[Q103-Q126] The Best Valid IIA-CIA-Part1 Dumps for Helping Passing IIA-CIA-Part1 Exam!

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The Best Valid IIA-CIA-Part1 Dumps for Helping Passing IIA-CIA-Part1 Exam!

UPDATED IIA IIA-CIA-Part1 Exam Questions & Answer

IIA-CIA-Part1 exam is an essential exam for those who want to become certified internal auditors. IIA-CIA-Part1 exam covers the fundamental concepts and principles of internal auditing, including risk management, governance, and internal control. Passing IIA-CIA-Part1 exam is a requirement for obtaining the Certified Internal Auditor (CIA) certification, which is recognized worldwide as the standard for excellence in the internal audit profession.

Q103. An automobile manufacturer will become one of the first in the industry to adopt a new inventory management software. Despite the system being new to the market, senior management believes that the benefits are great enough to offset the potential risks. Which of the following aspects of risk management does senior management’s decision best illustrate?

Residual risk.

Inherent risk.

Risk tolerance.

Risk appetite.

Q104. 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?

Request from the audit committee an additional budget and an extension so that the external assessment could be performed next year.

Review the results of the internal assessment, identify weaknesses, and implement improvements at the remaining offices.

Request the regional office that performed the internal assessment to perform an assessment of the remaining offices.

Request that an external assessor validate the results of the internal assessment and review the remaining offices.

Q105. 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?

The opinion must include difficult to measure risks such as the risks of management override of controls, and collusion among dishonest personnel.

The opinion is dependent on complex analyses of numerous internal audit engagements carried out over the prior year.

The opinion is only issued once a year, limiting its usefulness.

Assessing control effectiveness is complicated by inherent risks.

Q106. The chief audit executive (CAE) of a mid-sized pharmaceutical organization has operational responsibility for the regulatory compliance function. The audit committee requests an assessment of regulatory compliance. According to IIA guidance,which of the following is the CAE’s best course of action?

Have a proficient internal audit staff member perform the assessment and disclose the impairment in the audit report and to the board.

Have a regulatory compliance staff member perform a self-assessment,to be reviewed by a proficient internal auditor.

Have a proficient internal audit staff member perform the audit and report the results of the assessment directly to senior management and the board.

Contract with a third-party entity or external auditor to complete the assessment and report the results to senior management and the board.

Q107. Instead of leaving its capital in a bank account with a low guaranteed interest rate, an organization’s board approved a proposal to invest in a stock that could have a high expected return rate without taking any risk mitigation activities. Which risk concept does this decision illustrate?

Risk appetite.

Risk capacity.

Risk tolerance.

Risk retention.

Q108. Which of the following is an example of a transaction-level control?

Human resource policies.

Tone at the top.

Reconciliations of primary accounts.

Inventory counts.

Q109. A chief audit executive (CAE) of a major retailer has engaged an independent firm of
information security specialists to perform specialized internal audit activities. The CAE can rely on the specialists’ work only if it is:

Performed in accordance with the terms of the contract.

Carried out in accordance with the Standards.

Performed under the supervision of the information technology department.

Carried out using standard review procedures for retailers.

Q110. Which of the following statements is most likely to be true regarding a consulting engagement involving an organization’s new payroll system?

The internal auditor and engagement client established an understanding that the scope would include the new payroll system project.

The payroll system engagement was scheduled as a result of internal audit’s risk-based annual planning process.

The internal auditor concluded that the engagement objectives would include assessing the effectiveness of the payroll process controls.

The internal auditor acknowledged the engagement client’s satisfactory performance in the final engagement results that were communicated to senior management and the board.

Q111. Which of the following are considered root causes of fraud?

Rationalization and corruption

Corruption and opportunity

Opportunity and perceived need

Perceived need and weak internal controls

Q112. When an external auditor unknowingly fails to modify an opinion on financial statements that are materially misstated, this is an example of:

An inherent risk.

A control risk.

An audit risk.

A residual risk.

Q113. Which of the following is not an appropriate role for internal auditors after a disaster occurs?

Monitor the effectiveness of the recovery and control of operations.

Correct deficiencies of the entity’s business continuity plan.

Recommend future improvements to the entity’s business continuity plan.

Assist in the identification of lessons learned from the disaster and the recovery operations.

Q114. Which of the following is not considered one of the most common red flags for perpetrators of fraud?

Excessive control issues.

Repeat performance issues.

Unusually close association with customers.

Experiencing financial difficulty.

Q115. An internal auditor is assessing the risk of employees falsifying reimbursement requests for business- related meals or travel. Which of the following procedures would the internal auditor most likely perform first?

Review the supplemental documentation provided for a sample of reimbursement requests.

Interview the payroll/accounting supervisor to determine what controls exist to prevent fraud.

Determine whether or not the payroll/accounting department has been subject to regular review.

Establish a flowchart of the payroll/accounting functions that include any controls currently in place.

Q116. Which of the following would be considered a primary control to reduce the risk associated with setting up duplicate vendors?

Receipt of a signed and approved vendor setup form.

Segregation of duties between setting up vendors and making vendor payments.

System validation and edit checks on vendor identification number

A vendor setup policy and procedure.

Q117. During a routine audit of a customer service hotline, an internal auditor noticed that an unusually high number of customer complaints pertained to payments not being applied to the customers’ accounts. Which of the following would most likely be the reason for the high volume of complaints?

An ineffective customer service department.

Poor controls in the invoice approval processes.

Check tampering by an employee.

Submission of fraudulent expense reports.

Q118. Why are preventative controls generally preferred to detective controls?

Because preventive controls promote doing the right thing in the first place, and lessen the need for corrective action.

Because preventive controls are more sensitive and identify more exceptions than detective controls.

Because preventive controls include output procedures, which cover the full range of possible reviews, reconciliations and analysis.

Because preventive controls identify exceptions after-the-fact, allowing them to be used after the entire review is complete and therefore finding exceptions that detective controls may have missed.

Q119. Which of the following is a way to demonstrate an individual internal auditor’s competency through continuing professional development?

Create different training budgets for each of the internal auditors

Define average training hours per auditor as a team performance measure

Analyze internal audit client survey feedback following audits

Review training records for all internal auditors

Q120. In which of the following situations may the internal audit activity report conformance with the Standards?

An internal audit activity has been in existence at least five years and has not completed an external assessment,

An internal auditor was assigned to an audit engagement but did not meet individual objectivity requirements.

The internal audit activity prepared an internal audit plan that was not risk-based.

The internal audit activity has been in existence fewer than five years, but periodic self-assessments were conducted.

Q121. Which of the following best ensures the independence of the internal audit activity?
1.The CEO and audit committee review and endorse any changes to the approved audit plan on an annual basis.
2.The audit committee reviews the performance of the chief audit executive (CAE) periodically.
3.The internal audit charter requires the CAE to report functionally to the audit committee.

3 only

1 and 2 only

2 and 3 only

1,2,and 3

Q122. Which of the following situations is most likely to threaten the independence of the internal audit activity?

The chief audit executive reports functionally to the board and administratively to the CEO.

The annual budget for the internal audit activity is approved by the chief financial officer.

The internal audit activity is completely outsourced to an external service provider.

The internal audit manager provides consulting services to the procurement department, where she worked during the prior year.

Q123. This chief audit executive (CAE) engaged an internal auditor to consult on an organization’s complex information technology system. Shortly after beginning the engagement, the auditor unexpectedly resigned.
Unfortunately, this auditor was the only available auditor with the necessary expertise. The CAE will not be able to hire someone with similar expertise in time to meet a regulatory deadline.
Which of the following would be the best course of action for the CAE to take?

Continue with the engagement in order to meet the regulatory deadline, but highlight areas in the final report that might need to be revised in the future.

Ask that a senior member of the organization’s IT department with the required systems expertise join the audit team to assist in completing the engagement.

Delay the engagement and inform the board of the situation, asking them to provide acceptable alternatives for completing the engagement.

Remove the planned engagement from the audit plan and explain to senior management the problems with moving forward without an auditor with the necessary expertise.

Q124. Which of the following fraud schemes is often an off-book fraud*?

Payroll fraud

Disbursement fraud

Corruption

Information misrepresentation

Q125. In selecting a team to perform an internal audit of a purchasing operation, which of the following characteristics would not preclude an auditor from being selected?
1. The auditor’s spouse is employed by the clerical section of the purchasing records unit.
2. The auditor had been a purchasing agent five years earlier.
3. The auditor’s family owns a business that regularly sells goods to the organization.
4. The auditor has received a desk calendar as a promotional gift from a vendor.

1 and 3 only

1 and 4 only

2 and 3 only

2 and 4 only

Q126. Which of the following would be an appropriate outcome of a quality assurance and improvement program in an internal audit activity?
– Modification of resources.
—
Corrections to procedures. Changes in processes. Implementation of new technology.

2 and 4 only.

3 and 4 only.

1, 2, and 3 only.

1, 2, 3, and 4.

IIA-CIA-Part1 (Essentials of Internal Auditing) Certification Exam is an essential step for individuals who want to pursue a career in internal auditing. IIA-CIA-Part1 exam covers fundamental principles and concepts of internal auditing, and passing it demonstrates a commitment to professional development and a deep understanding of internal auditing principles and practices. Essentials of Internal Auditing certification is recognized globally and is highly valued by employers in the internal auditing industry, making it a valuable asset for those seeking to enhance their career opportunities and earning potential.

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