[Free] Download New Updated (October 2016) IIA IIA-CIA-Part1 Real Exam 91-100

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QUESTION 91

In publicly held companies, management often requires the internal audit activity’s involvement with quarterly financial statements that are made public and used internally. Which of the following is generally not a reason for such involvement?

 

A.

Management may be concerned about its reputation in the financial markets.

B.

Management may be concerned about potential penalties that could occur if quarterly financial statements are misstated.

C.

The Standards state that internal auditors should be involved with reviewing quarterly financial statements.

D.

Management may perceive that having quarterly financial information examined by the internal auditors enhances its value for internal decision making.

 

Correct Answer: C

 

 

QUESTION 92

Which of the following lists the audit activities in the order in which they would generally be completed during a preliminary survey?

 

I. Write detailed audit procedures.

 

II. Identify client objectives,goals,and standards.

 

III. Identify risks and controls intended to prevent associated losses.

 

IV. Determine relevant engagement objectives.

 

A.

II, I, IV, III.

B.

II, III, IV, I.

C.

III, IV, II, I.

D.

II, IV, I, III.

 

Correct Answer: B

QUESTION 93

Which is the least effective form of risk management?

 

A.

Systems-based preventive control.

B.

People-based preventive control.

C.

Systems-based detective control.

D.

People-based detective control.

 

Correct Answer: D

 

 

QUESTION 94

When internal auditors perform consulting services that add value and improve an organization’s operations, these services:

 

A.

Impair the internal auditors’ objectivity with respect to an assurance service involving the same engagement client.

B.

Would preclude the achievement of assurance from the consulting engagement.

C.

Should be consistent with the internal audit activity’s empowerment reflected in the charter.

D.

Impose no responsibility to communicate information other than to the engagement client.

 

Correct Answer: C

 

 

QUESTION 95

An audit to test the system of controls over the purchase, distribution,and use of radioactive material is being conducted at a company’s plants. The process is well documented, and employees in the safety department are very familiar with the department’s procedures. Since the purchasing and facilities departments are involved in the process, the auditor is considering reviewing their radioactive material-handling procedures as well. The auditor should:

 

A.

Have confidence in the rigorous and detailed safety department procedures, since that department has the main responsibility for radiation safety, and should not use audit time to review other departments.

B.

Adjust the engagement schedule and budget, if needed, and interview the appropriate individuals in the purchasing and facilities departments to ascertain whether additional controlsexist that complement those identified within the safety department.

C.

Test the controls identified within the safety department; if results are unfavorable, the auditor should consider whether to involve the other departments.

D.

Defer questions regarding purchasing, facilities, and other departments until audit projects can be scheduled for those departments.

 

Correct Answer: B

 

 

QUESTION 96

In a manufacturing organization, all sales prices are determined centrally and are electronically sent to the distribution centers to update their sales price tables. Any pricing deviations must beapproved by central headquarters. To determine how this process is functioning, an internal auditor should:

 

A.

Document the flow of sales price information,and determine how the table is accessed and updated.

B.

Develop a flowchart of the sales order process to determine how orders are taken and priced.

C.

Identify who approves the shipment of goods and how the goods are priced.

D.

Obtain a copy of the existing flowchart for the computer program to determine how price data are accessed.

 

Correct Answer: A

 

 

QUESTION 97

Which of the following is an appropriate role for the board in governance?

 

A.

Preparing written organizational policies that relate to compliance with laws, regulations, ethics, and conflicts of interest.

B.

Ensuring that financial statements are understandable, transparent, and reliable.

C.

Assisting the internal audit activity in performing annual reviews of governance.

D.

Working with the organization’s attorneys to develop a strategy regarding current litigation, pending litigation, or regulatory proceedings governance.

 

Correct Answer: B

 

 

QUESTION 98

Which of the following statements regarding segregation of duties is true?

 

A.

When evaluating an organization’s policy on segregation of duties, employee competence does not need to be considered.

B.

An organizational chart provides an accurate definition of segregation of duties.

C.

A restrictive segregation-of-duties policy can help improve an organization’s communication.

D.

Policies on segregation of duties in information systems must recognize the difference between logical and physical access to assets.

 

Correct Answer: D

 

 

QUESTION 99

A manufacturing firm uses hazardous materials in the production of its products. An audit of the firm’s processes relate
d to hazardous materials shouldinclude.

 

I. Recommending an environmental management system as part of policies and procedures.

 

II. Verifying the existence of tracking records for these materials from creation to destruction.

 

III. Using consultants to avoid self-incrimination of the firm in the event illegalities were detected in an environmental audit.

 

IV. Evaluating the cost provided for in an environmental liability accrual account.

 

A.

II only

B.

III and IV only

C.

I, II, and IV only

D.

I, III, and IV only

 

Correct Answer: C

 

 

QUESTION 100

To promote a positive image within an organization,a chief audit executive (CAE) adjusted the audit plan to focus on assurance engagements that highlighted potential costs to be saved. Negative observations were to be omitted from engagement final communications. Which action taken by the CAE would be considered a violation of the Standards?

 

I. The focus of the audit function was changed without modifying the audit charter or notifying the audit committee.

 

II. Negative observations were omitted from the engagement final communications.

 

III. Cost savings and recommendations were highlighted in the engagement final communications.

 

A.

II only

B.

I and II only

C.

I and III only

D.

I, II, and III.

 

Correct Answer: B

 

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