IIA IIA-CIA-Part1 Certified Internal Auditor - Part 1 Practice Exams

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IIA IIA-CIA-Part1 Certified Internal Auditor - Part 1 Practice Exams - V

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QUESTION NO: 401 What is the primary purpose of a fishbone diagram? *

1 point

A. To depict the areas of responsibility for departments in an organization.

B. To plan and control complex projects,such as internal audits.

C. To represent the frequencies of adverse conditions in a given process.

D. To identify the possible causes of adverse conditions

QUESTION NO: 402 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? *

1 point

A. Invoices are not being mailed to customers.

B. An employee is tampering with customer checks.

C. Employees are submitting fraudulent expense reports.

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

QUESTION NO: 403 Which of the following is a valid statement about the use of visual observations during an audit engagement? 1. Visual observations can be used to detect ineffective controls, idle resources, and safety hazards. 2. Visual observations can be used during both preliminary survey and fieldwork stages of the audit engagement. 3. Visual observations can provide unsubstantiated facts to management if the internal auditor believes the information is useful. 4. Visual observations can assist an auditor in determining if a material observation should be communicated through informal means to the organization’s senior management *

1 point

A. 1 and 2only

B. 1 and 4only

C. 2 and 3only

D. 3 and 4only

QUESTION NO: 404 An internal auditor for a large retail chain suspects that a store manager has been stealing money from cash sales by listing the sales as accounts receivable and then writing off the accounts as bad debts. Which of the following irregularities is the most likely cause of the auditor's suspicion? *

1 point

A. A much higher bad debt expense as a percentage of sales than that of previous years.

B. A much higher bad debt expense as a percentage of sales than that of other stores.

C. A much higher percentage of past-due accounts receivable than that of other stores.

D. A much higher percentage of past-due accounts receivable than that of previous years.

QUESTION NO: 405 Which of the following would provide the best guidance to a chief audit executive who is setting internal audit staff requirements? *

1 point

A. A review of audit staff education and training records.

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

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

D. The results of the audit staff's most recent performance reviews.

QUESTION NO: 406 An organization's chief audit executive (CAE) determines that the internal audit staff does not have the requisite skills to conduct an audit of the financial derivatives area. Which of the following would be the best course of action for the CAE to follow? *

1 point

A. Outsource the audit engagement to a qualified external auditing firm without burdening the audit committee with the decision.

B. Determine the requisite knowledge needed,and obtain the proper training for auditors,even if the training will significantly push back the project's timeframe as outlined by the audit committee.

C. Notify the audit committee of the problem,and assign the most competent auditors on staff to perform the audit engagement.

D. Employ the skills of a financial derivatives expert to consult on the project,and supplement the consulting with a local seminar on financial derivatives.

QUESTION NO: 407 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? *

1 point

A. Management may be concerned about its reputation in the financial markets

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 potential penalties that could occur if quarterly financial statements are misstated.

D. Management may perceive that having quarterly financial information examined by the internal auditors enhances the information's value to internal decision making

QUESTION NO: 408 Which of the following scenarios exemplifies a potential internal control weakness? *

1 point

A. The same employee who receives cash from customers prepares a prelisting of cash receipts.

B. The same employee who records cash receipts in the accounts receivable subsidiary ledger ensures that the ledger automatically updates the information.

C. The same employee who restrictively endorses checks received from customers prepares the bank's check deposit slips.

D. The same employee who makes deposits at the bank prepares the monthly bank reconciliation

QUESTION NO: 409 After being terminated due to downsizing, an internal auditor finds a different job with an organization in the same industry. Which of the following actions would violate the IIA Code of Ethics? *

1 point

A. To determine audit priorities in the new job,the auditor uses the audit risk approach that the auditor's previous employer used,without receiving permission to do so.

B. At the new organization,the auditor is asked to develop forms to implement probabilityproportional-to-size sampling. Although unsure of how to perform this type of sampling,the auditor proceeds without asking for assistance.

C. In preparing for an audit at the previous organization,the auditor had conducted a great deal of research on the Internet at home to identify best practices for the management of a treasury function. The auditor has retained much of the research and uses it to conduct an audit of the new employer's treasury function.

D. In the first week at the new organization,the auditor discovers a high fraud risk surrounding the organization's database and suggests that the information technology department implement a new password system to prevent fraudulent actions before they occur.

QUESTION NO: 410 An organization has implemented a new automated payroll system that contains a table of payrates 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? *

1 point

A. Restrict data-table access from management and line supervisors who have the authority to determine pay rates.

B. Require a supervisor in the department,who has the ability to change the table,to compare the changes to a signed management authorization.

C. Ensure that adequate edit and reasonableness checks are built into the automated system.

D. 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.

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