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IIA-CIA-Part1 (Essentials of Internal Auditing) exam is a globally recognized certification exam for professionals who want to establish their expertise in the field of internal auditing. IIA-CIA-Part1 exam is administered by the Institute of Internal Auditors (IIA) and is the first step towards earning the Certified Internal Auditor (CIA) designation. Passing IIA-CIA-Part1 exam demonstrates that the candidate has a strong understanding of the fundamentals of internal auditing and is equipped to handle the challenges of the profession.
NEW QUESTION # 110
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. Attribute sampling.
- C. Probability-proportional-to-size sampling.
- D. Judgmental sampling.
Answer: B
NEW QUESTION # 111
Which of the following is true with respect to the risk assessment process?
- A. The ethical climate should not be included since this factor cannot be measured quantitatively.
- B. The risk assessment process should be conducted at least every three years.
- C. More than one risk factor may have to be used to ensure that the risk assessment is comprehensive.
- D. Each risk factor should be given equal weighting in order to reduce the opportunity for bias.
Answer: C
NEW QUESTION # 112
Which of the following statements represents the most appropriate correlation between an organization's risk maturity and the internal audit activity's consulting role in risk management processes?
- A. When an organization has a high level of risk maturity the internal audit activity is less likely to provide consulting services related to risk management
- B. When an organization has a high level of risk maturity the internal audit activity is more likely to provide consulting services related to risk management
- C. There is typically no correlation between an organization's risk maturity and the extent to which the internal audit activity's consulting role in risk management processes
- D. When an organization has a low level of risk maturity, the internal audit activity is less likely to provide consulting services related to risk management
Answer: C
NEW QUESTION # 113
In addition to data protection, which of the following is a control that is typically used by companies to safeguard the privacy rights of their customers?
I. End-user computing.
II. Encryption of data.
III. Spyware.
IV. Intrusion detection.
- A. I and III only
- B. II only
- C. I, II, and IV only
- D. II and IV only
Answer: D
NEW QUESTION # 114
Which of the following elements should an auditor recommend for inclusion in an organization's code of ethics?
I.Ethics should vary with local customs in the organization's foreign operations.
II.
Whistle-blowing should be discouraged because it can cause distrust among employees and false accusations which waste organizational resources on investigations.
III.
Ethical behavior should not be incorporated into performance evaluations because it is too subjective and controversial.
- A. I, II, and III.
- B. None of the above.
- C. II only.
- D. I only.
Answer: B
NEW QUESTION # 115
Once an organization's risks are identified, what would be the next step to ensure resources are properly allocated to manage those risks?
- A. Risks must be assessed.
- B. Risk responses must be selected.
- C. The risk universe must be established.
- D. Risk responses must be aligned.
Answer: C
NEW QUESTION # 116
According to the Standards, the organizational status of the internal audit activity:
- A. Must be sufficient to permit the accomplishment of its audit responsibilities.
- B. Is best when the reporting relationship is direct to the board of directors.
- C. Is guaranteed when the charter specifically defines its independence.
- D. Requires the board's annual approval of the audit schedules, plans, and budgets.
Answer: A
NEW QUESTION # 117
An internal auditor audited a department store's cash function. Which of the following actions would indicate a lack of due professional care by the auditor?
- A. Based on a well-designed system of internal controls over the cash function, the audit report assured senior management that no irregularities existed.
- B. The audit report included a well-supported recommendation for a reduction in staff even though such a reduction might adversely impact morale.
- C. A flowchart of the entire cash function was developed but only samples of transactions were tested.
- D. The auditor informed appropriate authorities within the organization about suspected wrongdoing but did not inform external authorities.
Answer: A
Explanation:
Section: Volume C
NEW QUESTION # 118
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, on-line training courses, and tutoring college students.
- B. Formal education, on-line training courses, and tutoring college students.
- C. Volunteering in relevant professional organizations, formal education, and online training courses.
- D. Volunteering in relevant professional organizations, formal education, and tutoring college students.
Answer: C
NEW QUESTION # 119
Which of the following would be an appropriate outcome of a quality assurance and
improvement program in an internal audit activity?
1.Modification of resources.
2.Corrections to procedures.
3.Changes in processes.
4.Implementation of new technology.
- A. 1,2,3,and 4
- B. 2 and 4 only
- C. 1,2,and 3 only
- D. 3 and 4 only
Answer: A
NEW QUESTION # 120
A manufacturing organization's multi-step sales and shipping process starts when the organization's headquarters receives the sales order. Headquarters then shares that data with the individual manufacturing facility that compiles the shipment. Finally, the individual manufacturing facility sends the shipments to the customer. Which method should the internal auditor use to document this process in a flowchart?
- A. Trace the entire process, from the receipt of the sales order at headquarters to when the goods are shipped to the customer.
- B. Request a copy of each individual manufacturing facility's flowcharts, speak with facility managers to confirm that they have been updated and then use the information in a flowchart.
- C. Obtain information on how management sets sales prices, find documentation about how the organization approves the change of sales prices, and prepare an overview flowchart that links the sales price details.
- D. Trace the entire process in reverse, beginning with the shipped goods and ending with the receipt of the sales order at headquarters.
Answer: A
NEW QUESTION # 121
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 and III only
- B. II, III, and IV only
- C. II and IV only
- D. I, III, and IV only
Answer: D
NEW QUESTION # 122
An internal auditor uses a predefined macro provided in a popular spreadsheet application to verify the present value of the organization's investments. Which of the following is the most appropriate course of action regarding the auditor's use of this functionality?
- A. The auditor should review the programming of the macro before its use to ensure that it is appropriate for the required calculations.
- B. The auditor should tabulate the results in the spreadsheet to ensure the macro has generated the correct results for all calculations.
- C. The auditor should accept the calculations generated by the function,as any further work or documentation would be inefficient.
- D. The auditor should perform a manual recalculation of several results to validate and document the results.
Answer: D
NEW QUESTION # 123
During the course of an audit, an internal auditor discovers that a valuable employee in the research department has been patenting new developments in the employee's name that
are unrelated to the basic business of the organization. The organization does not have a policy addressing this specific issue, but does have a general policy that all important new discoveries by employees are the property of the organization. Division management views the employee's actions as extra incentive to retain the employee. A decision to include the employee's action in the engagement final communication would bE.
A violation of the IIA Code of Ethics.
A violation of the reporting requirements in the Standards.
Justified and necessary, according to the IIA Code of Ethics and Standards.
- A. 3 only.
- B. 1 and 2 only.
- C. 2 only.
- D. 1 only.
Answer: A
Explanation:
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NEW QUESTION # 124
A chief audit executive (CAE) is planning to issue an annual report concluding on the overall effectiveness of the organization's internal control system. According to the Standards, which of the following is likely the most significant challenge facing the CAE when creating the report?
- A. The opinion must include difficult to measure risks such as the risks of management override of controls, and collusion among dishonest personnel.
- B. The opinion is dependent on complex analyses of numerous internal audit engagements carried out over the prior year.
- C. Assessing control effectiveness is complicated by inherent risks.
- D. The opinion is only issued once a year, limiting its usefulness.
Answer: B
NEW QUESTION # 125
Which of the following is a common error made in designing multiple-choice questions in a survey questionnaire?
- A. Unipolar rather than bipolar labels are used for the response categories.
- B. The alternative response categories for the questions are not mutually exclusive.
- C. Likert scaling is used instead of semantic differential scaling.
- D. The question itself uses terms that are very familiar to the respondent.
Answer: B
Explanation:
Section: Volume C
NEW QUESTION # 126
Which of the following best contributes to the effectiveness of the internal audit activity in an organization?
- A. Appropriate terms of internal audit scope and responsibility in the charter.
- B. Appropriate compliance coverage in the annual audit plan.
- C. Assurance of internal audit objectivity by the board.
- D. Regular review of the audit charter by management.
Answer: A
NEW QUESTION # 127
The chief audit executive's responsibility regarding control processes includes:
- A. Ensuring that the internal audit activity assesses all control processes annually.
- B. Assisting senior management and the audit committee in the development of an annual assessment about internal control.
- C. Maintaining the organization's governance processes.
- D. Overseeing the establishment of internal control processes.
Answer: B
Explanation:
Section: Volume A
NEW QUESTION # 128
Which of the following is the responsibility of an internal auditor?
Assist operating management in implementing audit recommendations.
Provide management with value-added analysis to improve operations.
Become an advocate for changes to the internal audit activity charter.
Disclose non-financial risks that may be identified during the course of an engagement.
- A. 1,2,3,and 4
- B. 1,2,and 4 only
- C. 1 and 3 only
- D. 2 and 4 only
Answer: D
NEW QUESTION # 129
An organization's chief audit executive (CAE) has been asked to monitor and report on any violations of the organization's code of conduct. The CAE should:
- A. Lead the committee responsible for the oversight of the code.
- B. Participate in an advisory capacity on the committee that adjudicates any violations.
- C. Review and adjudicate all complaints.
- D. Develop specific procedures to ensure that the code is clearly communicated to all employees.
Answer: B
NEW QUESTION # 130
Which of the following actions should an organization take to detect an emerging risk of potential fraud?
- A. Undertake background checks for new employees as part of the hiring process
- B. Adopt reward and recognition programs that promote good behaviors
- C. Institute periodic educational training on expected ethical behaviors
- D. Establish an anonymous platform for reporting suspected unethical behaviors
Answer: D
NEW QUESTION # 131
A major difference between enterprise risk management and traditional risk management
lies in the narrow focus of traditional risk management on:
I.Property and liability risks.
II.Risks with insurance solutions.
III.Risks impacting organizational objectives.
- A. II and IIIonly
- B. I and IIIonly
- C. I,II,and III.
- D. I and IIonly
Answer: D
NEW QUESTION # 132
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 for the month are reconciled to the cash receipts journal.
- C. Names, amounts, and dates on remittance advices are reconciled with the names, amounts, and dates recorded in the cash receipts journal.
- D. Total cash deposits are compared with the bank reconciliation.
Answer: C
Explanation:
Section: Volume E
NEW QUESTION # 133
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IIA-CIA-Part1 exam covers the fundamental principles of internal auditing, including governance and risk management, internal control, and the audit process. It is designed to test the knowledge and skills necessary for entry-level internal auditors to effectively carry out their roles and responsibilities. IIA-CIA-Part1 exam consists of 125 multiple-choice questions and must be completed within two and a half hours.
IIA-CIA-Part1 Exam is a challenging but rewarding certification that can open up many career opportunities for individuals interested in internal auditing. Passing the exam demonstrates a strong knowledge and understanding of the fundamental principles of internal auditing, which is highly valued by employers in the industry. IIA-CIA-Part1 exam is a valuable investment in one's professional development and can help individuals advance their careers in internal auditing.
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