NEW 2023 Certification Sample Questions IIA-CIA-Part1 Dumps & Practice Exam
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NEW QUESTION # 125
Which of the following is the primary concern of an internal auditor in a comprehensive audit of an organization?
- A. Appropriateness of procedures related to the budgeting process.
- B. Extent of achievement of the organization's mission.
- C. Confirmation of compliance with policies and procedures.
- D. Accuracy of reports on the source and use of funds.
Answer: B
NEW QUESTION # 126
Which of the following internal control components has COSO identified as the most important?
- A. Control environment
- B. Control activities
- C. Risk assessment
- D. Information and communication
Answer: A
NEW QUESTION # 127
A government agency's policy states that board members' travel and hospitality expenses must be audited annually. Which of following people or groups is most appropriate to perform this audit?
- A. The government's independent auditor.
- B. The internal audit activity.
- C. The agency's chief compliance officer.
- D. The external auditors from an accounting firm.
Answer: A
Explanation:
Section: Volume E
Explanation/Reference:
NEW QUESTION # 128
During an audit engagement, a junior staff internal auditor begins to suspect a fraud may have occurred involving a friend of the engagement supervisor. He reports his concerns to the engagement supervisor, who disagrees with his suspicions and directs him to continue with the engagement as planned. Given the circumstance, what is the most appropriate action for the junior auditor to take?
- A. Report the suspected fraud to law enforcement officials and seek financial restitution.
- B. Continue with the engagement as planned, per the more senior auditor.
- C. Document in the workpapers and expand testing.
- D. Escalate the concern to the chief audit executive.
Answer: D
NEW QUESTION # 129
A former line supervisor from the Financial Services Department has completed six months of a two-year development opportunity with the internal audit activity (IAA). She is assigned to a team that will audit the organization's payroll function,which is managed by the Human Resources Department. Which of the following statements is most relevant regarding her independence and objectivity with respect to the payroll audit?
- A. She may participate,because she did not previously work in the Human Resources Department.
- B. She may participate for training purposes,to build her knowledge of the IAA.
- C. She may participate,but she must be supervised by the auditor in charge.
- D. She may participate,but only after she has completed one year with the IA
Answer: A
NEW QUESTION # 130
Which of the following would be most relevant regarding the internal control environment?
- A. Assessing controls over computerized applications.
- B. Documenting the organizational structure.
- C. Comparing and validating internal performance with external benchmarking.
- D. Maintaining and reviewing detailed financial records.
Answer: B
Explanation:
Section: Volume B
NEW QUESTION # 131
To assure that the technical proficiency of internal auditors is appropriate for the audit engagements to be performed, a chief audit executive should:
- A. Require all of the audit staff to pursue a minimum number of continuing professional education hours each year.
- B. Ensure that each newly hired auditor is qualified in all of the disciplines needed to accomplish the department's audit mission.
- C. Consider the scope of work and level of responsibility when establishing criteria for education and experience in filling internal auditing positions.
- D. Oversee a training program that matches the actual training provided with the interests of individual auditors.
Answer: C
NEW QUESTION # 132
The work papers for an audit of hazardous-materials handling and disposal at an engineering research facility provide evidence that the following procedures were performed.
-Drums of hazardous waste not yet shipped off-site were inventoried. The physical count agreed with the company's inventory records. -A sample of hazardous-waste shipments received at the disposal site was compared to bills of lading and company records. No errors were detected. -The audit staff observed engineering personnel during the handling of hazardous materials. No company policy violations were noted.
The reconciliation of waste drums to the inventory records provides evidence that:
- A. Hazardous-waste materials were being disposed of as prescribed by company policy.
- B. The amount of hazardous materials being used was accurately recorded.
- C. Records of drums shipped to the waste disposal site were being maintained.
- D. All hazardous-waste drums in inventory were accounted for.
Answer: D
NEW QUESTION # 133
An internal auditor for a large bank is reviewing the collectability of a loan that is secured by real property.
The best evidence of the loan's collectability would be:
- A. A properly completed and signed loan application form.
- B. The borrower's confirmation of the loan balance.
- C. A document showing the loan committee's approval of the loan.
- D. A recent independent appraisal of the value of the real property.
Answer: D
NEW QUESTION # 134
As part of a fraud investigation by regulators, a court order was issued to a bank. The court order requested the chief audit executive (CAE) to provide access to a number of audit reports and workpapers, some of which included customers' confidential information such as transaction activity and other personal details. What is the appropriate response by the CAE?
- A. Respond promptly and provide all that was requested by the court order.
- B. Seek permission from customers prior to sharing their information.
- C. Reject the court order, citing a potential breach of customers' confidentiality agreement
- D. Consult with legal counsel to determine what information to provide.
Answer: A
NEW QUESTION # 135
A company produces a product that consists of materials X, Y, and Z.
The product is mixed so that:
- The quantity of material X used is one-third more than that of material Y.
- The quantity of material Y used is one-fourth less than that of material Z.
If the company used 24,000 units of material Z during a period, what is a reasonable estimate of the amount of material X used?
- A. 32,000
- B. 18,000
- C. 8,000
- D. 24,000
Answer: D
NEW QUESTION # 136
Which of the following best describes the assessment of risks?
- A. Assess the likelihood and/or impact of risk on the achievement of organizational objectives.
- B. Assess the actions necessary to reduce the likelihood and/or impact of risk to tolerable levels.
- C. Assess alternative strategies to reduce or eliminate major risks.
- D. Assess the amount of risk an organization can accept while pursuing its objectives.
Answer: A
NEW QUESTION # 137
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. The organization is not taking advantage of quantity discounts available from its suppliers.
- B. Payments for goods received have not been authorized at the appropriate level.
- C. Purchasing policies have not been updated.
- D. Payments to suppliers are made before goods are received.
Answer: D
NEW QUESTION # 138
An auditor for a large wholesaler is evaluating the controls over the approval and oversight of credit sales. Which of the following procedures would be a control weakness?
- A. The finance committee of the board of directors periodically reviews credit standards.
- B. The credit department is responsible for approving shipments to all customers.
- C. Customers who fail to meet credit requirements must pay cash for shipments upon delivery.
- D. The sales department is responsible for determining the credit ratings of customers.
Answer: D
NEW QUESTION # 139
To encourage internal audit objectivity, which of the following is an appropriate policy the chief audit executive should establish?
- A. Prior to hiring a new internal auditor, the chief audit executive must determine whether the auditor owns stock in the organization.
- B. Internal auditors are permitted to audit an entity managed by a close friend or relative, as long as they notify the chief audit executive.
- C. Internal auditors should report their audit findings directly to the audit committee.
- D. To receive an outstanding performance rating, internal auditors are required to generate audit findings.
Answer: A
NEW QUESTION # 140
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