[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 371-380

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QUESTION 371

Which of the following is a limitation of using observation as a manual audit procedure?

 

A.

Observation provides information at a certain time and makes it difficult to draw representative conclusions.

B.

Observation is not as persuasive as inquiry due to a lack of direct evidence.

C.

Observation is performed specifically to test the validity of documented or recorded information.

D.

Observation may cause individuals to behave less critically or carefully if they are aware that other forms of manual audit procedures have already taken place.

 

Correct Answer: A

 

 

QUESTION 372

According to IIA guidance,which of the following best describes how risks are measured?

 

A.

Likelihood and probability.

B.

Impact and relevance.

C.

Velocity and rate of occurrence.

D.

Likelihood and impact.

 

Correct Answer: D

 

 

 

 

 

 

QUESTION 373

An internal auditor wants to use ratio analysis to examine efficiencies in an organization’s accounting department. Which of the following statements identifies a weakness of ratio analysis that should be considered by the auditor?

 

A.

It requires a substantial investment of money.

B.

It is only helpful for making comparisons across industries.

C.

Computer software is required in order to draw conclusions from the data.

D.

It utilizes financial information that may not have been checked for validity and reliability.

 

Correct Answer: D

 

 

QUESTION 374

An internal auditor obtains spreadsheets created by the finance department of an organization. The internal auditor contacts a third party about the source data that was utilized to create the spreadsheets before going on to perform a ratio analysis and a comparison of budget versus actual data. What is the most likely reason that the internal auditor involved a third party before performing further analysis?

 

A.

To determine if a later re-performance for testing mechanical accuracy would be possible.

B.

To confirm that the spreadsheets could be used as a source of analytic data.

C.

To determine what future usage limitations the spreadsheets might have.

D.

To obtain a reliable verification about the accuracy of the source data.

 

Correct Answer: D

 

 

QUESTION 375

According to the Standards, which of the following statements best describes the required content of the chief audit executive’s (CAE) report to senior management and the board on the internal audit activity (IAA)?

 

A.

The CAE must report on significant risk exposures, control issues, and governance issues.

B.

The CAE must report on policies, procedures, and best practices of the IAA.

C.

The CAE must report on quality assurance techniques, statistical analysis methods, and other analytical processes used.

D.

The CAE must report on auditors’ continuing education activities, staffing changes, and any outsourcing to external parties.

 

Correct Answer: A

 

 

QUESTION 376

Which type of documentary evidence gathered by an organization’s internal auditors has the highest level of reliability?< /span>

 

A.

Inventory test counts.

B.

Bank statements.

C.

Remittance advices.

D.

Written policy statements.

 

Correct Answer: A

QUESTION 377

According to the Standards, which of the following statements about effective governance is not true?

 

A.

It relies on internal controls to be effective.

B.

It considers risk when setting strategy.

C.

Its structures are distinct from risk management structures.

D.

It is implemented by the board or an equivalent body.

 

Correct Answer: C

 

 

QUESTION 378

Which of the following is a component of the internal audit value proposition endorsed by IIA guidance?

 

A.

Insight.

B.

Independence.

C.

Integrity.

D.

Competency.

 

Correct Answer: A

 

 

QUESTION 379

Which fraudulent act is designed primarily to benefit the organization?

 

A.

Fictitious sale or assignment of assets.

B.

Authorization of payment for hours not worked.

C.

Theft or misappropriation of funds.

D.

Acceptance of bribes or kickbacks.

 

Correct Answer: A

 

 

QUESTION 380

Which of the following activities would be most likely to impair the objectivity of an internal auditor?

 

A.

Performing reviews of procedures for a new information systems application before it is installed.

B.

Benchmarking controls during the development of a new information systems application.

C.

Assisting with the development and installation of a new information systems application.

D.

Developing recommended controls for the use of a new information systems application.

 

Correct Answer: C

 

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