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IIA-CIA-Part1 exam consists of 125 multiple-choice questions and must be completed within two and a half hours. It is a computer-based exam that can be taken at any Pearson VUE testing center worldwide. The passing score for the exam is 600 out of a possible 800 points, and candidates receive immediate feedback on their performance after completing the exam.
NEW QUESTION # 69
An internal audit team analyzed the organization's value-at-risk model during an assurance engagement and suggested several useful improvements. Management was impressed by the internal audit team's work and requested additional actions. Which of the following requested actions would impact internal audit independence most severely if fulfilled?
- A. Validate whether model outputs serve the purpose stated by the model.
- B. Modify model inputs and suggest courses of action based on outcomes.
- C. Employ acquired experience to test other models used by the company.
- D. Assess the effectiveness of the model at least semi-annually.
Answer: D
NEW QUESTION # 70
According to IIA guidance, which of the following statements is true with regard to the chief audit executive's (CAE's) responsibility for conducting a self-assessment of the internal audit activity?
1 The CAE should select an independent reviewer or review team to perform sufficient tests of the self-assessment to validate the results
2 The CAE should validate results by engaging experienced audit professionals from a separate internal audit activity outside of the organization to reperform all of the tests conducted for the assessment
3. The CAE should select independent, nonaudit professionals who are knowledgeable about the organization and the industry in which it operates to assist with performing the self-assessment
4. The CAE may consider performing a self-assessment with independent external validation in Iieu of performing a full external assessment
- A. 3 and 4
- B. 1 and 4 only
- C. 1 and 2 only.
- D. 1, 2, and 3
Answer: B
NEW QUESTION # 71
Which of the following tests would most likely help discover a fictitious invoice?
- A. Search for duplicate payment amounts.
- B. Match cancelled checks to invoices.
- C. Check employee bank records against invoice amounts.
- D. Compare vendor addresses to employee addresses.
Answer: B
NEW QUESTION # 72
Which of the following activities would be most likely to impair the objectivity of an internal auditor?
- A. Assisting with the development and installation of a new information systems application.
- B. Developing recommended controls for the use of a new information systems application.
- C. Benchmarking controls during the development of a new information systems application.
- D. Performing reviews of procedures for a new information systems application before it is installed.
Answer: A
Explanation:
Section: Volume D
NEW QUESTION # 73
According to the Standards, which of the following is not a responsibility of the audit committee?
- A. Resolving any disagreements between management and internal audit.
- B. Appointment and performance of the chief audit executive.
- C. Review, assessment and approval of the annual audit plan.
- D. Reviewing internal audit staffing promotions and salary increases.
Answer: D
NEW QUESTION # 74
The chief audit executive (CAE) routinely provides activity reports to the board during quarterly board meetings.
Senior management has asked to review the CAE's board presentation before each board meeting so that any issues or questions can be discussed beforehand. The CAE should:
- A. Not provide activity reports to senior management because such matters are the sole province of the board.
- B. Provide information to senior management that pertains only to completed audit engagements and observations available in published engagement final communications.
- C. Provide the activity reports to senior management as requested and discuss any issues that may require action to be taken.
- D. Disclose only those matters in the activity reports that pertain to expenditures and financial budgets of the internal audit activity.
Answer: C
Explanation:
Section: Volume B
Explanation/Reference:
NEW QUESTION # 75
An organization is implementing a new cybersecurity policy and has established a committee to ensure stakeholder alignment across the organization's infrastructure, network, and security teams. The head of the committee has asked the chief audit executive if the internal audit activity could play a role in these efforts. According to HA guidance, which of the following is the most appropriate response?
- A. It is not appropriate for the internal audit activity to play a role because its independence must be protected.
- B. The internal audit activity may assist the committee and consult with management on the organization's responses and control activities.
- C. The internal audit activity should not participate because there are no IT auditors on staff.
- D. The internal audit activity is knowledgeable about risk and therefore should prioritize the organization's responses and control activities for the committee.
Answer: B
NEW QUESTION # 76
The last quality assessment of the internal audit activity identified three areas for improvement: the achievement of audit engagement objectives,quality of work,and staff development. According to IIA guidance,which of the following should be the chief audit executive's primary focus to achieve these recommended improvements?
- A. Engagement supervision.
- B. Demonstrated compliance with procedures.
- C. Due professional care.
- D. Employment of tools and techniques.
Answer: A
NEW QUESTION # 77
Risk assessments are valuable to the internal audit activity's planning process because they assist in:
- A. Identifying risks that management and the internal auditors have overlooked.
- B. Educating management on the importance of keeping the internal audit activity informed of organizational changes.
- C. Identifying the audit universe or auditable activities that need to be reviewed.
- D. Eliminating all areas with low risk from the audit plan.
Answer: C
Explanation:
Section: Volume B
NEW QUESTION # 78
An internal audit activity has made a preliminary determination that a division of the organization has employed improper accounting practices.
Upon being informed,the head of the organization instructs the chief audit executive (CAE) to cease the investigation and to withhold the information from external auditors.
Which course of action should the CAE follow?
- A. Report the communication to the organization's general counsel.
- B. Inform the external auditors of the findings and the mandate to stop investigating.
- C. Inform the head of the organization that the investigation will continue as planned.
- D. Report the instruction to the chairperson of the audit committee.
Answer: D
NEW QUESTION # 79
An auditor identifies three errors in the sample of 25 entries selected for review (a 12 percent error rate). Based on this result, the auditor assumes that approximately 59 of the total population of 492 entries are incorrect. To reach this assumption, the auditor has used a technique known as which of the following?
- A. Variability tolerance.
- B. Acceptance sampling.
- C. Stratification.
- D. Ratio estimation.
Answer: D
NEW QUESTION # 80
A company has entered into a $20,000,000 fixed-price contract with a general contractor for the construction of a new retail outlet. For this contract, which of the following would represent the greatest risk?
- A. Poor physical protection of materials and equipment.
- B. Failure to complete the project within budget.
- C. Substitution of inferior materials.
- D. Excessive labor charged to the project.
Answer: C
NEW QUESTION # 81
Which of the following, other than the internal audit charter, is most likely to define the purpose, authority, and responsibility of the internal audit activity (IAA)?
- A. The internal audit policy statement.
- B. The IAA vision statement.
- C. The chief audit executive job description.
- D. The organization's charter to conduct operations.
Answer: A
Explanation:
Section: Volume C
NEW QUESTION # 82
Which of the following actions would best help the internal audit activity promote continuous improvement in control effectiveness within the organization?
- A. Identifying objectives and the risks involved in achieving them.
- B. Developing flowcharts to obtain information about control design adequacy.
- C. Providing training on controls and ongoing self-monitoring processes.
- D. Determining whether management measures and monitors the costs and benefits of controls.
Answer: D
NEW QUESTION # 83
Which of the following would most likely function as a detective control?
- A. Insurance claims.
- B. Cycle counts.
- C. Alert employees.
- D. Security dogs.
Answer: B
Explanation:
Section: Volume C
NEW QUESTION # 84
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Earning the IIA-CIA-Part1 Certification demonstrates a candidate’s understanding of the essential principles and practices of internal auditing. Essentials of Internal Auditing certification is highly respected in the industry and is recognized worldwide. It also provides candidates with a competitive edge in the job market and can lead to increased earning potential. Overall, the IIA-CIA-Part1 Certification Exam is an important step for those who wish to advance their careers in internal auditing and demonstrate their expertise in the field.
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