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IIA-CIA-Part1 Certification Exam is an essential step for individuals who want to start a career in internal auditing. Essentials of Internal Auditing certification demonstrates to employers that the individual has the necessary knowledge and skills to perform internal auditing tasks effectively. Essentials of Internal Auditing certification also provides a competitive advantage to individuals who want to advance their career in the field of internal auditing.
IIA-CIA-Part1 (Essentials of Internal Auditing) Certification Exam is a comprehensive assessment designed to test the knowledge and skills of candidates who wish to become certified internal auditors. IIA-CIA-Part1 exam is one of the three exams required to become a Certified Internal Auditor (CIA) and is administered by the Institute of Internal Auditors (IIA). Passing IIA-CIA-Part1 exam is a critical step towards obtaining certification and advancing in the field of internal auditing.
IIA-CIA-Part1 Exam covers a wide range of topics related to internal auditing, including governance and risk management, internal control and audit tools, and the role of internal auditors in the organization. IIA-CIA-Part1 exam consists of 125 multiple-choice questions that need to be completed within 2.5 hours. The passing score for the exam is 600 out of 800.
NEW QUESTION # 263
Which of the following is not a role of the internal audit activity in facilitating risk identification and evaluation?
- A. Providing assurance that risks are evaluated correctly.
- B. Evaluating risk management processes.
- C. Supporting managers to identify ways to mitigate risks.
- D. Recommending accountability for risk management.
Answer: D
Explanation:
Section: Volume E
NEW QUESTION # 264
Human resources and payroll are separate departments. Which of the following combinations would provide the best segregation of duties?
- A. Human resources personnel add employees, and payroll personnel process hours and enter employee bank account numbers. Paychecks are automatically deposited in the employee's bank account.
- B. Payroll personnel add employees and enter employee bank account numbers but process hours only as approved by the human resources department. Paychecks are
automatically deposited in the employee's bank account. - C. Human resources personnel add employees, review and submit payroll hours to the payroll department for processing, and deliver paychecks to employees.
- D. Human resources personnel add employees, payroll personnel process hours, and human resources personnel deliver paychecks to employees.
Answer: A
NEW QUESTION # 265
Which of the following is the primary concern of an internal auditor in a comprehensive audit of an organization?
- A. Confirmation of compliance with policies and procedures.
- B. Accuracy of reports on the source and use of funds.
- C. Extent of achievement of the organization's mission.
- D. Appropriateness of procedures related to the budgeting process.
Answer: C
NEW QUESTION # 266
An audit of the quality control department is being planned. Which of the following would least likely be used in the preparation of a preliminary survey questionnaire?
- A. An analysis of quality control documents.
- B. The permanent audit file.
- C. The prior audit report.
- D. Management's charter for the quality control department.
Answer: A
Explanation:
Section: Volume A
NEW QUESTION # 267
Using the internal audit department to coordinate regulatory examiners' efforts is beneficial to the organization because internal auditors can:
- A. Influence regulatory interpretation of law to better match corporate practice.
- B. Recommend changes to the scope of the regulatory examiners' review.
- C. Perform fieldwork for the regulatory examiners and thus shorten the regulatory examiners' review.
- D. Supply evidence of adequate compliance testing through internal audit workpapers and reports.
Answer: D
Explanation:
Section: Volume B
NEW QUESTION # 268
Which of the following scenarios provides the most concerning red flag or indicator of possible fraud?
- A. During the past 18 months three chief financial officers have left the organization after having been promoted to the position
- B. An employee receives a bonus for perfect attendance
- C. Three competitors are highly profitable but a fourth equal in size is approaching bankruptcy limits
- D. The organization does not perform any due diligence research on third party service providers
Answer: A
NEW QUESTION # 269
Which of the following statements is true regarding an organization's code of ethics?
- A. It should require an annual attestation of compliance with the code of conduct by all employees.
- B. It should be written with primary consideration given to using a rule-based approach.
- C. Its operational effectiveness cannot be tested using traditional audit and rating systems such as maturity models.
- D. It should be of two variations: one applicable internally and one applicable for third parties.
Answer: A
Explanation:
An organization's code of ethics typically requires an annual attestation of compliance with the code of conduct by all employees. This practice helps reinforce the importance of ethical standards and ensures that all employees are regularly reminded of their ethical obligations. It is a common element in effective ethics programs, serving both as a reminder and a mechanism for enforcing the code.References: Best practices in corporate governance and ethics.
NEW QUESTION # 270
Auditors 1, 2, and 3 work out of various offices. Each must be assigned to one, and only one, of three audit locations (A, B, or C). The cost of sending each auditor to each location is listed below:
Audit Locations
Auditor 1 A B
Auditor 2 $200 $300 $400
Auditor 3 $400 $300 $600
Auditor 4 $200 $200 $500
The minimum cost with which this assignment can be accomplished is:
- A. $1,000
- B. $800
- C. $1,100
- D. $900
Answer: D
NEW QUESTION # 271
Which of the following best describes the risk contained in an initial public offering for a new stock?
- A. Net risk
- B. Residual risk
- C. Underlying risk
- D. Inherent risk
Answer: D
NEW QUESTION # 272
A chief audit executive assigned an internal auditor to perform an assurance engagement. The auditor concluded with a major audit finding based on hearsay evidence Which of the following competencies did the auditor appear to be lacking?
- A. Risk-based assurance knowledge
- B. Demonstration of ethical behavior
- C. Demonstration of due professional care.
- D. Effective communication skills
Answer: C
Explanation:
If an auditor concluded a major audit finding based on hearsay evidence, it indicates a lack of demonstration of due professional care. Due professional care requires that conclusions be based on evidence that is sufficient, reliable, relevant, and useful to support audit findings and recommendations. Relying on hearsay does not meet these criteria and undermines the audit's reliability and credibility.References: IIA standards related to due professional care, which dictate that internal auditors must gather adequate factual evidence to support their findings and conclusions.
NEW QUESTION # 273
A chief audit executive (CAE) is concerned that the internal audit activity is not receiving adequate training and continuing education. Which of the following approaches should the CAE take?
- A. Create a formal development agreement with each individual staff auditor.
- B. Implement a uniform professional development plan for the internal audit activity.
- C. Require each internal auditor to obtain the same professional certifications.
- D. Require training and developmental activities that are sponsored by The IIA.
Answer: B
NEW QUESTION # 274
Which of the following are considered root causes of fraud?
- A. Opportunity and perceived need
- B. Corruption and opportunity
- C. Rationalization and corruption
- D. Perceived need and weak internal controls
Answer: A
Explanation:
According to fraud theory, specifically the Fraud Triangle, the root causes of fraud are typically identified as opportunity, rationalization, and perceived need (or pressure). Among the options given, "Opportunity and perceived need" most closely align with two of these three key elements. Opportunity provides the means to commit fraud, while perceived need motivates the individual to justify fraudulent actions.
Association of Certified Fraud Examiners (ACFE) - Fraud Triangle Theory
NEW QUESTION # 275
According to the Standards, a review team must express an opinion on which of the following when performing an external assessment of an internal audit activity?
Conformance with the Standards and IIA Code of Ethics.
Effectiveness of continuous improvement activities.
Feedback from internal audit customers and other stakeholder groups.
Efficiency and effectiveness of the internal audit activity's administration processes.
- A. 3only
- B. 1 and 2only
- C. 2 and 4only
- D. 1only
Answer: D
NEW QUESTION # 276
According to IIA guidance, which of the following activities would typically be examined when using the maturity model approach for assessing an organization's risk management program?
- A. Setting the context.
- B. Communication.
- C. Monitor and review.
- D. Performance measurement.
Answer: C
Explanation:
When using the maturity model approach for assessing an organization's risk management program, the activity of "monitor and review" is typically examined. The maturity model approach evaluates the development and effectiveness of risk management practices over time, identifying areas for improvement and measuring progress against established benchmarks.
Monitoring and reviewing involve regularly assessing the risk management processes and outcomes to ensure they remain effective and are continuously improved. This includes evaluating the implementation of risk management strategies and making necessary adjustments based on performance and changing conditions.
References:
* IIA Practice Guide: Assessing the Adequacy of Risk Management Using ISO 31000
* COSO Enterprise Risk Management Framework
NEW QUESTION # 277
Which of the following is a weakness of observation as audit evidence?
- A. It cannot be used to test the completeness assertion.
- B. It cannot be used to test the occurrence assertion.
- C. It cannot be relied upon because the evidence is not persuasive.
- D. It cannot be used to test the existence assertion.
Answer: A
Explanation:
Section: Volume F
NEW QUESTION # 278
Management is installing security cameras to identify unauthorized physical access to the organization's warehouse. This is an example of which of the following types of controls?
- A. Detective controls.
- B. Key controls.
- C. Primary controls.
- D. Preventive controls
Answer: A
NEW QUESTION # 279
Which of the following should the internal audit activity establish to ensure auditors develop the appropriate skills for conducting audits?
- A. An audit charter that includes the internal audit activity mission and vision
- B. An internal audit plan that links engagements to strategic objectives
- C. A quality assurance and improvement program to address audit risk areas
- D. A policy encouraging audit staff to earn certifications
Answer: D
Explanation:
To ensure that auditors develop the appropriate skills for conducting audits, the internal audit activity should encourage continuous professional development and may institute policies promoting certification attainment.
This approach directly supports the development of a proficient audit team equipped with the necessary skills and knowledge to conduct effective audits. Policies that encourage earning certifications such as Certified Internal Auditor (CIA), Certified Information Systems Auditor (CISA), etc., directly contribute to this objective by setting professional development as a priority within the audit function.
The IIA's Guidelines on Continuing Professional Development and Standards for the Professional Practice of Internal Auditing
NEW QUESTION # 280
In order to ensure that the internal auditors have the objectivity required by the Standards, the chief audit executive should:
- A. Require all auditors to sign statements attesting to their independent mental attitudes and honest belief in their work product.
- B. Carefully assign personnel to individual audit engagements and require auditors to disclose all conflicts of interest.
- C. Appraise each auditor's performance on each audit assignment.
- D. Demonstrate willingness to include in engagement final communications all matters believed to be important.
Answer: B
NEW QUESTION # 281
Which of the following is a role of the board of directors in the governance process?
- A. Review and approve operational goals and objectives.
- B. Conduct periodic assessments of the organization's governance systems.
- C. Implement an effective system of internal controls to support the organization's governance systems.
- D. Obtain assurance concerning the effectiveness of the organization's governance systems.
Answer: D
Explanation:
Section: Volume A
Explanation
NEW QUESTION # 282
Which of the following is a detective control strategy against fraud?
- A. Implementing a control self-assessment.
- B. Performing a surprise audit
- C. Performing background checks on employees.
- D. Requiring employees to attend ethics training.
Answer: B
Explanation:
Performing a surprise audit is a detective control strategy against fraud. Surprise audits can uncover irregularities and fraudulent activities that might not be detected through routine audit procedures. By their unexpected nature, they can serve as a deterrent against fraud and help identify breaches in internal controls.
References: IIA guidance on control activities and fraud prevention
NEW QUESTION # 283
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