IIA-CIA-Part1 Practice Questions

A.  

Risk appetite applies to specific objectives, while risk tolerance refers to an organization ' s general attitude toward risk,

B.  

Risk appetite refers to the degree of risk acceptance for a particular objective, while risk tolerance is one approach to risk management.

C.  

Risk appetite refers to an organization ' s general level of acceptance, while risk tolerance is a more specific and subordinate concept.

D.  

There is no significant difference between the two terms.

A.  

To evaluate an organization s governance processes for making strategic and operational decisions eternal auditors should review the organization s policies and processes related to staff compensation

B.  

To determine how an organization provides oversight of its risk management and control activities internal auditors should review board meeting minutes and the board policy manual

C.  

To assess how an organization promotes ethics and values both internally and among its external business partners, internal auditors should review the organization ' s related objectives programs and activities

D.  

To evaluate how an organization ensures effective performance management and accountability internal auditors should review previously conducted risk assessments

A.  

Appoint the chief audit executive as a member of the board.

B.  

Adopt written policies and procedures for the internal audit activity, approved by the board.

C.  

Ensure the chief audit executive reports administratively to the audit committee.

D.  

Establish the internal audit activity’s position within the organization in an audit charter.

A.  

Review the organization ' s ethical value structure and reporting procedures.

B.  

Review what the organization considers to be ethical behavior, such as the employee code of conduct.

C.  

Review employee survey responses and follow up on those that suggest weaknesses in the ethical climate.

D.  

Review the organization ' s records to ensure all employees have signed statements that they will follow ethical practices.

A.  

The board should ask the internal audit activity to perform additional assurance engagements.

B.  

A comprehensive fraud risk assessment and management program should be carried out.

C.  

The organization should conduct training sessions on fraud, which should be attended by senior management and staff.

D.  

Anti-fraud and whistleblowing policies should be implemented and their importance should be clearly stated.

A.  

Consulting engagements typically involve four or five parties: the internal audit activity, engagement client, senior management, board, and sometimes the external auditor.

B.  

The scope of a consulting engagement is determined by either the engagement supervisor or chief audit executive, and it is finalized prior to beginning fieldwork.

C.  

According to the Standards, internal auditors are permitted to carry out certain management functions during a consulting engagement.

D.  

A preliminary risk assessment may not be needed for consulting engagements, because the expectations and objectives of the engagement are determined by the engagement client.

A.  

The identified risks have not undergone a detailed review to ensure completeness in the past two years.

B.  

The controls in place to mitigate the risks are not tested on an annual basis to confirm operating effectiveness.

C.  

The process in place to identify and evaluate new risks to the organization is informal and poorly documented.

D.  

The identified risks have not been ranked to establish their importance and risk management priority.

A.  

Assurance engagements for functions over which the chief audit executive (CAE) has responsibility are overseen by a party outside the internal audit activity

B.  

Internal auditors provide consulting services relating to operations for which they had previous responsibilities

C.  

Internal auditors provide consulting services relating to operations for which they have current responsibilities

D.  

Consulting engagements for functions over which the CAE has responsibility are overseen by a party outside the internal audit activity

A.  

Net.

B.  

Controllable.

C.  

inherent,

D.  

Residual.

A.  

Planning an engagement of the area in which fraud is suspected.

B.  

Employing audit tests to detect fraud.

C.  

Interrogating a suspected fraudster

D.  

Completing a process review to improve controls to prevent fraud

A.  

Consider the scope of work and level of responsibility when establishing criteria for education and experience in filling internal audit positions.

B.  

Ensure that each newly hired auditor is qualified in all of the disciplines needed to accomplish the department’s audit mission.

C.  

Oversee a training program that matches the actual training provided with the interests of individual auditors.

D.  

Require all of the audit staff to pursue a minimum number of continuing professional education hours each year

A.  

The ability to inspire trust

B.  

The ability to communicate effectively

C.  

The ability to display courage

D.  

The ability to understand the needs of stakeholders

A.  

Requiring employees to attend ethics training.

B.  

Performing background checks on employees.

C.  

Implementing a control self-assessment.

D.  

Performing a surprise audit

A.  

1,2, and 3,

B.  

1 2, and 4.

C.  

1, 3, and 4.

D.  

2, 3, and 4.

A.  

Internal auditors ensure that the work program is appropriately designed in order to identify all of the risks surrounding the payroll process.

B.  

Internal auditors determine whether the policies, procedures, and practices of the payroll department are operating in accordance with relevant laws.

C.  

Internal auditors verify whether the board of directors has implemented effective internal controls over the processes used by the payroll department.

D.  

Internal auditors ask the organization ' s risk manager to determine whether the degree of work planned is sufficient to determine whether payroll payments were complete and accurate.