IIA-CIA-Part1 sample questions

Question 1

A senior manager asks the chief audit executive (CAE) to explain why statistical sampling is the best method to use in conducting an internal audit. Which advantages should the CAE point to in order to justify the internal audit activity's (IAA) use of statistical sampling?

Accepted Answer

statistical sampling allows for the selection of a minimum sample size,provides a quantitative expression of the lAA's sampling results,and supports extrapolation.

Answer

statistical sampling sets limits on resources used for the IAA, allows for a subjective interpretation of the lAA's sampling results,and supports The Institute of Internal Auditors' requirements for using questionnaires as a sampling tool.

Answer

statistical sampling allows for evaluation of all organizational data at once,increases the likelihood that risks are immediately identified,and does not require a level of tolerable misstatement or margin of error.

Answer

Statistical sampling itself identifies root causes of issues,utilizes a qualitative method for analyzing results,and supports engagement objectives through the use of external benchmarking.

Question 2

Risk within an internal audit engagement is defined as the:

Accepted Answer

Uncertainty of an event occurring that could have an impact on the achievement of objectives.

Answer

Probability that a balance or class of transactions and related assertions contain misstatements that could be material to the financial statements.

Answer

Failure to a dhere to organizational policies,plans,and procedures,or the failure to comply with relevant laws and regulations.

Answer

Failure to a ccomplish established objectives and goals for operations or programs.

Question 3

Using the internal audit department to coordinate regulatory examiners' efforts is beneficial to the organization because internal auditors can:

Accepted Answer

Supply evidence of adequate compliance testing through internal audit workpapers and reports.

Answer

Influence regulatory interpretation of law to better match corporate practice.

Answer

Recommend changes to the scope of the regulatory examiners' review.

Answer

Perform fieldwork for the regulatory examiners and thus shorten the regulatory examiners' review.

Question 4

In which of the following scenarios would a customer service hotline receive a high volume of complaints regarding payments not being applied to customers’ accounts?

Accepted Answer

An employee is tampering with customer checks.

Answer

Invoices are not being mailed to customers.

Answer

Employees are submitting fraudulent expense reports.

Answer

The customer service department is not forwarding complaints to the accounts receivable department.

Question 5

What information should the internal quality assessment of the internal audit activity communicate to the chief audit executive?

Accepted Answer

Evaluation of the adequacy of internal audit policies and procedures.

Answer

Detailed objectives for internal audit engagements.

Answer

Confirmation that past audit recommendations have been implemented.

Answer

Performance appraisals of the internal audit staff.

Question 6

Which of the following factors related to a n organization's performance management system would not contribute to the organization's success?

Accepted Answer

staff members own the performance management process,thereby ensuring implementation and accountability.

Answer

Performance management is linked to competence and knowledge management.

Answer

Subordinates and superiors have shared responsibility for the performance management process.

Answer

Performance management is integrated into other organizational processes and human resource processes.

Question 7

In a well-developed management environment, the internal audit activity would.

Accepted Answer

Report the results of audit engagements to line management as well as to senior management.

Answer

Conduct regularly scheduled audits of existing systems and initial audits of new computer systems after they have begun operating.

Answer

Interface primarily with senior management,minimizing interactions with line managers whA. re the subjects of internal audit work.

Answer

Focus on the maintenance of accounting controls (such as segregation of the duties of authorization,recording,and custody) and report results to the audit committee.

Question 8

According to the IIA guidance, who is responsible for periodically assessing the internal audit activity?

Accepted Answer

The chief audit executive.

Answer

The board.

Answer

Senior management.

Answer

The external auditors.

Question 9

Which of the following would provide the best guidance to a chief audit executive who is setting internal audit staff requirements?

Accepted Answer

Results from discussions of audit needs with executive management and the audit committee.

Answer

A review of audit staff education and training records.

Answer

Information about the audit staff size and composition of comparable organizations.

Answer

The results of the audit staffs most recent performance reviews.

Question 10

Which of the following best describes the assessment of risks?

Accepted Answer

Assess the likelihood and/or impact of risk on the achievement of organizational objectives.

Answer

Assess the actions necessary to reduce the likelihood and/or impact of risk to tolerable levels.

Answer

Assess the amount of risk an organization can accept while pursuing its objectives.

Answer

Assess alternative strategies to reduce or eliminate major risks.

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