IIA IIA Certifications IIA-CIA-PART1 Questions & Answers

• Question 71:

  Which the following activities should be performed by the internal audit activity to facilitate an effective relationship with the audit committee?

  1.

  Periodically report about the accounting standards followed by the organization.

  2.

  Provide assurance to the audit committee that its charter, activities, and processes are appropriate.

  3.

  Ensure that the role and activities of the internal audit activity are clearly understood and responsive to the needs of the audit committee.

  4.

  Maintain open and effective communications with the audit committee.

  A. 1 and 2 only

  B. 3 and 4 only

  C. 1, 3, and 4 only

  D. 2, 3, and 4 only

  Correct Answer: D

• Question 72:

  An internal audit charter describes the mission and scope of the internal audit activity (IAA), responsibilities of the IAA, accountability of the chief audit executive, independence of the IAA, and standards followed by the IAA. Which of the following also should be included in the charter?

  A. The purpose of the IAA.

  B. The IAA's right to have unrestricted access to functions, records, personnel, and physical property.

  C. A detailed audit plan or program for the year.

  D. The job specifications and descriptions of the internal audit staff.

  Correct Answer: B

• Question 73:

  Which of the following best ensures an internal audit activity has the ability to render impartial and unbiased assessments?

  A. Organizational status and objectivity.

  B. Supervision of the chief audit executive (CAE) by senior management.

  C. Organizational knowledge and skills.

  D. CAE certification.

  Correct Answer: A

• Question 74:

  Why is a code of ethics for the internal audit profession necessary?

  A. It ensures that all members of the profession possess the same level of competence.

  B. It provides auditors with protection from lawsuits.

  C. It guides internal auditors in their service to others.

  D. It requires auditors to exhibit loyalty to their organizations.

  Correct Answer: C

• Question 75:

  Which of the following statements best explains why internal auditors map processes?

  1.

  To obtain audit evidence to support auditor's observations.

  2.

  To determine scope and objectives of the audit.

  3.

  To facilitate the identification of ownership and responsibility for key risks.

  4.

  To identify potential efficiency improvements.

  A. 1 and 2.

  B. 1 and 3.

  C. 2 and 4.

  D. 3 and 4.

  Correct Answer: D

• Question 76:

  An internal auditor is conducting an engagement in the accounts payable department, which includes expressing an opinion at the micro level. According to IIA guidance, which of the following statements is true regarding micro-level opinions?

  1.

  They are most effective when using a combination of current and prior engagement findings to draw conclusions.

  2.

  They typically are based on defined procedures such as those found in an accounts payable reconciliation process.

  3.

  They are discrete and not normally shared with senior management or the board.

  4.

  They can rely on evidence taken from the work of other assurance activities across the organization.

  A. 1 and 2.

  B. 1 and 3.

  C. 2 and 3.

  D. 3 and 4.

  Correct Answer: C

• Question 77:

  An internal auditor makes a series of observations when performing an analytical review of division operations. The auditor notes the following things: the current ratio is increasing and the quick ratio is decreasing, sales and current liabilities have remained constant, and the number of day sales in inventory is increasing. Which conclusion should the auditor draw from this data?

  A. Cash or accounts receivable has decreased.

  B. The gross margin has decreased.

  C. The division produced fewer items this year than in prior years.

  D. The gross margin has increased.

  Correct Answer: A

• Question 78:

  Which of the following audit procedures would provide the most relevant information to identify discrepancies between budgeted versus actual raw material consumption in a production facility?

  A. Analytical review.

  B. Inquiry.

  C. Document verification.

  D. Observation.

  Correct Answer: A

• Question 79:

  Which of the following would provide the best evidence of errors in the quantities of items received from suppliers?

  A. Suppliers' reports of over shipments.

  B. Warehouse receiving logs.

  C. Purchase requisitions and purchase orders.

  D. Observation and inspection of inventory.

  Correct Answer: B

• Question 80:

  Which of the following is the most significant disadvantage of using checklists to evaluate internal controls?

  A. They serve as a reminder of what controls should exist in a process.

  B. They require yes/no responses to specific questions, not open-ended responses.

  C. They do not capture all controls that may exist.

  D. They are useful in assessing risk.

  Correct Answer: C