[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 311-320

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QUESTION 311

Which of the following is true regarding the purpose of the COSO enterprise risk management framework?

 

1. It is a process that is ongoing and flows throughout the organization.

 

2. It contributes to the formulation of the organization’s mission and vision.

3. It enables internal audit to provide reasonable assurance to an organization’s management and the board.

 

4. It enables the management of risks within an organization’s risk appetite.

 

A.

1, 2, and 3 only

B.

1, 2, and 4 only

C.

1, 3, and 4 only

D.

2, 3, and 4 only

 

Correct Answer: C

 

 

QUESTION 312

Which of the following statements about risk assessment is true?

 

A.

Risk assessment focuses on the quantitative evaluation of exposures.

B.

Risk assessment evaluates risk both on an inherent and residual basis.

C.

Risk assessment determines the organization’s tolerance for exposure.

D.

Risk assessment is the amount of inherent risk in a separately identifiable business entity.

 

Correct Answer: B

 

 

QUESTION 313

An internal auditor is testing,on a sample basis,whether invoices paid between January 1 and December 31 are supported by appropriately approved purchase orders. Over 25,000 invoices were paid during the fiscal year, which runs from the first of April to the end of March. The auditor sets the acceptable risk of assessing control risk too low at 5% and the tolerable deviation rate at 5%. The internal auditor consults the previous audit and sets the expected population deviation rate at 1%. Sample size (77) is selected from a table and rounded up to 80. No sample deviations were found. The upper deviation limit was 3.7%. Which of the following statements represents a valid conclusion regarding this information?

 

A.

I am 95% confident that the true, but unknown,population deviation rate is less than or equal to 3.7%. Results indicated that the sample size was too small, as no sample deviations were found.

B.

I am 95% confident that the actual population deviation rate is 3.7%. Since this is less than the tolerable deviation rate, quantitative attribute testing results indicate that the control is effective.

C.

I am 95% confident that the true, but unknown, population deviation rate is less than or equal to 3.7%. The quantitative attribute testing results indicate that the control is effective.

D.

I am 95% confident that the true, but unknown, population deviation rate is less than or equal to 3.7%. The quantitative attribute testing results indicate that the control is not effective.

 

Correct Answer: C

 

 

QUESTION 314

An internal auditor is researching the laws and regulations related to a city’s grant program. Which of the following procedures is least relevant to this task?

 

A.

Making inquiries of the audit committee about the nature of the grants.

B.

Reviewing prior-year workpapers and asking officials if there have been any changes.

C.

Reviewing applicable grant agreements.

D.

Discussing the matter with the city’s chief financial officer, legal counsel, or grant administrators.

 

Correct Answer: A

 

 

QUESTION 315

In order to be organizationally independent,the chief audit executive should report administratively to the [List A] and functionally to the [List B].

 

[List A]

 

[List B]

 

A.

Audit committee

Board of directors

B.

Chief executive officer

Board of directors

C.

Chief executive officer

Chief financial officer

D.

Audit committee

Chief financial officer

 

Correct Answer: B

 

 

QUESTION 316

Which of the following statements correctly describes how workpaper standards can improve the efficiency of internal audit operations?

 

A.

They require supervisors to provide written confirmation of the workpapers they review.

B.

They grant external parties approved by management access to workpapers.

C.

They mandate the workpaper retention period.

D.

They allow the design and content to vary depending on the nature of the engagement.

 

Correct Answer: D

 

 

QUESTION 317

An organization references a customer order with an approved customer file and credit limit before accepting an order. Which type of control does this process exemplify?

 

A.

Quality control monitoring.

B.

Direct functional management.

C.

Information processing.

D.

Performance indicators.

 

Correct Answer: C

 

 

QUESTION 318

Which of the following statements regarding an internal auditor’s responsibility for detecting fraud is not correct?

 

A.

The auditor should have sufficient knowledge to detect red flags.

B.

The auditor may obtain assistance from outside experts in areas where the auditor is not sufficiently proficient.

C.

The auditor should identify control weaknesses which could allow fraud to occur.

D.

The auditor should detect fraud before recommending a fraud investigation should take place.

 

Correct Answer: D

 

 

QUESTION 319

An internal auditor is planning an operational audit of the accounts payable function. Which of the following best mitigates the risk of the organization being a victim of disbursement fraud by employees?

 

A.

Accounts payable payment records are checked against supplier invoices.

B.

Accounts payable are aged by vendors.

C.

The accounts payable trial balance is reconciled to the general ledger.

D.

The accounts payable function is properly segregated from the cash custody function.

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Correct Answer: D

 

 

QUESTION 320

An internal auditor has been engaged to assess fraud risks associated with a new financial software system. Which competency would best help the auditor complete the task?

 

A.

Expertise in identifying information technology risks.

B.

A thorough understanding of organizational governance principles.

C.

Proficiency in creating and utilizing process maps.

D.

Knowledge of key management and business principles.

 

Correct Answer: A

 

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