IIA-CIA-Part1 Practice Questions

Question 1

The manager of the payroll department requested a review of the payroll process, but only wants the engagement to include processes related to approval of time worked. What type of activity is this?

Accepted Answer

Compliance assurance engagement.

Answer

Financial assurance engagement.

Answer

Operational consulting engagement.

Answer

Risk management consulting engagement.

Question 2

In which of the following scenarios would the chief audit executive (CAE) be required to decline the assignment?

Accepted Answer

There is no available expertise on the internal audit team to perform a consulting engagement

Answer

The CAE would need to procure external services to deliver the internal audit assurance program.

Answer

There is no expertise within the internal audit team for detecting and investigating fraud.

Answer

There is no expertise within the internal audit team for auditing an IT engagement.

Question 3

Which of the following scenarios best demonstrates the application of internal audit proficiency?

Accepted Answer

Management requests that the internal audit activity review and provide feedback on its strategic plans for a merger, but the chief audit executive (CAE) declines the engagement due to the team's lack of experience with mergers.

Answer

A CAE reassigns auditors from other audits to perform testing on all of the fixed asset additions for a period, including amounts below the materiality level stated by external auditors.

Answer

Due to the routine and recurring nature of bank branch audits, an audit manager often excludes detailed planning at the beginning of the audit and immediately performs fieldwork.

Answer

During fieldwork, an auditor observed a lack of segregation of duties over cash management. The auditor reported this observation to his supervisor, who decided that the area should be examined in a subsequent audit.

Question 4

Which of the following situations is most likely to prompt the internal audit activity to disclose its nonconformance with the Standards?

Accepted Answer

The annual internal audit plan includes performance audits of main business processes, but reviews of high-risk development projects were not considered.

Answer

One of the organization's senior internal auditors owns a side business, though to date, no sales have been made to this business.

Answer

The internal audit activity committed to carrying out an audit of documentation on investment hedging, and a hedging expert was contracted to assist with the engagement.

Answer

A periodic quality self-assessment of the internal audit activity identified a number of improvement areas with regard to key performance indicators.

Question 5

Which of the following statements is true regarding the internal audit activity's quality assurance and improvement program (QAIP)?

Accepted Answer

The QAIP verifies conformance with the Definition of Internal Auditing, Code of Ethics, and Standards.

Answer

The QAIP scope includes assurance work performed by the internal audit activity but not consulting work.

Answer

QAIP reports are for internal use primarily and typically are not shared with members outside of the internal audit activity.

Answer

QAIPs make a distinction between fully outsourced internal audit activities and in-house internal audit teams, as a different set of criteria is applied for each.

Free IIA IIA-CIA-Part1 Exam Practice Questions & Explanations