Free Certified Internal Auditor IIA-CIA-Part1 Exam Practice Test

A financial services organization's board is assessing increased regulations and its effect on current industry lending practices. Which of the following committees would help the board identify and assess the effects of the increased regulations?

• Quality committee.
• Audit committee.
• Risk committee.
• Governance committee.

If the skills and competencies are not present within the internal audit activity to complete an ad-hoc assurance engagement, which of the following is an acceptable resolution?

• Politely decline the engagement due to a lack of qualified staff available at the time.
• Complete the engagement as requested, with the best of the current staffs abilities.
• Consider using employees from other departments in the organization on the audit team.
• Change the scope of the testing to ensure that only available staff proficiencies are used

Senior management asks the chief audit executive to review the organization's compliance with recently introduced legislation on international transfer pricing. The review requires an internal auditor who thoroughly understands the legislation and pricing methods. The internal audit activity does not have an auditor with those skills. Which of the following is the most appropriate course of action?

• Outsource the engagement to an external audit firm that has appropriate skills.
• Recruit a lawyer with knowledge of the legislation to the audit team and ask the new auditor to perform the engagement.
• Decline to perform the engagement, as the internal audit activity does not have the appropriate skill set.
• Carry out the engagement using existing internal audit staff to help them gain the appropriate experience.

An experienced internal auditor is planning an assurance engagement of the organization's sales activities. During process walkthroughs and interviews, many sales representatives expressed concerns about management's escalating demands to meet the organization's sales goals. According to the MA guidance, which of the following is the best application of due professional care in planning the engagement?

• Disregard the complaints because the information isn't reliable and isn't sufficient to support engagement conclusions and results.
• Consider the significance of the risks related to the complaints and develop appropriate assurance procedures in work programs.
• Disregard the complaints because using them would violate the confidentiality principle.
• Discuss management's needs and expectations related to including the complaints in the audit scope.

Which of the following frauds is most likely to occur in the accounts payable function?

• Factitious vendors are entered into the system, possibly resulting in improper disbursements.
• Bad debt expense is intentionally omitted from the financial statements.
• Certain costs are capitalized, rather than expensed.
• A related party receives benefits not appropriate in an arm's-length transaction.

Which statement is accurate regarding reporting on the quality assurance and improvement program (OAIP) to conform with the International Standards for the Professional Practice of Internal Auditing?

• The chief audit executive (CAE) should report all stages of the OAlP's development and key milestones.
• The CAE should report only corrective action plans that meet external assessor or stakeholder requirements.
• The CAE should establish the form and content of program communication so that it is in alignment with the internal audit activity charter.
• The CAE should disclose program details only after both internal and external assessments have been completed.

An internal auditor is reviewing employee travel expenses from the previous six months for fraud. Which of the following tests would best detect instances where personal travel has been claimed?

• Verifying whether claims have been properly authorized for payment
• Verifying whether claims are properly supported by invoices or other documents.
• Confirming that all claims are within the limits of the organization's travel policy.
• Reconciling claims against business the requests that were approved by supervisors

According to The IIA’s Code of Ethics, which of the following best describes the principle of integrity?

• Auditors shall observe the law and make disclosures expected by the law and the profession
• Auditors shall disclose all material facts known to them that if not disclosed may distort the reporting of activities under review
• Auditors shall engage only in those services for which they have the necessary knowledge skills and experience
• Auditors shall be prudent in the use and protection of information acquired in the course of their duties

In a small organization, management is unable to achieve adequate segregation of duties for its cash-handling procedures Therefore hidden surveillance cameras were installed to monitor cash-handling activities Which of the following best describes this type of control?

• Corrective control
• Process-level control
• Compensating control
• Preventive control

An Internal auditor accepted a role as an engagement supervisor on a highly specialized and technical engagement for which she did not have the expertise. Which of the following fundamental principles of The IIA's Code of Ethics did she violate?

• Objectivity.
• Confidentiality.
• Competency.
• Due professional care.