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NEW QUESTION 350
Which of the following describes a control weakness?
- A. Pre-numbered blank purchase orders are secured within the purchasing department.
- B. The purchasing agent invests in a publicly traded mutual fund that lists the stock of one of the company's suppliers in its portfolio.
- C. Normal operational purchases fall in the range from $500 to $1, 000 with two signatures required for purchases over $1, 000.
- D. Purchasing procedures are well designed and are followed unless otherwise directed by the purchasing supervisor.
Answer: D
NEW QUESTION 351
Which aspect of the audit function would be most impacted by a lack of coordination between an organization's internal and external auditors?
- A. Responsiveness.
- B. Effectiveness.
- C. Efficiency.
- D. Timeliness.
Answer: C
NEW QUESTION 352
Why are preventative controls generally preferred to detective controls?
- A. Because preventive controls are more sensitive and identify more exceptions than detective controls.
- B. 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.
- C. Because preventive controls include output procedures, which cover the full range of possible reviews, reconciliations and analysis.
- D. Because preventive controls promote doing the right thing in the first place, and lessen the need for corrective action.
Answer: D
NEW QUESTION 353
Which of the following audit findings would have the least impact (either positive or negative) on a department's control environment?
- A. The department manager sets and demonstrates a tone of honesty and integrity in all business dealings.
- B. The department makes long-term investment risk decisions to maximize return on investment.
- C. Many department functions are duplicated or verified by other department employees.
- D. Deficiencies were found in the appropriate authorization of transactions.
Answer: B
Explanation:
Section: Volume B
NEW QUESTION 354
According to NA guidance, which of the following actions by the chief audit executive would best ensure that internal auditors demonstrate due professional care?
- A. Ensuring the internal audit activity is not found fallible during audit engagements.
- B. Developing policies and procedures for the internal audit activity.
- C. Undertaking all engagements that management requests of the internal audit activity.
- D. Ensuring the internal audit activity reports functionally to the board of directors.
Answer: A
NEW QUESTION 355
Which of the following statements is true regarding reporting results of the quality assurance and improvement program to senior management and the board?
- A. A report, including the results of both internal and external assessments must be provided to the board annually
- B. Following the reporting the board must give the internal audit activity five years to correct any deviations
- C. Internal assessments must be reported to the board at least every five years
- D. If supported by assessment results, reporting provides assurance that internal auditors demonstrate conformance with the Code of Ethics
Answer: D
NEW QUESTION 356
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.
- A. 1 and 3 only
- B. 1 and 4 only
- C. 2 and 3 only
- D. 2 and 4 only
Answer: D
Explanation:
Section: Volume D
Explanation
NEW QUESTION 357
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:
- A. Performed under the supervision of the information technology department.
- B. Carried out using standard review procedures for retailers.
- C. Carried out in accordance with the Standards.
- D. Performed in accordance with the terms of the contract.
Answer: C
NEW QUESTION 358
During an assurance engagement, an internal auditor uses benchmarking research to support preparation of a report to stakeholders that contains significant findings about control deficiencies. Which of the following skills did the auditor demonstrate?
- A. Critical thinking.
- B. Persuasion and collaboration.
- C. Internal audit management.
- D. Conflict negotiation.
Answer: A
NEW QUESTION 359
Upon completion of an external assessment as part of the quality assurance and improvement program (QAIP), the chief audit executive (CAE) reported the results to senior management and the board The CAE included the following elements in the report
- Qualifications and independence of me external assessment team
- Conclusions of assessors
- Corrective action plans
How should the CAE improve the aforementioned approach to reporting the resets of QAIP?
- A. The report should indicate that the external assessment must be performed at least once every five years
- B. Senior management should be excluded from the reporting as the QAiP results must be communicated to re board only
- C. The results must be snared with the external a auditors as well, so they can determine the extent to which they can rely on me work of the internal audit activity
- D. The report can be streamlined by removing unnecessary information such as the qualifications and me independence of external assessors
Answer: A
NEW QUESTION 360
In developing an appropriate work program for an audit engagement, the most important factor for an audit supervisor to consider is the:
- A. Potential impact of risks.
- B. Time required to complete the engagement.
- C. Availability of records and data.
- D. Capabilities of audit personnel.
Answer: A
NEW QUESTION 361
An internal auditor notes that employees are able to download files from the internet. According to IIA guidance, which of the following strategies would best protect the organization from the risk of copyright infringement and licensing violations resulting from this practice?
- A. Utilize secure socket layer encryption.
- B. Utilize dedicated and encrypted network connections.
- C. Apply antivirus and patch management software.
- D. Install a software inventory management application.
Answer: D
Explanation:
Section: Volume E
Explanation/Reference:
NEW QUESTION 362
According to The MA Code of Ethics, which of the following is one of the rules of conduct for objectivity?
- A. Internal auditors shall continually improve their proficiency and effectiveness and quality of their services.
- B. Internal auditors shall be prudent in the use and protection of information acquired in the course of their duties.
- C. Internal auditors shall not accept anything that may impair or be presumed to impair their professional judgment.
- D. Internal auditors shall respect and contribute to legitimate and ethical objectives of the organization.
Answer: C
NEW QUESTION 363
A manufacturer uses a materials requirements planning (MRP) system to track inventory, orders, and raw materials requirements. What condition should an auditor search for in the MRP database if a preliminary assessment indicated that inventory is understated?
I. Item cost set at zero.
II. Negative quantities on hand.
III. Order quantity exceeding requirements.
IV. Inventory lead times exceeding delivery schedule.
- A. III and IV only
- B. II and IV only
- C. I and IV only
- D. I and II only
Answer: D
NEW QUESTION 364
According to IIA guidance, which of the following is least compliant with the requirements regarding an internal auditor's need for objectivity?
- A. An internal auditor performed an assurance engagement for the effectiveness of accounts payable access controls, one of which he previously helped to design.
- B. An internal auditor participated in an audit of controls around absenteeism, despite providing some consultation on controls in this area earlier in the year.
- C. An internal auditor, previously employed in the quality assurance operations area, performed a consulting engagement for the operations manager.
- D. An internal auditor assessed the effectiveness of controls over payroll software, which he had helped implement with a previous employer.
Answer: A
NEW QUESTION 365
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