[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 111-120

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QUESTION 111

Which of the following is most likely to be an element of an effective compliance program?

 

A.

The internal audit activity is assigned responsibility for overseeing the program.

B.

The program is communicated to employees in a video format on a one-time basis.

C.

The organization uses monitoring systems designed to detect improper activity.

D.

The organization obtains as much information as possible when performing background checks on employees.

 

Correct Answer: C

 

 

QUESTION 112

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.

 

Correct Answer: D

 

 

QUESTION 113

Continuing Professional Education (CPE) hours for Certified Internal Auditors may be achieved by:

 

A.

Attending audit staff meetings.

B.

Verifying that all completed audit tests are fully documented.

C.

Publishing an article on the company’s internal audit department.

D.

Obtaining experience on the job.

 

Correct Answer: C

 

 

QUESTION 114

When an external auditor unknowingly fails to modify an opinion on financial statements that are materially misstated,this is an exampleof:

 

A.

An inherent risk.

B.

A control risk.

C.

An audit risk.

D.

A residual risk.

 

Correct Answer: C

 

 

QUESTION 115

According to the Standards, which of the following must an internal auditor take into consideration when performing an assurance engagement of treasury operations?

 

I. The audit committee has requested assurance of the treasury department’s compliance with a new policy on the use of financial instruments.

 

II. Treasury management has not instituted any risk management policies.

 

III. Due to the recent sale of a division, the amount of cash and marketable securities managed by the treasury department has increased by 350 percent.

 

IV. The external auditors have indicated some difficulties in obtaining account confirmations.

 

A.

I and II only

B.

I and IV only

C.

I, II, and III only

D.

II, III, and IV only

 

Correct Answer: C

 

 

QUESTION 116

Internal auditors who are concerned with potential risks due to the mishandling of records or transactions should take into consideration:

 

A.

The type and nature of the activities to be examined.

B.

Whether employees in key positions of trust are bonded.

C.

The history of losses suffered by the company.

D.

The results of prior risk assessments.

 

Correct Answer: A

 

 

QUESTION 117

The primary objective of risk-based auditing is to assessthe:

 

A.

Economy of controls.

B.

Compliance with controls.

C.

Adequacy of controls.

D.

Efficiency of controls.

 

Correct Answer: C

 

 

QUESTION 118

The chief audit executive for an organization has just completed a risk assessment process, identified the areas with the highest risk, and assigned an audit priority to each. Which of the following statements is true and consistent with the International Professional Practices Framework?

 

I. Items should be ranked in the order of quantifiable dollar exposure to the organization.

 

II. The audit priorities should be in order of major control deficiencies.

 

III. The risk assessment, though quantified, is the result of professional judgments about both exposures and probability of occurrences.

 

A.

I only

B.

III only

C.

II and III only

D.

I, II, and III.

 

Correct Answer: B

 

QUESTION 119

Which of the following would be the most effective action for an internal audit activity to take in order to assist in improving an organization’s ethical climate?

 

I. Review formal and informal processes within the organization that could promote unethical behavior.

 

II. Conduct surveys of employees, suppliers, and customers regarding ethics.

 

III. Assess the employees’ knowledge of and compliance with the organization’s code of conduct.

 

A.

I only

B.

I and II only

C.

II and III only

D.

I, II, a
nd III.

 

Correct Answer: D

 

 

QUESTION 120

When reviewing management reports to the board of directors,the internal audit activity should:

 

A.

Evaluate the process used to prepare the management reports.

B.

Maintain supporting documentation for the management reports.

C.

Tie all financial numbers in the reports to the general ledger.

D.

Compare to prior-period reports for consistency.

 

Correct Answer: A

 

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