Ultimate Guide to Prepare Free IIA IIA-CIA-Part1 Exam Questions and Answer
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IIA-CIA-Part1 certification exam covers a wide range of topics related to internal auditing, including the role of internal auditors, risk management, governance, and internal control systems. It requires candidates to demonstrate their ability to identify and assess risks, evaluate internal controls, and communicate effectively with stakeholders.
NEW QUESTION # 351
According to IIA guidance, which of the following best describes acceptable methods for internal auditors to obtain qualified continuing professional education hours?
- A. Volunteering in relevant professional organizations, formal education, and tutoring college students.
- B. Volunteering in relevant professional organizations, formal education, and online training courses.
- C. Formal education, on-line training courses, and tutoring college students.
- D. Volunteering in relevant professional organizations, on-line training courses, and tutoring college students.
Answer: B
NEW QUESTION # 352
The internal audit activity is performing an assessment of an organization's ethics program, and the engagement scope specifies a focus on the training program's design. According to IIA guidance, which of the following questions would be the most relevant?
1. Does the training include situations that require an ethical decision?
2. What percentage of employees have taken the training?
3. What are the results of the employee assessment of the organization's ethical climate?
4. Does the instructor provide feedback on the thought process to reach an ethical resolution?
- A. 1 and 2.
- B. 1 and 4.
- C. 2 and 3.
- D. 3 and 4.
Answer: B
Explanation:
In assessing the design of a training program for an organization's ethics program, the most relevant questions would be those that address the content of the training and the feedback mechanism used to foster ethical decision-making. Questions 1 and 4 directly relate to these aspects, examining if the training includes ethical decision-making scenarios and if there is feedback on the thought processes involved, which are critical for effective ethics training.
IIA guidance on auditing ethics programs, focusing on the effectiveness and design of training components.
NEW QUESTION # 353
Non-statistical sampling does not require which of the following?
- A. A smaller sample size than if selected using statistical sampling.
- B. The sample to be selected haphazardly.
- C. Projecting the results to the population.
- D. The sample to be representative of the population.
Answer: A
NEW QUESTION # 354
Which of the following represents an example of an ethical issue that the organization should address'?
- A. A supervisor insists that an employee complete time sheets regularly
- B. An employee discovered that there is no personal protective equipment at a temporary construction site
- C. An employee saw that a group of other employees were smoking in close proximity to petrol distribution tanks
- D. An employee received concert tickets from a vendor and asked whether she could keep them
Answer: D
Explanation:
An example of an ethical issue that the organization should address is when an employee receives concert tickets from a vendor and asks whether she could keep them. This situation involves potential conflicts of interest and could influence the employee's objectivity and decision-making in relation to the vendor, which is a direct ethical concern.
The IIA's Code of Ethics, particularly sections dealing with gifts and hospitality.
NEW QUESTION # 355
According to the IIA guidance, who is responsible for periodically assessing the internal audit activity?
- A. The external auditors.
- B. Senior management.
- C. The board.
- D. The chief audit executive.
Answer: D
Explanation:
Section: Volume E
NEW QUESTION # 356
According to IIA guidance, which of the following best describes how risks are measured?
- A. Velocity and rate of occurrence.
- B. Impact and relevance.
- C. Likelihood and probability.
- D. Likelihood and impact.
Answer: D
NEW QUESTION # 357
A code of business conduct provides?
- A. A program to anonymously report irregularities to authorities.
- B. A passive method of fraud deterrence.
- C. A fraud avoidance plan that does not explicitly describe punishments for violations.
- D. An alternative to "tone at the top" programs.
Answer: B
Explanation:
Section: Volume A
NEW QUESTION # 358
Which action by senior management indicates to the internal auditor that there may be fraudulent activities occurring within the organization?
- A. Automating some processes and allowing others to be performed manually
- B. Setting unrealistic targets for staff to achieve
- C. Granting external audit firms access to staff and records.
- D. Enforcing a zero-tolerance policy for misconduct
Answer: B
Explanation:
Setting unrealistic targets for staff to achieve is a potential red flag indicating that there may be fraudulent activities occurring within the organization. When senior management sets targets that are unattainable, it can create pressure on employees to engage in unethical or fraudulent behavior to meet these goals. This is one of the elements of the fraud triangle (pressure, opportunity, and rationalization) that can lead to fraudulent activities.
References:
* IIA Practice Guide: Fraud and Internal Audit
* COSO Fraud Risk Management Guide
NEW QUESTION # 359
An internal audit activity uses a rotational program to recruit high-performing staff members from other parts of the organization One of these individuals is nearing the end of her four-year internal audit rotation The chief audit executive assigned her to an assurance engagement in the business area she will be going into when she leaves the internal audit activity Which of the following statements is true regarding this scenario?
- A. Accepting the assignment on the assurance engagement would be a breach of due professional care
- B. Accepting the assignment is a violation of internal audit independence
- C. Accepting the assignment creates the appearance of an impairment to her professional judgment and detectivity
- D. Accepting the assignment will improve competencies and develop relationships that will be needed in her next assignment
Answer: C
Explanation:
Accepting the assignment creates the appearance of an impairment to her professional judgment and objectivity. This is because the individual is auditing an area where she will soon work, which could potentially influence her audit work, either consciously or unconsciously, due to personal interest in the future role.References: IIA Standards on Independence and Objectivity
NEW QUESTION # 360
Management of a publicly-held organization requires the internal audit activity to be involved with quarterly financial statements, which are made public and used internally. Which of the following explanations of management's decision is least plausible?
- A. Management may perceive that having quarterly financial information examined by the internal auditors enhances the information's value to internal decision
- B. Management is following best-practice protocol, as stipulated by the Standards, which states that internal auditors must review quarterly financial statements.
- C. Management may be concerned about its reputation in the financial markets.
- D. Management may be concerned about potential penalties that could occur if quarterly financial statements are misstated.
Answer: B
NEW QUESTION # 361
To identify those components of a telecommunications system that present the greatest risk, an internal auditor should first:
- A. Identify the network operating costs.
- B. Map the network software and hardware products into their respective layers.
- C. Review the open systems interconnect network model.
- D. Determine the business purpose of the network.
Answer: D
NEW QUESTION # 362
An internal auditor is assessing how the organization processes financial transactions and whether written policies and procedures are followed. The auditor requested to meet with certain employees to understand their related roles and responsibilities. However the employees refuse to meet with the auditor claiming they are too busy. Which of the following responses would best demonstrate the auditor's conflict-resolution skills?
- A. The auditor meets with senior management of the organization to discuss the employees' behavior and possible resolutions that would satisfy all parties
- B. The auditor considers other options to determine whether the employees are processing financial transactions as required by the organization
- C. The auditor considers the employees to be unresponsive and proceeds to document the actions and concerns as a scope limitation that can affect the engagement
- D. The auditor meets with the department supervisor and staff to discuss the employees' actions in order to obtain an understands and potential resolution
Answer: C
NEW QUESTION # 363
Senior management and the board have expressed concerns about the length of engagements and whether their outcome aligns with the organization's strategies and objectives. Which of the following actions, if taken by the chief audit executive, could address these concerns?
- A. Implementing the use of agile auditing during engagements to meet expectations.
- B. Communicating to internal audit staff instructions for completing engagements within shorter time periods.
- C. Encouraging internal audit staff to participate in workshops to further develop their understanding of the organization's strategies.
- D. Requesting additional funding from the board to train internal audit staff on time and resource management.
Answer: A
Explanation:
Implementing the use of agile auditing during engagements can address concerns about the length of engagements and alignment with organizational strategies and objectives. Agile auditing focuses on iterative planning and execution, allowing for more flexible and responsive audit processes. It enhances collaboration, efficiency, and the ability to adapt to changes in the organization's priorities. This approach can help internal audit activities deliver timely and relevant audit results that align with the organization's strategic goals.
References:
* The IIA's Practice Guide on Agile Auditing.
* Articles from the Internal Auditor magazine on Agile Auditing.
NEW QUESTION # 364
An organization has implemented a new automated payroll system that contains a table of pay rates that are matched to employee job classifications. Which control should an internal auditor suggest in order to ensure that the table is updated correctly, and is used only for valid pay changes?
- A. Require a manager, who is independent of the system and who cannot change the table, to authorize and sign-off on any employee pay changes.
- B. Restrict data-table access from management and line supervisors who have the authority to determine pay rates.
- C. Require a supervisor in the department, who has the ability to change the table, to compare the changes to a signed management authorization.
- D. Ensure that adequate edit and reasonableness checks are built into the automated system.
Answer: A
Explanation:
Section: Volume E
NEW QUESTION # 365
Company A has a formal comprehensive corporate code of ethics while company B does not. Which of the following statements regarding the existence of the code of ethics in company A can be logically inferred?
1. Company A exhibits a higher standard of ethical behavior than does company B.
2. Company A has established objective criteria by which an employee's actions can be evaluated.
3. The absence of a formal corporate code of ethics in company B would prevent a successful audit of ethical behavior in that company.
- A. 2 and 3 only
- B. 1 and 2 only
- C. 2 only
- D. 3 only
Answer: C
NEW QUESTION # 366
Which of the following characteristics is typical of the internal audit activity?
- A. Is completely independent of senior management, the board and the area under review
- B. Serves third parties that need reliable financial information from audit engagements
- C. Responds to the needs and desires of senior management and the board, but remains independent of areas under review
- D. Ensures the organization complies with laws and regulations in the area under review
Answer: C
Explanation:
A characteristic typical of the internal audit activity is that it responds to the needs and desires of senior management and the board, but remains independent of the areas under review. This ensures that while internal audit activities are aligned with the strategic priorities of the organization, they maintain an unbiased stance that is critical for effectively assessing risk and control processes.References: IIA's International Standards for the Professional Practice of Internal Auditing.
NEW QUESTION # 367
During an audit of an organization's accounts payable area, an internal auditor identified anomalies in the information examined that may indicate potential fraud. Which test should the auditor perform first to verify this?
- A. Analyze all transactions within the targeted area.
- B. Identify duplicated organizational transactions.
- C. Verify the completeness and integrity of the data being analyzed.
- D. Check control totals that have may have been falsified.
Answer: C
NEW QUESTION # 368
Which of the following statements is true regarding organizational culture and an audit of the control environment?
- A. For multinational organizations it is important to ensure that the organizational culture is consistent at all locations
- B. If there are unresolved scope restrictions, the CAE should consider whether to pursue the audit and note the scope restrictions in the audit report
- C. Because it will create a conflict of interest relating to the control environment, senior management should not be consulted during the audit
- D. Because the chief audit executive (CAE) is part of the organizational culture, external auditors should be engaged to evaluate the control environment
Answer: B
Explanation:
If there are unresolved scope restrictions, the chief audit executive (CAE) should consider whether to pursue the audit and note the scope restrictions in the audit report. This is important because scope restrictions can limit the audit's ability to fully assess the control environment, and documenting these limitations helps ensure that the audit report reflects the extent to which the auditor was able to evaluate the control environment.References: The IIA's International Standards for the Professional Practice of Internal Auditing regarding scope limitations and reporting.
NEW QUESTION # 369
Which of the following documents most directly describes the guidelines for and importance of the objectivity of internal auditors?
- A. Internal audit quality assessments.
- B. Internal audit charter.
- C. Internal audit plan.
- D. Internal audit reporting.
Answer: B
Explanation:
The internal audit charter outlines the internal audit function's objectives, independence, and scope. IIA guidance specifies the charter as the foundational document defining the internal audit activity's objectivity and position within the organization.
NEW QUESTION # 370
According to IIA guidance, which of the following statements is true regarding mentoring programs designed to assist internal auditors with their professional development?
- A. The mentor must have a higher position in the organization than the mentee
- B. Meetings between a mentor and a mentee should be formal and well documented
- C. An auditor s supervisor is best positioned to serve as the auditor's mentor
- D. Auditors at the same level may be assigned different mentors and some auditors may have no mentor
Answer: D
Explanation:
According to IIA guidance on mentoring programs, there is no requirement for a mentor to be in a higher organizational position than the mentee. The focus is on the value of diverse mentoring relationships, which can include auditors at the same level having different mentors or some auditors having no mentor at all. This approach allows for flexibility in the mentoring process and ensures that professional development needs are met effectively without strict hierarchical constraints.References: The Institute of Internal Auditors (IIA) - Guidance on mentoring programs
NEW QUESTION # 371
Which aspect of an internal audit charter relates to the reporting structure for the internal audit activity?
- A. Authority.
- B. Objectivity.
- C. Responsibility.
- D. Organization.
Answer: D
Explanation:
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 Audit4
NEW QUESTION # 372
Which of the following does not need to be defined in the internal audit charter?
- A. Management and the board of directors' agreement regarding the roles and responsibilities of the internal audit activity.
- B. The internal audit activity's position within the organization.
- C. The scope of internal audit activities.
- D. The audit engagements to be performed during the upcoming year.
Answer: D
NEW QUESTION # 373
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Prerequisites of IIA-CIA-Part1 Exam
if you don't have a bachelor's degree, you can still take the CIA, which offers you to meet BETWEEN the following standards:
- 3 levels A or higher or comparable (plus two years of internal audit experience) ACCA credentials.
- 4 years of experience in internal audit (plus a second training and apprenticeship).
- IIA Global will definitely need to see evidence of your training and learning when you enroll, such as duplicates of your A-level or GCSE certificates/achievements. If you cannot provide this proof later, you will not be able to register.
Before you can earn CIA classification, you must also have some internal audit experience or a relevant role. You must adhere to the following:
- Seven years of experience (plus additional training).
- Level A or comparable and five years of experience.
- A diploma and 2 years of experience.
IIA-CIA-Part1 (Essentials of Internal Auditing) Certification Exam is an essential certification for individuals who are interested in pursuing a career in the field of internal auditing. IIA-CIA-Part1 exam is designed to test the knowledge and skills of candidates in areas such as internal control, risk management, and governance.
Online Exam Practice Tests with detailed explanations!: https://passleader.free4dump.com/IIA-CIA-Part1-real-dump.html