[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 201-210

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QUESTION 201

Which of the following are appropriate responsibilities of the audit committee in relation to the chief audit executive (CAE)?

 

1. Approving the internal audit charter.

 

2. Approving decisions regarding the appointment and removal of the CAE.

 

3. Approving the risk management strategy for the organization.

 

4. Making appropriate inquiries of management and the CAE to determine whether there are inappropriate scope and resource limitations.

 

A.

1 and 2 only

B.

1, 2, and 3 only

C.

1, 2, and 4 only

D.

2, 3, and 4 only

 

Correct Answer: C

 

 

QUESTION 202

Which of the following is the most appropriate outcome measure for assessing safety operations?

 

A.

Number of inspections conducted.

B.

Tests made of equipment.

C.

Reduction in machine down time due to accidents.

D.

Number of operations observed.

 

Correct Answer: C

 

 

QUESTION 203

During an audit of a major contract,an internal auditor finds that actual hours and dollars billed are consistently at or near budgeted amounts. This condition is a red flag for which of the following procurement fraud schemes?

 

A.

Defective pricing.

B.

Cost mischarging.

C.

Fictitious vendor.

D.

Bid rotation.

 

Corre
ct Answer:
B

 

 

QUESTION 204

An employee who recently transferred into the internal audit activity has been assigned to audit the accounts payable system. Which function,if previously performed by this employee,would represent a conflict of interest?

 

A.

Monitoring the allowance for doubtful accounts.

B.

Writing procedures for the handling of duplicate payments.

C.

Signing timekeeping cards for subordinates.

D.

Reviewing shipping documents for accuracy.

 

Correct Answer: B

 

 

QUESTION 205

Which of the following is correct regarding the implementation of a quality assurance and improvement program for the internal audit function?

 

A.

The board has the primary responsibility for implementation of a robust quality assurance and improvement program for internal audit.

B.

An internal audit function that is fully complying with internal assessment of quality can confidently claim it is performing in conformity with the International Professional Practices Framework.

C.

The chief audit executive can establish a formal quality assurance and improvement program that is led by an audit manager.

D.

A quality assurance and improvement program is applicable depending on the size and complexity of the audit function.

 

Correct Answer: C

 

 

QUESTION 206

A retail sales company has discontinued a product that normally sold for $100. During the first month of a sale of the product, a 20 percent discount was given. Later that sale price was reduced by an additional 40 percent. What was the overall discount from the original selling price?

 

A.

60 percent.

B.

52 percent.

C.

48 percent.

D.

30 percent.

 

Correct Answer: B

 

 

QUESTION 207

An organization’s chief audit executive (CAE) has been asked to monitor and report on any violations of the organization’s code of conduct. The CAE should:

 

A.

Review and adjudicate all complaints.

B.

Lead the committee responsible for the oversight of the code.

C.

Develop specific procedures to ensure that the code is clearly communicated to all employees.

D.

Participate in an advisory capacity on the committee that adjudicates any violations.

 

Correct Answer: D

 

 

QUESTION 208

In which of the following circumstances is it apparent that the internal auditor exercised due professional care in carrying out his duties?

 

1. The internal auditor weighed the cost of the engagement against its potential benefits.

 

2. The internal auditor used anonymous information from a whistleblower to report the existence of fraudulent activity.

 

3. The internal auditor found minor and major instances of fraud and highlighted only the major instances in its report,in consideration of the board’s limited time.

 

4. The internal auditor decided to use new auditing software to assist with the statistical analysis required during the engagement.

 

A.

1 and 2 only

B.

2 and 3 only

C.

3 and 4 only

D.

1 and 4 only

 

Correct Answer: D

 

QUESTION 209

What is the primary purpose of a risk management program?

 

A.

Reduce risk to a tolerable level.

B.

Reduce all risks regardless of costs.

C.

Transfer all risks to external third parties.

D.

Identify every significant risk to avoid it.

 

Correct Answer: A

 

 

QUESTION 210

Which of the following is characteristic of embezzlement?

 

A.

Favors from a supplier that is attempting to gain advantage when selling its products.

B.

Unlawful conversion of assets that are in the possession of an employee.

C.

Misrepresentation of material facts in order to mislead others to part with something of value.

D.

Stealing of material of value by unknown persons from outside the organization.

 

Correct Answer: B

 

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