Practice Free IIA-CIA-Part1 Exam Online Questions
Question #80
Which of the following resources would be most effective for an organization that would like to improve how it informs stakeholders of its social responsibility performance?
- A . ISO 26000.
- B . Global Reporting Initiative.
- C . Open Compliance and Ethics Group.
- D . COSO’s enterprise risk management framework
Correct Answer: B
B
Explanation:
The Global Reporting Initiative (GRI) is the most effective resource for an organization looking to improve how it informs stakeholders of its social responsibility performance. The GRI provides a comprehensive set of standards for sustainability reporting, which includes guidelines on how to communicate social responsibility efforts transparently and effectively to stakeholders.
Reference: Global Reporting Initiative (GRI) standards; literature on sustainability reporting.
B
Explanation:
The Global Reporting Initiative (GRI) is the most effective resource for an organization looking to improve how it informs stakeholders of its social responsibility performance. The GRI provides a comprehensive set of standards for sustainability reporting, which includes guidelines on how to communicate social responsibility efforts transparently and effectively to stakeholders.
Reference: Global Reporting Initiative (GRI) standards; literature on sustainability reporting.
Question #80
Which of the following resources would be most effective for an organization that would like to improve how it informs stakeholders of its social responsibility performance?
- A . ISO 26000.
- B . Global Reporting Initiative.
- C . Open Compliance and Ethics Group.
- D . COSO’s enterprise risk management framework
Correct Answer: B
B
Explanation:
The Global Reporting Initiative (GRI) is the most effective resource for an organization looking to improve how it informs stakeholders of its social responsibility performance. The GRI provides a comprehensive set of standards for sustainability reporting, which includes guidelines on how to communicate social responsibility efforts transparently and effectively to stakeholders.
Reference: Global Reporting Initiative (GRI) standards; literature on sustainability reporting.
B
Explanation:
The Global Reporting Initiative (GRI) is the most effective resource for an organization looking to improve how it informs stakeholders of its social responsibility performance. The GRI provides a comprehensive set of standards for sustainability reporting, which includes guidelines on how to communicate social responsibility efforts transparently and effectively to stakeholders.
Reference: Global Reporting Initiative (GRI) standards; literature on sustainability reporting.
Question #83
According to IIA guidance, a new internal auditor is expected to possess which of the following competencies?
- A . Technical industry-specific expertise.
- B . Expertise in cybersecurity, an area of increasing risk.
- C . Knowledge of IT risks and controls.
- D . Knowledge of forensic accounting.
Correct Answer: C
C
Explanation:
According to IIA guidance, a new internal auditor is expected to possess a broad understanding of IT risks and controls.
This competency is crucial because:
IT risks and controls are integral to the overall control environment and impact all areas of an organization.
Knowledge of IT risks and controls enables auditors to assess the effectiveness of controls over information systems, data security, and technology infrastructure.
As technology evolves, internal auditors must understand how to evaluate IT-related controls to provide relevant assurance and advisory services.
While technical industry-specific expertise, cybersecurity expertise, and forensic accounting knowledge are valuable, they are not core competencies expected of every new internal auditor according to IIA guidance. The fundamental requirement is a solid grasp of IT risks and controls.
Reference: The Institute of Internal Auditors (IIA) Competency Framework.
"Internal Auditing: Assurance & Advisory Services" by IIA, Chapter on IT Risks and Controls.
IIA’s Global Internal Audit Competency Framework.
C
Explanation:
According to IIA guidance, a new internal auditor is expected to possess a broad understanding of IT risks and controls.
This competency is crucial because:
IT risks and controls are integral to the overall control environment and impact all areas of an organization.
Knowledge of IT risks and controls enables auditors to assess the effectiveness of controls over information systems, data security, and technology infrastructure.
As technology evolves, internal auditors must understand how to evaluate IT-related controls to provide relevant assurance and advisory services.
While technical industry-specific expertise, cybersecurity expertise, and forensic accounting knowledge are valuable, they are not core competencies expected of every new internal auditor according to IIA guidance. The fundamental requirement is a solid grasp of IT risks and controls.
Reference: The Institute of Internal Auditors (IIA) Competency Framework.
"Internal Auditing: Assurance & Advisory Services" by IIA, Chapter on IT Risks and Controls.
IIA’s Global Internal Audit Competency Framework.
Question #84
Who is held responsible for oversight of the organization’s risk management framework?
- A . Operational management.
- B . Board of directors.
- C . Internal auditors.
- D . Head of risk management.
Correct Answer: B
B
Explanation:
The oversight of an organization’s risk management framework is primarily the responsibility of the board of directors. The board’s role includes ensuring that risk management processes are integrated with overall organizational processes and that the strategies and policies regarding risk management are effectively managed and aligned with the organization’s objectives. Operational management, internal auditors, and the head of risk management each play roles within the framework established by the board but do not have overall oversight responsibility.
Reference: Institute of Internal Auditors (IIA) – International Professional Practices Framework (IPPF)
B
Explanation:
The oversight of an organization’s risk management framework is primarily the responsibility of the board of directors. The board’s role includes ensuring that risk management processes are integrated with overall organizational processes and that the strategies and policies regarding risk management are effectively managed and aligned with the organization’s objectives. Operational management, internal auditors, and the head of risk management each play roles within the framework established by the board but do not have overall oversight responsibility.
Reference: Institute of Internal Auditors (IIA) – International Professional Practices Framework (IPPF)
Question #85
Which of the following is a control that is used mainly to check the integrity of data entered into a business application, whether the data is entered directly by staff, remotely by a business partner, or through a web-enabled application?
- A . General IT control.
- B . Processing control.
- C . Input control
- D . Integrity control
Correct Answer: C
C
Explanation:
Input controls are designed to ensure the accuracy, completeness, and validity of data entered into a business application. These controls can include validation checks, input masks, and error detection methods that verify data at the point of entry. Whether data is entered directly by staff, remotely by business partners, or through web-enabled applications, input controls help maintain the integrity of the data by preventing errors and unauthorized input. These controls are crucial in maintaining data quality and integrity in any business application.
Reference: The IIA’s Global Technology Audit Guide (GTAG) on Information Technology Controls.
COBIT 5 Framework on Information and Technology Governance.
C
Explanation:
Input controls are designed to ensure the accuracy, completeness, and validity of data entered into a business application. These controls can include validation checks, input masks, and error detection methods that verify data at the point of entry. Whether data is entered directly by staff, remotely by business partners, or through web-enabled applications, input controls help maintain the integrity of the data by preventing errors and unauthorized input. These controls are crucial in maintaining data quality and integrity in any business application.
Reference: The IIA’s Global Technology Audit Guide (GTAG) on Information Technology Controls.
COBIT 5 Framework on Information and Technology Governance.
Question #86
Which of the following is a consulting service the internal audit activity can perform with respect to the organization’s risk management?
- A . Delivering assurance on the risk management system
- B . Facilitating risk assessment workshops
- C . Evaluating principal risk reporting
- D . Deciding on the appropriate risk response
Correct Answer: B
B
Explanation:
The IIA recognizes that internal auditors can provide valuable consulting services that support the organization’s risk management without compromising their independence. Facilitating risk assessment workshops (option B) is a consulting service that internal auditors can perform, which helps the organization identify and evaluate risks in a structured way. This activity does not involve making management decisions or assuming management responsibilities, preserving the internal audit’s advisory role.
Reference: IIA Standard 1000: "Consulting Services"
B
Explanation:
The IIA recognizes that internal auditors can provide valuable consulting services that support the organization’s risk management without compromising their independence. Facilitating risk assessment workshops (option B) is a consulting service that internal auditors can perform, which helps the organization identify and evaluate risks in a structured way. This activity does not involve making management decisions or assuming management responsibilities, preserving the internal audit’s advisory role.
Reference: IIA Standard 1000: "Consulting Services"
Question #87
With regard to governance, which of the following is a board-level responsibility rather than a management responsibility?
- A . Obtaining assurance on external financial, regulatory, and internal audits.
- B . Complying with laws, regulations, and codes.
- C . Assigning authority and responsibilities organization wide.
- D . Monitoring and measuring performance.
Correct Answer: A
A
Explanation:
The board of directors is responsible for the oversight of the organization’s governance framework, which includes obtaining assurance on external financial, regulatory, and internal audits. This responsibility is crucial for ensuring the integrity and accuracy of financial reporting and compliance with laws and regulations. Management, on the other hand, is responsible for operational activities, such as complying with laws, assigning authority, and monitoring performance.
Reference: Institute of Internal Auditors (IIA) – Governance and oversight responsibilities. IIA’s International Professional Practices Framework (IPPF).
A
Explanation:
The board of directors is responsible for the oversight of the organization’s governance framework, which includes obtaining assurance on external financial, regulatory, and internal audits. This responsibility is crucial for ensuring the integrity and accuracy of financial reporting and compliance with laws and regulations. Management, on the other hand, is responsible for operational activities, such as complying with laws, assigning authority, and monitoring performance.
Reference: Institute of Internal Auditors (IIA) – Governance and oversight responsibilities. IIA’s International Professional Practices Framework (IPPF).
Question #88
Which of the following best describes the type of risk that an adequately designed and effectively operating system of internal controls should mitigate?
- A . Net.
- B . Controllable.
- C . inherent,
- D . Residual.
Correct Answer: C
C
Explanation:
The type of risk that an adequately designed and effectively operating system of internal controls should mitigate is "Residual" risk. Residual risk is what remains after internal controls are applied to inherent risk. This is the primary focus of most internal control systems, which are intended to reduce risks to an acceptable level.
Reference: Risk management frameworks and internal control literature, such as COSO and the Institute of Internal Auditors (IIA) guidance.
C
Explanation:
The type of risk that an adequately designed and effectively operating system of internal controls should mitigate is "Residual" risk. Residual risk is what remains after internal controls are applied to inherent risk. This is the primary focus of most internal control systems, which are intended to reduce risks to an acceptable level.
Reference: Risk management frameworks and internal control literature, such as COSO and the Institute of Internal Auditors (IIA) guidance.
Question #89
When a plant manager from within the organization is hired as a rotational internal auditor within the internal audit activity which area should he most likely be trained for immediately?
- A . Industry knowledge
- B . Project management
- C . Leadership skills
- D . Risk assessments
Correct Answer: D
D
Explanation:
When a plant manager from within the organization is hired as a rotational internal auditor, the area he should most likely be trained for immediately is risk assessments. This training is crucial because understanding and performing risk assessments is fundamental to the internal audit function, and the plant manager may not have specific skills in this area despite having industry and management experience.
Reference: IIA education and training standards
D
Explanation:
When a plant manager from within the organization is hired as a rotational internal auditor, the area he should most likely be trained for immediately is risk assessments. This training is crucial because understanding and performing risk assessments is fundamental to the internal audit function, and the plant manager may not have specific skills in this area despite having industry and management experience.
Reference: IIA education and training standards
Question #90
Which of the following is the best example of an ongoing independent monitoring activity?
- A . Management quality assurance activities
- B . Internal audit fraud prevention and detection activities
- C . Management and supervisory activities
- D . External audit quality assurance activities
Correct Answer: B
B
Explanation:
Internal audit fraud prevention and detection activities are the best example of an ongoing independent monitoring activity among the options provided. These activities are designed to be independent of the management and are critical in continuously monitoring and identifying potential fraudulent activities within the organization.
Reference: IIA standards on fraud and monitoring
B
Explanation:
Internal audit fraud prevention and detection activities are the best example of an ongoing independent monitoring activity among the options provided. These activities are designed to be independent of the management and are critical in continuously monitoring and identifying potential fraudulent activities within the organization.
Reference: IIA standards on fraud and monitoring