IIA-CIA-Part1 Tested & Approved Certified Internal Study Materials [Q417-Q432]

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IIA-CIA-Part1 Tested & Approved Certified Internal Study Materials

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QUESTION 417
The manager of the payroll department requested a review of the payroll process, but only wants the engagement to include processes related to approval of time worked. What type of activity is this?

Financial assurance engagement.

Operational consulting engagement.

Compliance assurance engagement.

Risk management consulting engagement.

QUESTION 418
Which of the following fraud prevention measures is most likely to trigger undesired adverse behavior if improperly designed?

Disclosure of outside business activities

Ethics training programs

Compensation programs

Exit interviews

QUESTION 419
Which of the following are appropriate ways to obtain continuous professional education?
Instructing at a local IIA training event.
Attending internal audit conferences and seminars.
Practicing specialized audit and consulting work.
Participating in research projects in internal auditing.

1 and 3 only.

1 and 2 only.
—-

3 and 4 only.

1, 2, and 4 only.

QUESTION 420
According to The IIA’s Competency Framework, which competency is considered the mandatory minimum for internal auditors to possess when performing internal audit engagements?

To recognize red flags that indicate fraud.

To recommend controls to prevent fraud.

To apply forensic auditing techniques to detect fraud.

To evaluate the potential for fraud.

QUESTION 421
Which of the following procedures will best help an internal auditor assess operating effectiveness of fraud prevention and detection controls?

Benchmarking best practices

Testing,

Mapping,

Interviewing

QUESTION 422
Management has requested that an internal auditor serve as member of a task force that will review current receivables practices and make recommendations to improve processes. Which of the following is the most appropriate response by the internal auditor?

Accept the assignment provided that such consulting services are defined in the charter.

Decline the assignment because participation on task forces will impair the auditor’s objectivity in future audit engagements.

Accept the assignment if the auditor believes that it will not impair objectivity in future audit engagements.

Do not accept the assignment because the assignment is not part of an approved audit plan.

QUESTION 423
The chief audit executive (CAE) has hired a new internal auditor who was immediately assigned to a procurement function audit. Because the new auditor’s name is similar to that of the procurement manager, some staff members think the two are related, although they are not. Which of the following actions is most appropriate for the CAE to take?

Take no action, as there is no impairment to independence.

Remove the new internal auditor from the engagement team.

Discuss the matter with the appropriate personnel to alleviate concerns.

Closely supervise the new auditor and carefully review his work.

QUESTION 424
Which of the following statements is not true?

The nature of consulting services that are performed by the internal audit activity should be defined in the audit charter.

It is inappropriate for internal auditors to provide consulting services relating to operations for which they had previous responsibilities.

A party outside the internal audit activity should oversee assurance engagements for functions over which the chief audit executive has responsibility.

The chief audit executive should decline a consulting engagement if the internal audit staff lacks the knowledge, skills, or other competencies needed to perform all or a part of the engagement.

QUESTION 425
Which aspect of an internal audit charter relates to the reporting structure for the internal audit activity?

Objectivity.

Responsibility.

Organization.

Authority.

The organization aspect of an internal audit charter relates to the reporting structure for the internal audit activity. It establishes the position of the internal audit activity within the organization, and defines its functional and administrative reporting lines2. The organization aspect also ensures that the internal audit activity has sufficient independence and authority to perform its work effectively and objectively3.
References:
1: Internal Audit Charter [A Complete Guide + Template] – ModelOrganization2
2: The Internal Audit Charter IIA POSITION PAPER
The Internal Audit Charter Blueprint to Assurance Success Introduction One of the great challenges every organization faces is assuring efficient and effective risk management those policies and processes designed to leverage or mitigate risks to the organization’s advantage. When done well, internal audit provides that assurance as part of its role to protect and enhance organizational value. For internal audit to operate at the highest levels, it must have clearly defined and articulated marching orders from the governing body and management. This is most easily achieved with a well-designed internal audit charter. The IIA’s Perspective Every organization can benefit from internal audit, and an internal audit charter is vital to success of the activity (IIA Standard 1000). The charter is a formal document approved by the governing body and/or audit committee (governing body) and agreed to by management. It must define, at minimum: Internal audit’s purpose within the organization. Internal audit’s authority. Internal audit’s responsibility. Internal audit’s position within the organization. The IIA has produced model charters available to IIA members here in eight languages. Why the Internal Audit Charter Is Important The charter provides the organization a blueprint for how internal audit will operate and helps the governing body to clearly signal the value it places on internal audit’s independence. Ideally it establishes reporting lines for the chief audit executive (CAE) that support that independence by reporting functionally to the governing body (or those charged with governance) and administratively to executive management. It also provides the activity the needed authority to achieve its tasks, e.g., unfettered access to records, personnel, and physical properties relevant to performing its work.
KEY TAKEAWAYS The internal audit charter is vital to internal audit’s success and should be reviewed annually by the governing body. The internal audit charter should be approved by the governing body and agreed to by senior management.
The charter should at a minimum include internal audit’s purpose and mission, authority, responsibility, its independent reporting relationships, scope and requirement to conform to IIA Standards. The internal audit charter should include details of how the internal audit activity will assess and report on the quality of the internal audit activity.1 3: Charter | Internal Audit

QUESTION 426
The internal auditor obtained large volumes of transaction history data for accounts on which he suspected that some fraudulent transactions occurred. Which of the following actions best demonstrates due professional care by the internal auditor?

The internal auditor carefully scrutinized the data by manually reviewing each transaction to ensure that all irregularities were identified.

The internal auditor employed the use of data analytics tools to sort, analyze, and detect anomalies in the data

The internal auditor started the data analysis process by selecting a random sample of transactions on which to perform further tests.

The internal auditor requested that the branch supervisor assist in identifying fraudulent transactions, as he was most familiar with the accounts being audited.

QUESTION 427
An internal auditor prepared a workpaper that consisted of a list of employee names and identification numbers as well as the following statement:
– “A statistical sample of 40 employee personnel files was selected to verify that they contain all documents required by company policy 501 (copy attached). No exceptions were noted.”
– The auditor did not place any audit verification symbols on this workpaper.
Which of the following changes would most improve the auditor’s workpaper?

Use of audit verification symbols to show that each file was examined.

Removal of the employee names to protect their confidentiality.

Justification for the sample size.

Listing of the actual documents examined for each employee.

QUESTION 428
An internal auditor plans to use an analytical review to verify the correctness of various operating expenses in a division. The use of an analytical review as a verification technique would not be a preferred approach if:

The auditor notes strong indicators of a specific fraud involving this account.

The company has relatively stable operations which have not changed much over the past year.

The auditor would like to identify large, unusual, or non-recurring transactions during the year.

The operating expenses vary in relation to other operating expenses, but not in relation to revenue.

QUESTION 429
Which of the following situations would cause the greatest concern regarding impairment of internal audit objectivity?

The eternal auditor reviewed the audit clients proposed procedures and standards of control and offered suggested improvements at the client’s request.

The internal auditor performed nonaudit work for the audit client which was communicated to senior management and the board before the engagement was performed and restated in the audit report

internal auditors accepted limited access to the audit client’s systems and records m accordance with the scope of the engagement

The internal auditor used his in-depth knowledge of systems development to assist the audit client m designing a new operational system with robust controls.

QUESTION 430
With regard to external assessments of an internal audit activity (IAA), which of the following is the chief audit executive required to discuss with the board?

External reviewer conflicts of interest, and the need for an external assessment more frequently than once every five years.

External reviewer conflicts of interest, and the timeline of the external assessment.

The need for an external assessment more frequently than once every five years, and the simplest method for the external reviewer to join the IAA’s organization.

The simplest way for the external reviewer to join the IAA’s organization, and the timeline of the external assessment.

QUESTION 431
During engagement planning, the engagement supervisor recommended that the amount of time originally budgeted for the engagement should be expanded due to the engagement’s complexity and materiality. This scenario is an example of which of the following?

A lack of audit competency.

Internal audit objectivity.

Proper engagement supervision.

Due professional care.

QUESTION 432
Reviewing prior audit reports and supporting workpapers before an engagement starts
enables an internal auditor to do which of the following?
1.To understand better the activity and processes that will be audited.
2.To identify the audit procedures that will be used during the engagement.
3.To ensure that matters of greatest vulnerability will be addressed.
4.To use the information obtained as evidence in the current engagement.

4only

1 and 3only

1 and 4only

2,3,and 4only