Certified Internal Auditor - EXAM QUESTIONS AND ANSWERS
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Course
FINANCE
Institution
FINANCE
4. Volume D
5. Volume E
6. Volume F
Exam A
QUESTION 1
An organization has a policy requiring two signatures on all checks written for amounts in excess of $10, 000. When evaluating controls over disbursements, an auditor would conclude that a greater risk exists if.
A. The auditor located tw...
Number: IIA-CIA-Part1
Passing Score: 800
Time Limit: 120 min
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IIA-CIA-Part1
Certified Internal Auditor - Part 1, The Internal Audit Activity's Role in Governance, Risk, and Control
Sections
1. Volume A
2. Volume B
3. Volume C
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,4. Volume D
5. Volume E
6. Volume F
Exam A
QUESTION 1
An organization has a policy requiring two signatures on all checks written for amounts in excess of $10, 000. When evaluating controls over disbursements, an
auditor would conclude that a greater risk exists if.
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A. The auditor located two checks for $9, 000 each that contained one authorized signature.
B. The $10, 000 was an immaterial amount to the organization and very few cash disbursements required an amount in excess of $10, 000.
C. The director of accounting was not one of the authorized signers.
D. There were several instances in which successively numbered checks for amounts between $5, 000 and $10, 000 were made payable to the same vendor.
Correct Answer: D
Section: Volume A
Explanation
Explanation/Reference:
QUESTION 2
Which of the following is not an appropriate type of coordination between the internal audit activity and regulatory auditors?
A. Regulatory auditors share their perspective on risk management, control, and governance with the internal auditors.
B. Internal auditors perform fieldwork at the direction of the regulatory auditors.
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,C. Internal auditors review copies of regulatory reports in planning related internal engagements.
D. Regulatory and internal auditors exchange information about planned activities.
Correct Answer: B
Section: Volume A
Explanation
Explanation/Reference:
QUESTION 3
Which of the following activities most significantly increases the risk that a bank will make poor-quality loans to its customers?
A. Borrowers may not sign all required mortgage loan documentation.
B. Fees paid by the borrower at the time of the loan may not be deposited in a timely manner.
C. The bank's loan documentation may not meet the government's disclosure requirements.
D. Loan officers may override the lending criteria established by senior management.
Correct Answer: D
Section: Volume A
Explanation
Explanation/Reference:
QUESTION 4
An organization that outsources much of its internal audit work to an external service provider is planning for an external quality assessment. Which of the following
options would accomplish this task and be in conformance with the Standards?
A. External industry associate that performed a similar review for a supplier of the organization.
B. A team from an independent entity that previously employed the chief audit executive of the organization.
C. A team under the direction of the organization's chief audit executive with validation by a former manager of the internal audit activity.
D. The same external service provider because of its competency and experience with the organization.
Correct Answer: A
Section: Volume A
Explanation
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, Explanation/Reference:
QUESTION 5
Which of the following would not be a factor for senior management to consider when determining the internal audit activity's role in an organization's risk
management process?
A. The extent to which the internal audit activity is outsourced.
B. The maturity level of risk management practices in the organization.
C. The competency of the internal auditors in risk management.
D. The nature of the business and the environment in which the organization operates.
Correct Answer: A
Section: Volume A
Explanation
Explanation/Reference:
QUESTION 6
Which of the following best describes the underlying premise of the COSO enterprise risk management framework?
A. Management should set objectives before assessing risk.
B. Every entity exists to provide value for its stakeholders.
C. Policies are established to ensure that risk responses are performed effectively.
D. Enterprise risk management can minimize the impact and likelihood of unanticipated events.
Correct Answer: B
Section: Volume A
Explanation
Explanation/Reference:
QUESTION 7
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?
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