IIA IIA Certifications IIA-CIA-PART1 Questions & Answers

• Question 81:

  According to IIA guidance, which of the following objectives of an assurance engagement for the organization's risk management process is valid?

  A. All risks have been identified and mitigated.

  B. Risks have been accurately analyzed and evaluated.

  C. All controls are both adequate and efficient.

  D. The board is appropriately addressing intolerable risks.

  Correct Answer: B

• Question 82:

  Which of the following would not be a red flag for fraud?

  A. Several recent, large expenditures to a new vendor have not been documented.

  B. A manager has bragged about multiple extravagant vacations taken within the last year, which are excessive relative to the manager's salary.

  C. A weak control environment has been accepted by management to encourage creativity.

  D. New employees occasionally fail to meet established project deadlines due to staffing shortages.

  Correct Answer: D

• Question 83:

  Which of the following conditions is the most likely indicator of fraud?

  A. Commissions are paid based on verified increases to sales.

  B. Departmental reports are consistently issued in an untimely manner.

  C. A manager regularly assumes subordinates' duties.

  D. Lower earnings occur during the industry's down cycle.

  Correct Answer: C

• Question 84:

  An accounts receivable clerk receives cash payments, posts the payments to customer accounts, and

  prepares the daily cash deposit.

  The clerk has been stealing some cash and manipulating the customer payments to hide the theft.

  This fraud could be detected with which of the following controls?

  A. Monthly bank reconciliations are performed by the clerk on a timely basis.

  B. Total cash deposits for the month are reconciled to the cash receipts journal.

  C. Names, amounts, and dates on remittance advices are reconciled with the names, amounts, and dates recorded in the cash receipts journal.

  D. Total cash deposits are compared with the bank reconciliation.

  Correct Answer: C

• Question 85:

  Which of the following is a second line of defense in effective risk management and control?

  A. Purchasing department.

  B. Compliance department.

  C. Credit department.

  D. Internal audit department.

  Correct Answer: B

• Question 86:

  Which of the following is the most effective strategy to manage the risk of foreign exchange losses due to sales to foreign customers?

  A. Hire a risk consultant.

  B. Implement a hedging strategy.

  C. Maintain a large foreign currency balance.

  D. Insist that customers only pay in a stable currency.

  Correct Answer: B

• Question 87:

  Which of the following is not a role of the internal audit activity in facilitating risk identification and evaluation?

  A. Evaluating risk management processes.

  B. Recommending accountability for risk management.

  C. Providing assurance that risks are evaluated correctly.

  D. Supporting managers to identify ways to mitigate risks.

  Correct Answer: B

• Question 88:

  While reviewing first quarter sales transactions, an internal auditor discovered that 10 invoices for a new customer had not been posted into the accounts receivable subsidiary ledger. Those 10 invoices were listed in an error report automatically generated by the sales processing system. The system had rejected the invoices because the customer's account number was not found in the customer master file. In this scenario, which of the following controls was lacking?

  A. Corrective control.

  B. Preventive control.

  C. Detective control.

  D. Directive control.

  Correct Answer: A

• Question 89:

  The last quality assessment of the internal audit activity identified three areas for improvement: the achievement of audit engagement objectives, quality of work, and staff development. According to IIA guidance, which of the following should be the chief audit executive's primary focus to achieve these recommended improvements?

  A. Demonstrated compliance with procedures.

  B. Due professional care.

  C. Engagement supervision.

  D. Employment of tools and techniques.

  Correct Answer: C

• Question 90:

  Which of the following statements describes a control failure that is not directly attributable to a customer billing application?

  1.

  End users have raised a number of concerns regarding data integrity.

  2.

  An untested program change is transferred from the test environment to production.

  3.

  Purchase history does not reconcile with accounts receivable for some customers.

  4.

  End user security is inadvertently granted to an unauthorized individual by management.

  A. 1 and 3.

  B. 1 and 4.

  C. 2 and 3.

  D. 2 and 4.

  Correct Answer: D