[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 161-170

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QUESTION 161

In order to effectively handle conflict between audit team members,an audit team leader should:

 

A.

Avoid addressing the conflict until the leader is sure that there is a problem.

B.

Be assertive and keep the team members focused on a resolution.

C.

Ask one of the team members to resolve the issue by being more conciliatory.

D.

Transfer one of the team members to another assignment.

 

Correct Answer: B

 

 

QUESTION 162

Which of the following is not true with regard to the internal audit charter?

 

A.

It defines the authorities and responsibilities of the internal audit activity.

B.

It specifies the minimum resources needed for the internal audit activity.

C.

It provides a basis for evaluating the internal audit activity.

D.

It should be approved by senior management and the board.

 

Correct Answer: B

 

QUESTION 163

The chairperson of an organization’s audit committee has obtained a risk management report that identifies significant industry concerns that impact the organization. The chairperson has asked the chief audit executive (CAE) to review these concerns and advise if they are relevant to the organization. How should the CAE respond?

 

A.

Accept the engagement but communicate only with the audit committee to protect the confidentiality of the request.

B.

Decline the engagement because it is outside of the scope of the internal audit charter.

C.

Decline the engagement because it impairs the internal audit activity’s independence.

D.

Accept the engagement but inform senior management of the request.

 

Correct Answer: D

 

 

QUESTION 164

Risk assessments are valuable to the internal audit activity’s planning process because they assist in:

 

A.

Eliminating all areas with low risk from the audit plan.

B.

Educating management on the importance of keeping the internal audit activity informed of organizational changes.

C.

Identifying the audit universe or auditable activities that need to be reviewed.

D.

Identifying risks that management and the internal auditors have overlooked.

 

Correct Answer: C

 

 

QUESTION 165

In the annual audit of the financial statements of a company with high inherent risk and a very strong control system, the external auditor may be able to allow detection risk to risebecause.

 

A.

Audit risk has been reduced.

B.

Control risk has been assessed at a lower level.

C.

The company’s operations are very susceptible to misstatements.

D.

Whenever inherent risk is high,control risk is disregarded.

 

Correct Answer: B

 

 

QUESTION 166

A tax consultancy agency retains sensitive personal information regarding its clients. Which of the following is a violation of acceptable privacy practices?

 

A.

Copies of printed client information not used by the agency are shredded.

B.

Employees share client information with coworkers with the permission of the client.

C.

The agency only releases client information with management’s approval.

D.

The agency advises clients of their privacy rights before they commence business with the agency.

 

Correct Answer: C

 

 

QUESTION 167

Which of the following is a key performance indicator for an internal audit function?

 

A.

Audit expenditures compared to financial budgets.

B.

Percent of required continuing education hours completed.

C.

Implementation of new audit computer software.

D.

Frequency of meetings with the board members.

 

Correct Answer: B

 

 

QUESTION 168

A dental insurance provider has implemented an electronic claim submission process and is concerned that dentists are submitting claims for services that were not provided. Which of the following control procedures would be most effective in preventing this type of fraud?

 

A.

Develop a program that identifies procedures performed on an individual which are either in excess of expectations based on the age of the insured or are similar to other procedures recently performed on the individual.

B.

Require all submitted claims to be followed by a signed statement by the dentist testifying to the fact that the claimed procedures were performed.

C.

Send confirmations to the dentists requesting them to confirm the exact nature of the claims submitted to the insurance provider.

D.

Develop an integrated test facility and submit false claims to verify that the system is detecting such claims on a consistent basis.

 

Correct Answer: A

 

 

QUESTION 169

To ensure that due professional care has been taken during an audit engagement,an internal auditor should always:

 

A.

Ensure that all financial information related to the engagement is included in the audit plan and examined for irregularities.

B.

Document all audit tests completely.

C.

Consider the possibility of noncompliance or irregularities at all times during an engagement.

D.

Notify the audit committee of any noncompliance or irregularity discovered during an engagement.

 

Correct Answer: C

 

 

QUESTION 170

The primary role of the internal audit activity in regard to an organization’s ethical climate is to:

 

A.

Participate as chief ethics officer.

B.

Periodically assess the ethical climate.

C.

Utilize surveys to evaluate employee ethics.

D.

Demonstrate ethical behavior.

 

Correct Answer: B

 

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