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IIA IIA-CIA-Part1 Actual Questions and Braindumps
IIA-CIA-Part1 Certification Exam, also known as the Essentials of Internal Auditing, is a globally recognized certification exam offered by the Institute of Internal Auditors (IIA). Essentials of Internal Auditing certification is designed to test the knowledge, skills, and abilities of individuals who want to pursue a career in internal auditing. IIA-CIA-Part1 exam covers a wide range of topics, including internal audit basics, risk management, governance, and ethics.
NEW QUESTION # 272
An internal auditor obtains spreadsheets created by the finance department of an organization. The internal auditor contacts a third party about the source data that was utilized to create the spreadsheets before going on to perform a ratio analysis and a comparison of budget versus actual data. What is the most likely reason that the internal auditor involved a third party before performing further analysis?
- A. To obtain a reliable verification about the accuracy of the source data.
- B. To confirm that the spreadsheets could be used as a source of analytic data.
- C. To determine if a later re-performance for testing mechanical accuracy would be possible.
- D. To determine what future usage limitations the spreadsheets might have.
Answer: A
Explanation:
Section: Volume D
NEW QUESTION # 273
In a well-developed management environment, the internal audit activity would.
- A. 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.
- B. Report the results of audit engagements to line management as well as to senior management.
- C. Interface primarily with senior management, minimizing interactions with line managers who are the subjects of internal audit work.
- D. Conduct regularly scheduled audits of existing systems and initial audits of new computer systems after they have begun operating.
Answer: B
NEW QUESTION # 274
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?
- A. 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.
- B. 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.
- C. Statistical sampling allows for the selection of a minimum sample size, provides a quantitative expression of the IAA's sampling results, and supports extrapolation.
- D. Statistical sampling sets limits on resources used for the IAA, allows for a subjective interpretation of the IAA's sampling results, and supports The Institute of Internal Auditors' requirements for using questionnaires as a sampling tool.
Answer: C
NEW QUESTION # 275
When conducting a preliminary survey, which of the following audit activities should an internal auditor complete first?
- A. Identify risks and controls intended to prevent associated losses.
- B. Determine relevant engagement objectives.
- C. Write detailed audit procedures.
- D. Identify client objectives, goals, and standards.
Answer: D
NEW QUESTION # 276
Which of the following actions should the organization's governing body perform to provide the most effective governance over the organization's culture?
- A. Provide direction.
- B. Design key controls.
- C. Deliver assurance.
- D. Coordinate control activities.
Answer: A
Explanation:
To provide effective governance over the organization's culture, the organization's governing body should provide direction. This involves setting a tone at the top that promotes ethical behavior, accountability, and transparency throughout the organization. Providing direction helps ensure that organizational values are communicated and reinforced, influencing the culture and ethical climate of the entire organization.
IIA guidance on governance and leadership's role in organizational culture.
NEW QUESTION # 277
The chief audit executive should periodically report the internal audit activity's purpose, authority, responsibility, and performance, as well as significant risk exposures and control issues, to which of the following?
I.Board of directors.
II.
Senior management.
III.
Shareholders.
IV.
- A. I, III, and IV only.
External auditors. - B. I and II only.
- C. II only.
- D. I, II, and III only.
Answer: B
NEW QUESTION # 278
Which of the following offers the best evidence that the internal audit activity has achieved organizational independence?
- A. An independent third party has assessed the organization's system of internal controls to be adequate and effective.
- B. The chief audit executive reports both functionally and administratively to the CEO.
- C. The mission statement and strategy of the internal audit activity demonstrates alignment to organizational objectives.
- D. The internal audit charter is drafted properly and approved by the appropriate parties.
Answer: B
NEW QUESTION # 279
An organization allows the same individual to physically access inventory and purchase new assets when supplies are depleted. Which of the following would best help the organization manage the risk of fraud?
- A. Internal auditors should review the frequency and volume of purchased assets to detect trends in the inventory levels.
- B. Accounting personnel should conduct a periodic inventory count and reconcile all inventory movements.
- C. Management should establish a policy requiring new inventory asset purchases to be made on serialized order forms with copies retained.
- D. Accounting personnel should regularly perform a reconciliation between invoices and purchase orders.
Answer: B
NEW QUESTION # 280
During a review of data center physical security and environmental controls, an auditor should ensure that:
I. Visitors are accompanied by authorized personnel at all times.
II. Only developers and operators have access to the data center.
III. Fire suppression equipment is tested periodically.
IV. Fire and water detectors have been installed.
- A. I, III, and IV only
- B. I and III only
- C. II, III, and IV only
- D. II and IV only
Answer: A
Explanation:
Section: Volume B
NEW QUESTION # 281
An internal auditor is testing whether payments to outside contractors have been charged to the proper account. Which of the following sampling methods would be most useful in completing this task?
- A. Haphazard sampling.
- B. Probability-proportional-to-size sampling.
- C. Attribute sampling.
- D. Judgmental sampling.
Answer: C
NEW QUESTION # 282
There is a growing perception that employees generally evade their responsibilities. What impact will an internal auditor most likely see during an engagement?
- A. Supervisors are likely to reduce their level of supervision and increase span of control.
- B. Employees are likely to join forces to accomplish their duties as teams.
- C. Employees are likely to be supervised closely and given little freedom.
- D. Peer employees are likely to trust one another, but distrust management.
Answer: C
Explanation:
When there is a growing perception that employees generally evade their responsibilities, management is likely to respond by increasing supervision to ensure tasks are completed properly. This often results in employees being given less autonomy and being monitored more closely to prevent shirking of duties.
References:
* Internal auditing best practices on human behavior and control environments.
NEW QUESTION # 283
To assure that the technical proficiency of internal auditors is appropriate for the audit engagements to be performed, a chief audit executive should:
- A. Consider the scope of work and level of responsibility when establishing criteria for education and experience in filling internal audit positions.
- B. Oversee a training program that matches the actual training provided with the interests of individual auditors.
- C. Require all of the audit staff to pursue a minimum number of continuing professional education hours each year
- D. Ensure that each newly hired auditor is qualified in all of the disciplines needed to accomplish the department's audit mission.
Answer: A
Explanation:
To assure that the technical proficiency of internal auditors is appropriate for the audit engagements to be performed, a chief audit executive should consider the scope of work and level of responsibility when establishing criteria for education and experience in filling internal audit positions. This approach helps align the skills and competencies of the audit staff with the specific requirements of the audit engagements, ensuring effective performance and adherence to professional standards.
IIA Standards for the Professional Practice of Internal Auditing
NEW QUESTION # 284
When developing the organization's first risk universe,which of the following would the chief audit executive be least likely to consider?
- A. The boundaries established to manage the amount of risk taken.
- B. The exposure to risks following management's risk responses.
- C. The amount of risk that an organization is willing to seek or accept.
- D. The extent and degree of interdependency for identified key risks.
Answer: B
NEW QUESTION # 285
Which of the following statements is true regarding the disclosure of results of the quality assurance and improvement program?
- A. If it has been in existence fewer than five years and has no documented external assessment, the internal audit activity may not indicate that it is operating in conformance with the Standards.
- B. If the results of both internal and external assessments support conformance with the Standards, the internal audit activity must communicate this to the board and senior management in writing.
- C. If nonconformance affects its ability to fulfill its professional responsibilities or stakeholder expectations, the internal audit activity should disclose nonconformance as well as its impact.
- D. If an external assessment reflects an overall conclusion of nonconformance, the internal audit activity may continue to communicate that it conforms with theStandards if it discloses a remediation plan, including timeline with subsequent validation.
Answer: C
Explanation:
According to IIA standards, if nonconformance with the Standards affects the internal audit activity's ability to fulfill its professional responsibilities or meet stakeholder expectations, the internal audit activity should disclose the nonconformance and its impact. This is essential for maintaining transparency and accountability, ensuring that all stakeholders are informed of the internal audit's effectiveness and areas needing improvement.
IIA Standard 1322 - Disclosure of Nonconformance, which outlines requirements for disclosing the results of quality assurance and improvements, particularly concerning nonconformance.
NEW QUESTION # 286
As a result of a high-profile processing error, respective business unit managers are implementing new controls. The internal audit team was asked for their advice regarding the controls. The objective of this consulting engagement would be determined by which of the following?
- A. The business unit manager and the engagement supervisor.
- B. The compliance manager and the business unit manager.
- C. The organization's board of directors.
- D. The chief audit executive.
Answer: A
NEW QUESTION # 287
Which of the following can be used to minimize employees' resentment of controls?
- A. Making sure employees are exempt from participating in control creation
- B. Implementing controls without lengthy s of their purpose
- C. Not using controls to achieve goals
- D. Developing general constricting controls rather than detailed ones
Answer: D
NEW QUESTION # 288
An accounts receivable clerk receives cash payments, posts the payments to customer accounts, and prepares the daily cash deposit.
The clerk has been stealing some cash and manipulating the customer payments to hide the theft.
This fraud could be detected with which of the following controls?
- A. Monthly bank reconciliations are performed by the clerk on a timely basis.
- B. Total cash deposits are compared with the bank reconciliation.
- C. Total cash deposits for the month are reconciled to the cash receipts journal.
- D. Names, amounts, and dates on remittance advices are reconciled with the names, amounts, and dates recorded in the cash receipts journal.
Answer: D
NEW QUESTION # 289
According to IIA guidance, which of the following is true of the internal audit activity's quality assurance and improvement program?
1 Monitoring the internal audit activity's performance must be ongoing
2 All aspects of the internal audit activity should be evaluated
3 The requirement for external assessments can be satisfied through self-assessments that are validated by an independent external party
4 The review of assurance services should be the primary focus
- A. 2 and 3 only
- B. 2 and 3
- C. 1 and 2 only
- D. 1 3 and 4
Answer: B
NEW QUESTION # 290
Which of the following is an appropriate role for the internal audit activity?
- A. Validating control assessments performed by the external auditor.
- B. Assisting the organization in maintaining effective controls.
- C. Ensuring the organization's key risks are managed through appropriate controls.
- D. Implementing new controls to promote continuous improvement.
Answer: C
NEW QUESTION # 291
Which of the following is not part of the five-attribute approach to developing documentation for an audit observation?
- A. Management response.
- B. Recommendation.
- C. Condition.
- D. Effect.
Answer: A
NEW QUESTION # 292
A global manufacturing company has three regional offices. The chief audit executive (CAE) is concerned about the cost of an upcoming external quality assessment of the internal audit activity. The last external assessment was performed six years ago. Recently, the internal audit staff at one of the regional offices performed an internal assessment. To ensure conformance with the Standards, what is the most appropriate action for the CAE to take?
- A. Request the regional office that performed the internal assessment to perform an assessment of the remaining offices.
- B. Review the results of the internal assessment, identify weaknesses, and implement improvements at the remaining offices.
- C. Request from the audit committee an additional budget and an extension so that the external assessment could be performed next year.
- D. Request that an external assessor validate the results of the internal assessment and review the remaining offices.
Answer: C
NEW QUESTION # 293
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
NEW QUESTION # 294
Due to toe increased operational responsibility of the CEO. The chief audit executive (CAE) of an organization currently reports to the chief financial officer (CFO). What is the likely imped of such a situation?
- A. The internal audit activity is adequately positioned when the CAE reports to a member of executive management
- B. The CPO could provide expert advice when auditing areas under his purview
- C. There may be limitation m the scope of engagements that can be undertaken
- D. The expense of finance staff can be catted upon during an audit of finance-related areas
Answer: C
NEW QUESTION # 295
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.
- A. 4 only
- B. 1 and 3 only
- C. 2, 3, and 4 only
- D. 1 and 4 only
Answer: B
NEW QUESTION # 296
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