[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 21-30

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QUESTION 21

Which of the following characteristics could indicate high risk?

 

A.

Management decisions are made by a committee of mid to higher level management personnel.

B.

The company is not in a rapidly growing industry.

C.

The company’s profitability is lower than the industry norm.

D.

Management turnover has been very low.

 

Correct Answer: C

 

 

QUESTION 22

Management has requested that an internal auditor serve as member of a task force that will review current receivables practices and make recommendations to improve processes. Which of the following is the most appropriate response by the internal auditor?

 

A.

Accept the assignment provided that such consulting services are defined in the charter.

B.

Decline the assignment because participation on task forces will impair the auditor’s objectivity in future audit engagements.

C.

Accept the assignment if the auditor believes that it will not impair objectivity in future audit engagements.

D.

Do not accept the assignment because the assignment is not part of an approved audit plan.

 

Correct Answer: A

 

 

QUESTION 23

An internal auditor is assigned to conduct an audit of security for a local area network (LAN) in the finance department of the organization. Investment decisions, including the use of hedging strategies and financial derivatives, use data
and financial models which run on the LAN. The LAN is also used to download data from the mainframe to assist in decisions. Which of the following should be considered outside the scope of this security audit engagement?

 

A.

Investigation of the physical security over access to the components of the LAN.

B.

The ability of the LAN application to identify data items at the field or record level and implement user access security at that level.

C.

Interviews with users to determine their assessment of the level of security in the system and the vulnerability of the system to compromise.

D.

The level of security of other LANs in the company which also utilize sensitive data.

 

Correct Answer: D

 

 

 

 

 

 

 

QUESTION 24

A bakery chain has a statistical model that can be used to predict daily sales at individual stores based on a direct relationship to the cost of ingredients used and an inverse relationship to rainy days. What conditions would an auditor look for as an indicator of employee theft of food from a specific store?

 

A.

On a rainy day, total sales are greater than expected when compared to the cost of ingredients used.

B.

On a sunny day, total sales are less than expected when compared to the cost of ingredients used.

C.

Both total sales and cost of ingredients used are greater than expected.

D.

Both total sales and cost of ingredients used are less than expected.

 

Correct Answer: B

 

 

QUESTION 25

To identify those components of a telecommunications system that present the greatest risk, an internal auditor should first:

 

A.

Review the open systems interconnect network model.

B.

Identify the network operating costs.

C.

Determine the business purpose of the network.

D.

Map the network software and hardware products into their respective layers.

 

Correct Answer: C

 

 

QUESTION 26

Which of the following would be the least desirable criteria against which to judge current operations of a company’s treasury function?

 

A.

The operations of the treasury function as documented during the last audit engagement.

B.

Company policies and procedures delegating authority and assigning responsibilities.

C.

Finance textbook illustrations of generally accepted good treasury function practices.

D.

Codification of best practices of the treasury function in relevant industries.

 

Correct Answer: A

 

 

QUESTION 27

Which of the following actions would be considered a violation of the Standards?

 

I. Drafts of engagement communications were reviewed with the audit client to obtain input. The client’s comments were considered when developing the engagement final communication.

 

II. An auditor participated as part of a development team to review the control procedures to be incorporated into a major computer application under development.

 

III. Given limited resources, the chief audit executive performed a risk analysis to determine which functions to audit.

 

A.

II only

B.

I and III only

C.

I, II, and III.

D.

None of the above.

 

Correct Answer: D

 

 

QUESTION 28

Internal auditors exercise judgment about the type and amount of information to be collected. The primary purpose of this judgment is to:

 

A.

Eliminate the risk of drawing incorrect conclusions.

B.

Minimize the cost of the audit engagement.

C.

Comply with the Standards.

D.

Provide a sound basis for audit observations and recommendations.

 

Correct Answer: D


 

 

QUESTION 29

An organization’s accounts payable function improved its internal controls significantly after it received an unsatisfactory audit report. When planning a follow-up audit of the function, what level of detection risk should be expected if the audit and sampling procedures used are unchanged from the prior audit?

 

A.

Detection risk is lower because control risk is lower.

B.

Detection risk is lower because control risk is higher.

C.

Detection risk is higher because control risk is lower.

D.

Detection risk is unchanged although control risk is lower.

 

Correct Answer: D

 

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QUESTION 30

In order to ensure that the internal auditors have the objectivity required by the Standards, the chief audit executiveshould:

 

A.

Demonstrate willingness to include in engagement final communications all matters believed to be important.

B.

Require all auditors to sign statements attesting to their independent mental attitudes and honest belief in their work product.

C.

Carefully assign personnel to individual audit engagements and require auditors to disclose all conflicts of interest.

D.

Appraise each auditor’s performance on each audit assignment.

 

Correct Answer: C

 

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