. Determine the effect of the interest rate change and whether the program should be modified.

  Correct Answer: D

• Question 470:

  Which of the following would provide the most reliable information on the risk associated with an auditable activity?

  A. Event scenarios with regression analysis.

  B. Past audit findings and instances of management failures.

  C. Consequences and economic predictability of loss.

  D. Management assessment and corroboration by the internal audit activity.

  Correct Answer: D