Practice Free IIA-CIA-Part1 Exam Online Questions
Question #134
Which feature should be enabled to reduce ARP broadcast traffic in an HPE network?
- A . ARP Suppression
- B . BPDU Guard
- C . VLAN pruning
- D . DHCP Snooping
Correct Answer: A
A
Explanation:
ARP Suppression minimizes ARP broadcasts by responding to ARP requests locally within a network segment.
A
Explanation:
ARP Suppression minimizes ARP broadcasts by responding to ARP requests locally within a network segment.
Question #2
To encourage internal audit objectivity, which of the following is an appropriate policy the chief audit executive should establish?
- A . Internal auditors should report their audit findings directly to the audit committee.
- B . To receive an outstanding performance rating, internal auditors are required to generate audit findings.
- C . Prior to hiring a new internal auditor, the chief audit executive must determine whether the auditor owns stock in the organization.
- D . Internal auditors are permitted to audit an entity managed by a close friend or relative, as long as they notify the chief audit executive.
Correct Answer: A
A
Explanation:
To encourage and maintain internal audit objectivity, it is crucial for internal auditors to have an independent reporting line, preferably directly to the audit committee. This policy helps minimize potential biases or influences from management and ensures that audit findings are communicated openly and transparently without fear of repercussion or conflict of interest, thereby safeguarding the objectivity of the audit function.
Reference: Institute of Internal Auditors (IIA) – International Standards for the Professional Practice of Internal Auditing
A
Explanation:
To encourage and maintain internal audit objectivity, it is crucial for internal auditors to have an independent reporting line, preferably directly to the audit committee. This policy helps minimize potential biases or influences from management and ensures that audit findings are communicated openly and transparently without fear of repercussion or conflict of interest, thereby safeguarding the objectivity of the audit function.
Reference: Institute of Internal Auditors (IIA) – International Standards for the Professional Practice of Internal Auditing
Question #2
To encourage internal audit objectivity, which of the following is an appropriate policy the chief audit executive should establish?
- A . Internal auditors should report their audit findings directly to the audit committee.
- B . To receive an outstanding performance rating, internal auditors are required to generate audit findings.
- C . Prior to hiring a new internal auditor, the chief audit executive must determine whether the auditor owns stock in the organization.
- D . Internal auditors are permitted to audit an entity managed by a close friend or relative, as long as they notify the chief audit executive.
Correct Answer: A
A
Explanation:
To encourage and maintain internal audit objectivity, it is crucial for internal auditors to have an independent reporting line, preferably directly to the audit committee. This policy helps minimize potential biases or influences from management and ensures that audit findings are communicated openly and transparently without fear of repercussion or conflict of interest, thereby safeguarding the objectivity of the audit function.
Reference: Institute of Internal Auditors (IIA) – International Standards for the Professional Practice of Internal Auditing
A
Explanation:
To encourage and maintain internal audit objectivity, it is crucial for internal auditors to have an independent reporting line, preferably directly to the audit committee. This policy helps minimize potential biases or influences from management and ensures that audit findings are communicated openly and transparently without fear of repercussion or conflict of interest, thereby safeguarding the objectivity of the audit function.
Reference: Institute of Internal Auditors (IIA) – International Standards for the Professional Practice of Internal Auditing
Question #2
To encourage internal audit objectivity, which of the following is an appropriate policy the chief audit executive should establish?
- A . Internal auditors should report their audit findings directly to the audit committee.
- B . To receive an outstanding performance rating, internal auditors are required to generate audit findings.
- C . Prior to hiring a new internal auditor, the chief audit executive must determine whether the auditor owns stock in the organization.
- D . Internal auditors are permitted to audit an entity managed by a close friend or relative, as long as they notify the chief audit executive.
Correct Answer: A
A
Explanation:
To encourage and maintain internal audit objectivity, it is crucial for internal auditors to have an independent reporting line, preferably directly to the audit committee. This policy helps minimize potential biases or influences from management and ensures that audit findings are communicated openly and transparently without fear of repercussion or conflict of interest, thereby safeguarding the objectivity of the audit function.
Reference: Institute of Internal Auditors (IIA) – International Standards for the Professional Practice of Internal Auditing
A
Explanation:
To encourage and maintain internal audit objectivity, it is crucial for internal auditors to have an independent reporting line, preferably directly to the audit committee. This policy helps minimize potential biases or influences from management and ensures that audit findings are communicated openly and transparently without fear of repercussion or conflict of interest, thereby safeguarding the objectivity of the audit function.
Reference: Institute of Internal Auditors (IIA) – International Standards for the Professional Practice of Internal Auditing
Question #5
What is the main difference between a consulting engagement versus an assurance engagement?
- A . The nature of services provided are defined in the internal audit charter.
- B . Internal auditors must maintain objectivity while performing their work.
- C . The objectives and scope of the engagement typically are directed by management.
- D . Internal auditors may assume management responsibilities.
Correct Answer: C
C
Explanation:
In a consulting engagement, the internal auditors collaborate with management to determine the objectives and scope. In contrast, for assurance engagements, the internal audit activity sets the objectives and scope independently to provide an unbiased assessment.
Reference: IIA Standard 2010: Planning.
IIA Practice Guide: Consulting Services.
C
Explanation:
In a consulting engagement, the internal auditors collaborate with management to determine the objectives and scope. In contrast, for assurance engagements, the internal audit activity sets the objectives and scope independently to provide an unbiased assessment.
Reference: IIA Standard 2010: Planning.
IIA Practice Guide: Consulting Services.
Question #6
In which of the following ways can a chief audit executive demonstrate to the board that the internal audit activity collectively possesses all of the skills needed to complete its annual goals?
- A . Involve board members in hiring activities and request advice.
- B . Require all internal audit staff to complete the same training course on a general audit subject,
- C . Require senior auditors to obtain a professional certification.
- D . Provide a competency assessment of the internal audit staff.
Correct Answer: D
D
Explanation:
The most effective way a chief audit executive (CAE) can demonstrate to the board that the internal audit team has the necessary skills to achieve its annual goals is through a competency assessment. This assessment measures and documents the collective skills and knowledge within the internal audit activity, ensuring they align with the requirements of the audit plan and the organization’s objectives. Competency assessments can identify gaps and provide a basis for training and development, making it an essential tool for demonstrating capability.
Reference: The Institute of Internal Auditors (IIA) – International Professional Practices Framework (IPPF)
D
Explanation:
The most effective way a chief audit executive (CAE) can demonstrate to the board that the internal audit team has the necessary skills to achieve its annual goals is through a competency assessment. This assessment measures and documents the collective skills and knowledge within the internal audit activity, ensuring they align with the requirements of the audit plan and the organization’s objectives. Competency assessments can identify gaps and provide a basis for training and development, making it an essential tool for demonstrating capability.
Reference: The Institute of Internal Auditors (IIA) – International Professional Practices Framework (IPPF)
Question #7
An internal auditor failed to identify transactions between the parent organization and a subsidiary.
What is the most likely reason for the failure?
- A . The auditor misunderstood the audit objectives.
- B . The auditor lacked professional skepticism.
- C . The auditor’s fieldwork was not properly supervised.
- D . The auditor lacked an understanding of the organization.
Correct Answer: D
D
Explanation:
One of the possible reasons for the failure to identify transactions between the parent organization and a subsidiary is that the auditor did not have sufficient knowledge of the group structure, the consolidation process, and the related party disclosure requirements2. The auditor should obtain an understanding of the entity and its environment, including its internal control, as part of the risk assessment procedures3. This would help the auditor to identify and assess the risks of material misstatement due to related party transactions, and design and perform appropriate audit procedures to address those risks4.
Reference: 1: IAS 24 ― Related Party Disclosures5, p. 1 2: Group audit issues | P7 Advanced Audit and Assurance | ACCA …2, p. 1 3: INTERNATIONAL STANDARD ON AUDITING 315 (REVISED) IDENTIFYING AND … – IFAC1, p. 1 4: ISA 550 Related Parties – IAASB, p. 1
D
Explanation:
One of the possible reasons for the failure to identify transactions between the parent organization and a subsidiary is that the auditor did not have sufficient knowledge of the group structure, the consolidation process, and the related party disclosure requirements2. The auditor should obtain an understanding of the entity and its environment, including its internal control, as part of the risk assessment procedures3. This would help the auditor to identify and assess the risks of material misstatement due to related party transactions, and design and perform appropriate audit procedures to address those risks4.
Reference: 1: IAS 24 ― Related Party Disclosures5, p. 1 2: Group audit issues | P7 Advanced Audit and Assurance | ACCA …2, p. 1 3: INTERNATIONAL STANDARD ON AUDITING 315 (REVISED) IDENTIFYING AND … – IFAC1, p. 1 4: ISA 550 Related Parties – IAASB, p. 1
Question #8
Which of the following is an example of a directive control?
- A . Segregation of duties.
- B . Exception reports.
- C . Training programs.
- D . Supervisory review.
Correct Answer: C
C
Explanation:
Training programs are an example of directive controls as they are designed to direct staff behaviors towards compliance with organizational policies and procedures. Directive controls guide or mandate specific behaviors to achieve desired outcomes, unlike preventive controls like segregation of duties, or detective controls like exception reports and supervisory review.
Reference: Internal control frameworks and definitions commonly used in internal auditing practices.
C
Explanation:
Training programs are an example of directive controls as they are designed to direct staff behaviors towards compliance with organizational policies and procedures. Directive controls guide or mandate specific behaviors to achieve desired outcomes, unlike preventive controls like segregation of duties, or detective controls like exception reports and supervisory review.
Reference: Internal control frameworks and definitions commonly used in internal auditing practices.
Question #9
The organization s procurement manager asks the internal auditor to deliver training to the procurement team on the organization’s third-party risk management process.
Which of the following is the most appropriate response?
- A . The internal auditor should reject the request it she previously worked in the procurement area to maintain objectivity
- B . The internal auditor should reject the request if the internal audit team does not have the requisite expertise.
- C . The internal auditor should accept the request and in fact she may assume some management responsibilities temporarily if the result is a relevant training benefit
- D . The internal auditor may accept the request only if she defines the scope to ensure conformance with the Code of Ethics
Correct Answer: D
D
Explanation:
According to the IIA’s Code of Ethics and professional standards, internal auditors must maintain their independence and objectivity. However, they can provide training or advisory services as long as it does not impair these qualities. In this case, the internal auditor can accept the request to deliver training on the organization’s third-party risk management process if she clearly defines the scope and ensures that it aligns with the principles of integrity, objectivity, confidentiality, and competency. This means the auditor should not take on management responsibilities and should ensure that the training is within the boundaries of providing advice and guidance without making decisions or taking actions on behalf of management.
Reference: IIA Code of Ethics
IIA Standard 1130: Impairment to Independence or Objectivity
D
Explanation:
According to the IIA’s Code of Ethics and professional standards, internal auditors must maintain their independence and objectivity. However, they can provide training or advisory services as long as it does not impair these qualities. In this case, the internal auditor can accept the request to deliver training on the organization’s third-party risk management process if she clearly defines the scope and ensures that it aligns with the principles of integrity, objectivity, confidentiality, and competency. This means the auditor should not take on management responsibilities and should ensure that the training is within the boundaries of providing advice and guidance without making decisions or taking actions on behalf of management.
Reference: IIA Code of Ethics
IIA Standard 1130: Impairment to Independence or Objectivity
Question #10
Which of the following is true about a system of internal control?
- A . Internal control should be updated at least annually.
- B . Technology does not change the internal control landscape.
- C . Strategy should fit the system of internal control.
- D . Articulating measurable objectives is part of internal control.
Correct Answer: D
D
Explanation:
The statement that articulating measurable objectives is part of internal control is true. A system of internal control is designed to help an organization achieve its objectives, and these objectives need to be clearly stated and measurable to effectively assess and control risks related to them.
Reference: COSO Framework for Internal Control, which emphasizes the importance of clear, measurable objectives in effective internal control systems.
D
Explanation:
The statement that articulating measurable objectives is part of internal control is true. A system of internal control is designed to help an organization achieve its objectives, and these objectives need to be clearly stated and measurable to effectively assess and control risks related to them.
Reference: COSO Framework for Internal Control, which emphasizes the importance of clear, measurable objectives in effective internal control systems.