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To be eligible to take the IIA-CIA-Part1 exam, candidates must meet certain education and experience requirements. They must have a bachelor's degree or equivalent and have at least one year of experience in internal auditing or a related field. Candidates without a degree must have at least five years of experience in internal auditing or a related field. The IIA also offers exemptions for candidates who hold certain professional certifications.
NEW QUESTION # 66
Which of the following is ultimately responsible for the continuing professional development of internal audit activity staff?
- A. Board of directors.
- B. Individual internal auditors.
- C. Chief audit executive.
- D. CEO.
Answer: C
Explanation:
The chief audit executive (CAE) is responsible for ensuring the professional development of the internal audit staff. This responsibility includes providing opportunities for ongoing training and development to maintain and enhance their competencies. References:
* IIA Standard 1230: Continuing Professional Development.
* IIA Practice Guide: Continuing Professional Development for Internal Auditors.
NEW QUESTION # 67
Which of the following represents a deficiency in the control environment?
- A. Employees report suspicious activity by calling the organization's ethics hotline.
- B. The sales department has failed to achieve targets for the last nine months.
- C. Hiring procedures do not include background checks for prospective job candidates.
- D. Management reports three potential ethics issues to the board of directors.
Answer: C
Explanation:
A deficiency in the control environment is represented by hiring procedures not including background checks for prospective job candidates. This lack of background checks can lead to hiring personnel who may not have integrity or the appropriate qualifications, increasing risk to the organization.References: COSO Framework, which discusses components of a strong control environment, including the importance of conducting thorough background checks as part of personnel standards.
NEW QUESTION # 68
Which of the following engagement areas would allow the internal audit activity to assess organizational governance?
- A. Quality control.
- B. Ethics activities.
- C. Regulatory compliance.
- D. Accounts payable.
Answer: B
Explanation:
Organizational governance is the combination of processes and structures that help the organization achieve its objectives2. Ethics activities are part of organizational governance, as they reflect the organization's values, culture, and ethical standards3. Internal audit can assess the ethics activities by evaluating the design and effectiveness of the ethics program, policies, and procedures, and providing assurance and advice on how to improve them4.
References:
1: CIA Exam Practice Questions - Certified Internal Auditor 2019
2: IIA Audit Tool - The Institute of Internal Auditors or The IIA1
3: Internal Audit Governance: Effective Governance through Internal Auditing
4: Corporate Governance & Internal Audit | Ideagen
NEW QUESTION # 69
Which of the following is a limitation of using observation as a manual audit procedure?
- A. Observation provides information at a certain time and makes it difficult to draw representative conclusions.
- B. Observation is performed specifically to test the validity of documented or recorded information.
- C. Observation is not as persuasive as inquiry due to a lack of direct evidence.
- D. Observation may cause individuals to behave less critically or carefully if they are aware that other forms of manual audit procedures have already taken place.
Answer: A
NEW QUESTION # 70
Risk within an internal audit engagement is defined as the:
- A. Uncertainty of an event occurring that could have an impact on the achievement of objectives.
- B. Probability that a balance or class of transactions and related assertions contain misstatements that could be material to the financial statements.
- C. Failure to accomplish established objectives and goals for operations or programs.
- D. Failure to adhere to organizational policies, plans, and procedures, or the failure to comply with relevant laws and regulations.
Answer: A
Explanation:
Section: Volume B
NEW QUESTION # 71
According to IIA guidance, which of the following statements about working papers is false?
- A. They demonstrate compliance with auditing standards.
- B. They assist in the implementation of recommendations.
- C. They provide support for communication to third parties.
- D. They contribute to development of the internal audit staff.
Answer: B
NEW QUESTION # 72
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 auditing positions.
- B. Require all of the audit staff to pursue a minimum number of continuing professional education hours each year.
- C. Oversee a training program that matches the actual training provided with the interests of individual auditors.
- 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:
Section: Volume A
NEW QUESTION # 73
Which statement most accurately describes how criteria are established for use by internal auditors in determining whether goals and objectives have been accomplished?
- A. Internal auditors should use professional standards or government regulations to establish the criteria.
- B. Management is responsible for establishing the criteria.
- C. Appropriate accounting or auditing standards, including international standards, should be used as the criteria.
- D. The industry in which a company operates establishes criteria for each member company through benchmarks and best practices for that industry.
Answer: B
NEW QUESTION # 74
Which of the following statements is most likely to be true regarding a consulting engagement involving an organization's new payroll system?
- A. The internal auditor and engagement client established an understanding that the scope would include the new payroll system project.
- B. The internal auditor concluded that the engagement objectives would include assessing the effectiveness of the payroll process controls.
- C. The internal auditor acknowledged the engagement client's satisfactory performance in the final engagement results that were communicated to senior management and the board.
- D. The payroll system engagement was scheduled as a result of internal audit's risk-based annual planning process.
Answer: A
NEW QUESTION # 75
Which of the following is an appropriate role for the board in governance?
- A. Assisting the internal audit activity in performing annual reviews of governance.
- B. Ensuring that financial statements are understandable, transparent, and reliable.
- C. Preparing written organizational policies that relate to compliance with laws, regulations, ethics, and conflicts of interest.
- D. Working with the organization's attorneys to develop a strategy regarding current litigation, pending litigation, or regulatory proceedings governance.
Answer: B
NEW QUESTION # 76
Which of the following must be in existence as a precondition to developing an effective system of internal controls?
- A. A monitoring process,
- B. A strategic objective-setting process.
- C. A risk assessment process.
- D. An information and communication process.
Answer: C
Explanation:
A risk assessment process is a crucial precondition for developing an effective system of internal controls. It helps identify and analyze risks relevant to achieving the organization's objectives, thereby informing the design and implementation of appropriate controls to mitigate those risks. This foundational step ensures that the internal controls are aligned with the specific risk landscape of the organization.References: COSO Framework on Internal Control, Principle Related to Risk Assessment
NEW QUESTION # 77
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.References: IIA Standards for the Professional Practice of Internal Auditing
NEW QUESTION # 78
Which of the following definitions best describes enterprise risk management?
- A. Enterprise risk management is broader than governance and internal control, and focuses on activities designed to ensure that risks are contained at a level acceptable to the enterprise.
- B. Enterprise risk management is narrower than internal control and focuses on managing the risk of loss resulting from external events.
- C. Enterprise risk management is narrower than internal control and focuses on risk mitigation strategies across the enterprise.
- D. Enterprise risk management is broader than internal control and focuses on risk identification and management, and assurance that business objectives will be met.
Answer: D
NEW QUESTION # 79
Which of the following is the best method for testing the accuracy of a computer program's calculation of shipping charges?
- A. Select transactions from invoices with shipping charges using discovery sampling.
- B. Select transactions from invoices with shipping charges using difference estimation.
- C. Use either test data or parallel simulation to test the computer program.
- D. Use generalized audit software to select a monetary-unit sample of invoices that have been billed to customers.
Answer: C
NEW QUESTION # 80
Which of the following is an appropriate roe fa the internal audit activity?
- A. Validating control assessments performed by the external auditor.
- B. Ensuring the organization's key risks are managed through appropriate controls.
- C. implementing new controls to promote continuous improvement
- D. Assisting the organization in maintaining effective controls.
Answer: D
Explanation:
The appropriate role for the internal audit activity is assisting the organization in maintaining effective controls. The internal audit function provides an independent and objective assessment of whether the organization's risk management, control, and governance processes are adequate and functioning effectively.
Implementing new controls or ensuring key risks are managed falls outside the typical scope of internal audit responsibilities, which are primarily advisory and evaluative, not operational.References: Institute of Internal Auditors (IIA) - International Professional Practices Framework (IPPF)
NEW QUESTION # 81
Which of the following fundamental principles of The IIA's Code of Ethics is best described as performing work honestly diligently and responsibly?
- A. Integrity
- B. Competency
- C. Due Professional Care
- D. Proficiency
Answer: A
Explanation:
The fundamental principle of The IIA's Code of Ethics best described as performing work honestly, diligently, and responsibly is Integrity. This principle is foundational to the ethical conduct expected of internal auditors, underpinning their professional behavior and ensuring trust in their work and judgments. References: The IIA's Code of Ethics, specifically the section on Integrity, which outlines the expectation for internal auditors to work with honesty and diligence.
NEW QUESTION # 82
Which of the following statements is correct regarding corporate compensation systems and related bonuses?
I.A bonus system should be considered part of the control environment of an organization and should be considered in formulating a report on internal control.
II.Compensation systems are not part of an organization's control system and should not be reported as such.
III.An audit of an organization's compensation system should be performed independently of an audit of the control system over other functions that impact corporate bonuses.
- A. II and III only.
- B. II only.
- C. III only.
- D. I only.
Answer: D
NEW QUESTION # 83
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. IIonly
- B. II and IVonly
- C. I,II,and IVonly
- D. I and IIIonly
Answer: B
NEW QUESTION # 84
A chief audit executive (CAE) has been asked by the board to evaluate the effectiveness of ethical programs created by management. Which of the following would be the most appropriate action for the CAE to take?
- A. Verify that a code of conduct and related policies exist and are communicated.
- B. Compare the cost of the ethical programs with the achieved outcomes.
- C. Use employee surveys to assess whether ethical programs are achieving desired outcomes.
- D. Compare the design of the organization's ethical programs with best practices.
Answer: A
NEW QUESTION # 85
Which of the following best describes a responsibility of the board of directors with regard to risk management throughout the organization?
- A. Review the portfolio of risk of the organization in relation to its risk appetite.
- B. Monitor the organization's overall risk activities in relation to its risk appetite and other risk criteria.
- C. Assume responsibility for the effectiveness and success of the risk management framework
- D. Guide the integration of risk management with other business planning and management activities.
Answer: B
Explanation:
The responsibility of the board of directors with regard to risk management throughout the organization is to monitor the organization's overall risk activities in relation to its risk appetite and other risk criteria. The board plays a crucial oversight role, ensuring that risk management processes are effectively integrated and aligned with the strategic objectives and risk tolerance of the organization.References: Corporate governance standards and IIA guidance on the role of the board in overseeing organizational risk management activities.
NEW QUESTION # 86
Which of the following controls within a spreadsheet would address the risk of logic errors?
1.The spreadsheet contains formulas that foot and cross-foot data.
2.The spreadsheet is locked to protect cell formulas from being inadvertently changed.
3.Spreadsheets are included in nightly backup processes.
4.Check-in and check-out software is used to manage version control.
- A. 3 and 4 only
- B. 2 and 4 only
- C. 1 and 3 only
- D. 1 and 2 only
Answer: D
NEW QUESTION # 87
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IIA-CIA-Part1 exam, also known as the Essentials of Internal Auditing, is a certification exam offered by the Institute of Internal Auditors (IIA). The IIA is a global professional association that offers education, training, and certification programs for internal auditors. The IIA-CIA-Part1 exam is the first step towards earning the Certified Internal Auditor (CIA) designation, which is a globally recognized certification for internal auditors. IIA-CIA-Part1 exam covers topics such as internal audit basics, risk management, governance, and internal control. It is designed to test the knowledge and skills of individuals who are interested in pursuing a career in internal auditing or those who are already working in the field and want to enhance their knowledge and skills.
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