IIA IIA Certifications IIA-CIA-PART1 Questions & Answers

• Question 491:

  To promote a positive image within an organization, a chief audit executive (CAE) adjusted the audit plan to focus on assurance engagements that highlighted potential costs to be saved. Negative observations were to be omitted from engagement final communications. Which action taken by the CAE would be considered a violation of the Standards?

  I. The focus of the audit function was changed without modifying the audit charter or notifying the audit committee.

  II. Negative observations were omitted from the engagement final communications.

  III.

  Cost savings and recommendations were highlighted in the engagement final communications.

  A.

  II only

  B.

  I and II only

  C.

  I and III only

  D.

  I, II, and III.

  Correct Answer: B

• Question 492:

  Which of the following would be the least desirable criteria against which to judge current operations of a company's treasury function?

  A. The operations of the treasury function as documented during the last audit engagement.

  B. Company policies and procedures delegating authority and assigning responsibilities.

  C. Finance textbook illustrations of generally accepted good treasury function practices.

  D. Codification of best practices of the treasury function in relevant industries.

  Correct Answer: A

• Question 493:

  A bakery chain has a statistical model that can be used to predict daily sales at individual stores based on a direct relationship to the cost of ingredients used and an inverse relationship to rainy days. What conditions would an auditor look for as an indicator of employee theft of food from a specific store?

  A. On a rainy day, total sales are greater than expected when compared to the cost of ingredients used.

  B. On a sunny day, total sales are less than expected when compared to the cost of ingredients used.

  C. Both total sales and cost of ingredients used are greater than expected.

  D. Both total sales and cost of ingredients used are less than expected.

  Correct Answer: B

• Question 494:

  Which of the following is a benefit from reduced testing during a particular phase of an audit engagement?

  A. The size of the internal audit activity can be reduced.

  B. There is less concern about assessing inherent risk.

  C. The level of planned audit risk is lowered.

  D. Additional audit hours are available for pursuing other engagement objectives.

  Correct Answer: D

• Question 495:

  Internal auditors exercise judgment about the type and amount of information to be collected. The primary purpose of this judgment is to:

  A. Eliminate the risk of drawing incorrect conclusions.

  B. Minimize the cost of the audit engagement.

  C. Comply with the Standards.

  D. Provide a sound basis for audit observations and recommendations.

  Correct Answer: D

• Question 496:

  Which source of audit evidence would provide the least value in flowcharting an organization's purchasing process?

  A. An interview with the purchasing supervisor.

  B. A review of a sample of purchase orders which were completed during the last month.

  C. A review of the purchasing policies and procedures manual.

  D. A walk-through of the process with a member of the purchasing staff.

  Correct Answer: B

• Question 497:

  Which of the following internal control weaknesses would an 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 498:

  An objective for an audit of a medical research corporation is to evaluate management's controls to ensure that timely reports are submitted to sponsors of contracted research projects. In planning the audit to achieve this objective, the auditor should begin by:

  A. Reviewing policies and procedures.

  B. Interviewing a group of research managers.

  C. Observing report preparation in a number of laboratories.

  D. Sending a questionnaire to a sample of research sponsors.

  Correct Answer: A

• Question 499:

  An audit of the quality control department is being planned. Which of the following would least likely be used in the preparation of a preliminary survey questionnaire?

  A. An analysis of quality control documents.

  B. The permanent audit file.

  C. The prior audit report.

  D. Management's charter for the quality control department.

  Correct Answer: A

• Question 500:

  Auditors 1, 2, and 3 work out of various offices. Each must be assigned to one, and only one, of three audit locations (A, B, or C). The cost of sending each auditor to each location is listed below:

  Audit Locations

  Auditor 1 A B

  Auditor 2 $200 $300 $400

  Auditor 3 $400 $300 $600

  Auditor 4 $200 $200 $500

  The minimum cost with which this assignment can be accomplished is:

  A. $800

  B. $900

  C. $1, 000

  D. $1, 100

  Correct Answer: B