IIA IIA Certifications IIA-CIA-PART1 Questions & Answers

• Question 481:

  In order to exercise due professional care as defined in the International Professional Practices Framework, an internal auditor should:

  I. Consider the probability of significant noncompliance in each audit engagement.

  II. Perform assurance procedures with sufficient care to ensure that all risks are identified.

  III.

  Weigh the cost of assurance against the benefits.

  A.

  I and II only

  B.

  I and III only

  C.

  II and III only

  D.

  I, II, and III.

  Correct Answer: B

• Question 482:

  Inadequate risk assessment would have the strongest negative impact in which of the following phases of an audit engagement?

  A. Determining the scope.

  B. Reviewing internal controls.

  C. Testing.

  D. Evaluating findings.

  Correct Answer: A

• Question 483:

  Which of the following would be the most useful in developing an annual audit plan?

  A. General purpose audit software.

  B. Voting software and hardware.

  C. Flowcharting and data capture software.

  D. Risk assessment software.

  Correct Answer: D

• Question 484:

  Which of the following is not an appropriate control related to sales in a manufacturing company?

  A. Customers' orders are recorded promptly.

  B. Goods shipped are matched with valid customer orders.

  C. Goods returned are inspected for damage by the sales department and then entered into inventory.

  D. Credit department approval is required for credit sales transactions.

  Correct Answer: C

• Question 485:

  The primary reason that a bank would maintain a separate compliance function is to:

  A. Better manage perceived high risks.

  B. Strengthen controls over the bank's investments.

  C. Ensure the independence of line and senior management.

  D. Better respond to shareholder expectations.

  Correct Answer: A

• Question 486:

  In order to save time, an audit manager no longer required that a standard internal control questionnaire be completed for each audit engagement. Does this represent a violation of the Standards?

  A. Yes, because internal control should be evaluated on every engagement and the internal control questionnaire is the mandated approach to evaluate controls.

  B. Yes, because internal control should be evaluated on every engagement and the internal control questionnaire is the most efficient method to do so.

  C. No, because auditors may omit necessary procedures if there is a time constraint, based on audit judgment.

  D. No, because auditors are not required to complete internal control questionnaires on every engagement.

  Correct Answer: D

• Question 487:

  The chief audit executive's responsibility regarding control processes includes:

  A. Assisting senior management and the audit committee in the development of an annual assessment about internal control.

  B. Overseeing the establishment of internal control processes.

  C. Maintaining the organization's governance processes.

  D. Ensuring that the internal audit activity assesses all control processes annually.

  Correct Answer: A

• Question 488:

  To identify those components of a telecommunications system that present the greatest risk, an internal auditor should first:

  A. Review the open systems interconnect network model.

  B. Identify the network operating costs.

  C. Determine the business purpose of the network.

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

  Correct Answer: C

• Question 489:

  A manufacturer uses a materials requirements planning (MRP) system to track inventory, orders, and raw materials requirements. What condition should an auditor search for in the MRP database if a preliminary assessment indicated that inventory is understated?

  I. Item cost set at zero.

  II. Negative quantities on hand.

  III. Order quantity exceeding requirements.

  IV.

  Inventory lead times exceeding delivery schedule.

  A.

  I and II only

  B.

  I and IV only

  C.

  II and IV only

  D.

  III and IV only

  Correct Answer: A

• Question 490:

  Which of the following actions would be considered a violation of the Standards?

  I. Drafts of engagement communications were reviewed with the audit client to obtain input. The client's comments were considered when developing the engagement final communication.

  II. An auditor participated as part of a development team to review the control procedures to be incorporated into a major computer application under development.

  III.

  Given limited resources, the chief audit executive performed a risk analysis to determine which functions to audit.

  A.

  II only

  B.

  I and III only

  C.

  I, II, and III.

  D.

  None of the above.

  Correct Answer: D