[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 151-160

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QUESTION 151

An internal audit activity encounters a scope limitation from senior management that will affect its ability to meet its goals and objectives for a potential engagement client. The nature of the scope limitation shouldbe.

 

A.

Noted in the audit workpapers, but the engagement should be carried out as scheduled, with any necessary adjustments made based on the scope limitation.

B.

Communicated to the external auditors so that they can investigate the area in more detail.

C.

Communicated,preferably in writing, to the board.

D.

Communicated to management, stating that the limitation will not be accepted because it would impair the audit activity’s independence.

 

Correct Answer: C

 

 

QUESTION 152

It is important for a chief audit executive to seek formal approval from the board regarding an internal audit charter so that:

 

A.

The effectiveness of the internal audit activity can be measured.

B.

The status of the internal audit activity can be more clearly established.

C.

There is assurance that all internal audit activities will be completed.

D.

Improvements can be implemented in internal audit processes.

 

Correct Answer: B

 

 

QUESTION 153

An organization receives the most value from an internal audit activity’s enterprise-wide risk assessment when the auditor:

 

A.

Focuses primarily on enterprise-level risks.

B.

Considers activities at all levels of the organization.

C.

Reviews special projects and new initiatives.

D.

Validates supporting financial and operational data.

 

Correct Answer: B

 

 

QUESTION 154

In selecting an instructional strategy for developing internal audit staff,a chief audit executive should first review the:

 

A.

Department’s budget constraints.

B.

Internal auditors’ personal development needs.

C.

Content of potential training courses.

D.

Organization’s objectives.

 

Correct Answer: D

 

 

 

 

QUESTION 155

A major difference between enterprise risk management and traditional risk management lies in the narrow focus of traditional risk management on:

 

I. Property and liability risks.

 

II. Risks with insurance solutions.

 

III. Risks impacting organizational objectives.

 

A.

I and II only

B.

I and III only

C.

II and III only

D.

I, II, and III.

 

Correct Answer: A

 

 

QUESTION 156

Which of the following actions by a chief audit executive would be most effective in preventing fraud?

 

A.

Ensure that the board is aware of all fraud that has been identified or reported.

B.

Train the internal audit staff in identifying fraud indicators.

C.

Review the adequacy of all policies that describe prohibited activities.

D.

Submit an annual report to the board on all fraud that has been detected.

 

Correct Answer: C

 

 

QUESTION 157

According to the International Professional Practices Framework, risk is:

 

I. Defined as the negative effect of events that are expected to occur.

 

II. Measured in terms of consequences.

 

III. Measured in terms of likelihood.

 

A.

I only

B.

I and II only

C.

II and III only

D.

I, II, and III.

 

Correct Answer: C

 

 

QUESTION 158

A chief audit executive used risk assessment to prepare the audit work schedule. Which of the following would be the least appropriate reason to modify the schedule?

 

A.

Need for coordination of audit activities with the external auditors.

B.

Request for postponement since the audit would be too complicated.

C.

Change in the relative risk of auditable activities during the year.

D.

Budget constraints or expansions.

 

Correct Answer: B

 

 

QUESTION 159

Which of the following audit findings would have the least impact (either positive or negative) on a department’s control environment?

 

A.

The department makes long-term investment risk decisions to maximize return on investment.

B.

The department manager sets and demonstrates a tone of honesty and integrity in all business dealings.

C.

Many department functions are duplicated or verified by other department employees.

D.

Deficiencies were found in the appropriate authorization of transactions.

 

Correct Answer: A

 

 

QUESTION 160

A chief audit executive would most likely use risk assessment for audit planning because it provides:

 

A.

A systematic process for assessing and integrating professional judgment about probable adverse conditions.

B.

A listing of potentially adverse effects on the organization.

C.

A list of auditable activities in the organization.

D.

The probability that an event or action may adversely affect the organization.

 

Correct Answer: A

 

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