[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 11-20

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QUESTION 11

In order to save time, an audit manager no longer required that a standard internal control questionnaire be completed for each audit engagement. Does this represent a violation of the Standards?

 

A.

Yes, because internal control should be evaluated on every engagement and the internal control questionnaire is the mandated approach to evaluate controls.

B.

Yes, because internal control should be evaluated on every engagement and the internal control questionnaire is the most efficient method to do so.

C.

No, because auditors may omit necessary procedures if there is a time constraint, based on audit judgment.

D.

No, because auditors are not required to complete internal control questionnaires on every engagement.

 

Correct Answer: D

 

 

QUESTION 12

If earnings on financial statements for internal use only have been manipulated in the past, an internal auditor is likely to focus on which of the following?

 

A.

The proper accrual of payables at the end of the interim period.

B.

The timing of revenue recognition and the valuation of inventories.

C.

Whether accounting estimates are reasonable given past actual results.

D.

Whether there have been changes in accounting principles that materially affect the financial statements.

 

Correct Answer: B

 

 

QUESTION 13

The chief audit executive’s responsibility regarding control processes includes:

 

A.

Assisting senior management and the audit committee in the development of an annual assessment about internal control.

B.

Overseeing the establishment of internal control processes.

C.

Maintaining the organization’s governance processes.

D.

Ensuring that the internal audit activity assesses all control processes annually.

 

Correct Answer: A

 

 

QUESTION 14

Fraud is most frequently detected by:

 

A.

Following up on tips from employees or citizens.

B.

Following up on analytical review of high-risk areas.

C.

Performing periodic reconciliations over cash and other assets.

D.

Performing unannounced audits or reviews of programs or departments.

 

Correct Answer: A

 

 

QUESTION 15

An auditor is using audit software to check inventory accuracy. Which of the following would be an indicator of poor input edit controls?

 

A.

Negative quantities on hand.

B.

Total dollar values of zero for some parts.

C.

Alpha characters in the field for order lead time.

D.

Reorder levels set too high.

 

Correct Answer: C

 

 

QUESTION 16

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.

 

Correct Answer: A

 

 

QUESTION 17

After several years in the engineering department, an engineer was transferred to the internal audit department. One month later, the new auditor was assigned to an assurance engagement for the engineering department. When the auditor’s former engineering supervisor suggested a change in the sample selection method, the auditor consulted with the audit supervisor. They determined that the suggested method would not be as representative and that the original selection method should be used. In this situation, the auditor:

 

A.

Maintained an independent mental attitude and is therefore objective.

B.

Has subordinated professional judgment,and objectivity is therefore impaired.

C.

Does not have objectivity since the auditor recently transferred from the engineering department.

D.

Does not have independent organizational status since the auditor recently transferred from the engineering department.

 

Correct Answer: C

 

 

QUESTION 18

Which of the following components influences the risk consciousness of an organization’s people and is the basis for all other components of enterprise risk management?

 

A.

Objective setting.

B.

Information and Communication.

C.

Risk Assessment.

D.

Internal Environment.

 

Correct Answer: D

 

 

QUESTION 19

A code of business conduct provides?

 

A.

A fraud avoidance plan that does not explicitly describe punishments for violations.

B.

A passive method of fraud deterrence.

C.

A program to anonymously report irregularities to authorities.

D.

An alternative to “tone at the top” programs.

 

Correct Answer: B

 

 

QUESTION 20

Which of the following is not an appropriate control related to sales in a manufacturing company?

 

A.

Customers’ orders are recorded promptly.

B.

Goods shipped are matched with valid customer orders.

C.

Goods returned are inspected for damage by the sales department and then entered into inventory.

D.

Credit department approval is required for credit sales transactions.

 

Correct Answer: C

 

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