Free Access IIA.IIA-CIA-Part1.v2024-09-23.q699 Practice Test (Page 2)

Question 1

An organization's board recommends revising the internal audit charter by adding requirements regarding the hiring and compensation of the chief audit executive as well as information on approving the internal audit budget. Which of the following is the board most likely defining in the charter?

A.Assurance and improvement of internal audit activity.

B.Functional and administrative responsibilities of internal audit activity.

C.Authority and objectivity of internal audit activity.

D.Independence and objectivity of internal audit activity.

Question 2

The chief audit executive (CAE) of a new internal audit activity is creating an internal audit charter According to IIA guidance, which of the following terms is most likely to
be included in the charter?

A.Internal auditors will demonstrate competence, concern, and the dedication expected of a professional,

B.Internal auditors will advise on the design of control policies and procedures in any area where the organization does not possess the requisite expertise,

C.Senior management will be present whenever the CAE interacts with the board, to ensure effective communication among all three parties.

D.Internal auditors will receive performance-based compensation, including bonuses for reporting more than a stipulated number of observations.

Question 3

Which of the following best describes the risk contained in an initial public offering for a new stock?

A.Residual risk.

B.Net risk.

C.Inherent risk.

D.Underlying risk.

Question 4

Which of the following situations would best indicate to the chief audit executive that one of the audit team members is struggling with application of due professional care?

A.According to the audit report, several control failures occurred due to irresponsible behavior of local management, who was consequently deprived of bonuses and wrote a negative feedback to the auditor

B.The engagement supervisor requests that an auditor carry out improvements to workpapers to address numerous problems: evidence is missing, references are incorrect, and conclusions are superfluous

C.The delivery of audit results was several weeks late because the internal auditor had to spend additional time trying to understand the nature of certain transactions with derivation.

D.Audit work was completed m accordance with the established goals; however, a material misstatement was later uncovered in the audited area by another assurance provider.

Question 5

Management has implemented a segregation-of-duties policy for handling inventory. Which of the following fraud risks would be more concerning to an internal auditor following the implementation of this new policy?

A.The risk of falsified reconciliations.

B.The risk of collusion between parties.

C.The risk of low-liquidity inventory.

D.The risk of damages to the inventory.

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