➱Vendor: IIA
➱Exam Code: IIA-CIA-Part1
➱Exam Name: Essentials of Internal Auditing
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NEW QUESTION # 95
An engagement supervisor noted that an internal auditor's personal relationship with a process owner resulted in the auditor providing a favorable and partial assessment during an audit within that process owner's are a. According to MA guidance, which of the following should be used to manage this impairment?
A. An employee disciplinary policy.
B. An internal audit charter.
C. A functional audit committee.
D. A functional reporting placement.
Answer: B
NEW QUESTION # 96
While conducting fieldwork, an internal auditor decides to utilize standard operating procedure (SOP) questionnaires to gather information about a human resources department. Which of the following is an advantage of this method?
A. SOP questionnaires generally do not need to be cleared by management of the audited department.
B. SOP questionnaires are useful in identifying discrepancies and educating clients.
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C. SOP questionnaires verify that a department is efficient and effective.
D. SOP questionnaires are the most comprehensive technique for data gathering in fieldwork.
Answer: B
Explanation:
Section: Volume D
NEW QUESTION # 97
Which of the following techniques would best assist an internal auditor in evaluating the efficiency of a wholesale grocery distributor`s process to fill and package orders for shipping?
A. Queuing theory to assess potential bottlenecks in the process.
B. A program evaluation and review technique chart.
C. A Bedford analysis of orders filled to average delivery times.
D. Decision trees rating actual performance against requirements.
Answer: A
Explanation:
Section: Volume E
NEW QUESTION # 98
Which of the following steps would not be included in a program of selecting and developing human resources for an internal audit department?
A. Establishing an internal review team to assess the auditors' and audit department's compliance with standards, level of audit effectiveness, and compliance with departmental policy.
B. Establishing in-house training programs and requiring continuing education for audit staff.
C. Developing specific job descriptions for audit staff, audit managers, and other auditing positions.
D. Scheduling periodic meetings with individual auditors, during which the chief audit executive provides counsel regarding each auditor's performance and professional career development.
Answer: A
NEW QUESTION # 99
An organization that outsources much of its internal audit work to an external service provider is planning for an external quality assessment. Which of the following options would accomplish this task and be in conformance with the Standards?
A. A team from an independent entity that previously employed the chief audit executive of the organization.
B. A team under the direction of the organization's chief audit executive with validation by a former manager of the internal audit activity.
C. External industry associate that performed a similar review for a supplier of the organization.
D. The same external service provider because of its competency and experience with the organization.
Answer: C
NEW QUESTION # 100
According to the International Professional Practices Framework, risk is:
I. Defined as the negative effect of events that are expected to occur.
II. Measured in terms of consequences.
III. Measured in terms of likelihood.
A. I only
B. I, II, and III.
C. II and III only
D. I and II only
Answer: C
NEW QUESTION # 101
Six months after an employee was transferred to the internal audit activity his former operating manager requested that he return to assist a project team with the evaluation of a new pricing module for the organization's online ordering system According to IIA guidance which of the following statements is true?
A. Another internal auditor should be appointed to the engagement to preserve the independence of the internal audit activity
B. The auditor cannot participate in the assignment, as providing an opinion would impair his objectivity
C. The auditor may participate on the project, as the nature of the assignment is consulting
D. The auditor cannot be assigned to this project, as it has been fewer than 12 months since he was transferred from that department.
Answer: C
NEW QUESTION # 102
Which of the following best describes the internal audit activity's contribution to the implementation of the risk management framework?
A. Internal audit participates in setting the risk appetite.
B. Internal audit assists with the prioritization of identified risks.
C. Internal audit takes part in the design of risk mitigation measures.
D. Internal audit identifies key risk areas during assurance reviews and provides audit findings.
Answer: D
NEW QUESTION # 103
Management of an area under review is aggressive, upset, and questioning the knowledge and experience of the organization's internal auditors, as the audit results highlight critical findings. The relationship between the internal audit activity and management has continued to degenerate. as previous audit reports also showed a large number of issues. What would be the best strategy for working through the current audit results while also attempting to repair the relationship with management?
A. Take a compromising approach by modifying the tone of the report, while maintaining the critical findings.
B. Take an assisting approach and offer to assist with the implementation of action plans.
C. Take an accommodating approach and change the overall rating of the audit report.
D. Take an assertive approach and be persistent in attempting to convince the director.
Answer: D
NEW QUESTION # 104
The top three sales representatives for a company consistently include non-allowable charges on their expense reports. Line management is reluctant to deny reimbursement of the charges for fear of losing the sales representatives. This situation has the greatest negative impact on which of the following internal control components?
A. Control environment.
B. Control activities.
C. Information and communication.
D. Monitoring.
Answer: A
NEW QUESTION # 105
When would on-the-job training be more effective?
A. When it makes up the largest part of the training budget.
B. When it is standardized for the whole entire staff.
C. When it includes ongoing feedback and coaching from experienced team members.
D. When participants already have a certain degree of experience and knowledge.
Answer: C
NEW QUESTION # 106
According to the Standards, which of the following statements best describes the required content of the chief audit executive's (CAE) report to senior management and the board on the internal audit activity (IAA)?
A. The CAE must report on quality assurance techniques, statistical analysis methods, and other analytical processes used.
B. The CAE must report on significant risk exposures, control issues, and governance issues.
C. The CAE must report on policies, procedures, and best practices of the IAA.
D. The CAE must report on auditors' continuing education activities, staffing changes, and any outsourcing to external parties.
Answer: B
NEW QUESTION # 107
Which of the following statements accurately describes an internal auditor's responsibility with regard to due professional care?
A. An internal auditor's opinion should be based on factual evidence.
B. An internal auditor should express an opinion only when consensus with top management has been achieved.
C. An internal auditor's opinion should be limited to the effectiveness of internal controls.
D. An internal auditor's opinion should be based on experience and free of all bias.
Answer: A
NEW QUESTION # 108
When internal auditors perform consulting services that add value and improve an organization's operations, these services:
A. Impair the internal auditors' objectivity with respect to an assurance service involving the same engagement client.
B. Impose no responsibility to communicate information other than to the engagement client.
C. Would preclude the achievement of assurance from the consulting engagement.
D. Should be consistent with the internal audit activity's empowerment reflected in the charter.
Answer: D
NEW QUESTION # 109
In the annual audit of the financial statements of a company with high inherent risk and a very strong
control system, the external auditor may be able to allow detection risk to rise because:
A. Control risk has been assessed at a lower level.
B. Audit risk has been reduced.
C. Whenever inherent risk is high, control risk is disregarded.
D. The company's operations are very susceptible to misstatements.
Answer: A
NEW QUESTION # 110
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