2025 New IIA-CIA-Part1 Exam Questions Real IIA Dumps
Course 2025 IIA-CIA-Part1 Test Prep Training Practice Exam Download
IIA-CIA-Part1 exam is an important certification for individuals who are looking to pursue a career in internal auditing. Essentials of Internal Auditing certification is globally recognized and highly valued by employers. IIA-CIA-Part1 exam covers a wide range of topics related to internal auditing and is designed to test the knowledge and skills required for individuals to perform their duties effectively.
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NEW QUESTION # 163
Which of the following results from computer assisted audit techniques provides the most significant indication that additional audit work is needed?
- A. The sum of credit entries on the bank statement did not equal the sum of collections for the same period.
- B. Sorting the check register file by vendor name identified missing sequences of check numbers.
- C. Matching the accounts payable transaction file with the purchase order request file resulted in many differences between the person requesting the purchase order and the person authorizing payment.
- D. Several exact matches were found when vendor and employee addresses were compared.
Answer: D
Explanation:
Section: Volume C
Explanation
NEW QUESTION # 164
During an audit engagement of a large retail store, internal auditors noted significant discrepancies between available inventory and sales and suspect an abuse of cash register refunds and voids. Which of the following would be the most effective preventative control to reduce these losses?
- A. Call a sample of customers who returned merchandise to test the legitimacy of the returns and check refund amounts.
- B. Require that a manager use a reserved register code to approve voids or refunds.
- C. Analyze voids and refunds by employee, credit card number, and amount for unusual numbers, amounts, or patterns.
- D. Ensure that returned merchandise is restocked to shelves or sent to the manufacturer by an independent employee.
Answer: B
NEW QUESTION # 165
An organization sells products through distributors. The organization's chief audit executive insists that the organization's code of conduct be applicable to their distributors as well. Which of the following risks would this mitigate?
- A. Business continuity
- B. intellectual property leakage
- C. Market manipulation
- D. Reputational damage
Answer: D
Explanation:
Insisting that the organization's code of conduct be applicable to their distributors as well would mitigate the risk of reputational damage. This ensures that all parties representing the organization adhere to the same ethical standards, thereby reducing the likelihood of practices that could harm the organization's reputation among customers and other stakeholders.References: IIA and corporate governance best practices regarding ethical standards and code of conduct, highlighting how extending these policies to distributors and partners can protect the organization's reputation.
NEW QUESTION # 166
A manufacturing organization's chief audit executive (CAE) was approached by the head of security from one of the manufacturer's third party suppliers The head of security requested internal audit records from a recent audit engagement involving the third-party supplier The head of security believed those records contained information that would enable to identify employees of the third-party supplier who may be involved m fraudulent activities What is the most appropriate course of action for the CAE?
- A. Release the records but first remove all data regarding the manufacturing organization s internal actions and procedures
- B. Deny access to the records as the third party supplier s security learn should be able to investigate then own employees.
- C. Obtain approval from the manufacturer's audit committee regarding the release of audit records
- D. Consult with the manufacturer's senior management to determine whether releasing tie records would be appropriate
Answer: D
NEW QUESTION # 167
Which of the following is not an advantage of face-to-face interviews over electronic surveys?
- A. The response rate is typically higher.
- B. Interviewers can increase a respondent's comprehension of questions.
- C. Survey designers can use a wider variety of question types.
- D. They are less expensive to distribute and compile data.
Answer: D
NEW QUESTION # 168
As part of a fraud investigation by regulators, a court order was issued to a bank. The court order requested the chief audit executive (CAE) to provide access to a number of audit reports and workpapers, some of which included customers' confidential information such as transaction activity and other personal details. What is the appropriate response by the CAE?
- A. Consult with legal counsel to determine what information to provide.
- B. Seek permission from customers prior to sharing their information.
- C. Reject the court order, citing a potential breach of customers' confidentiality agreement
- D. Respond promptly and provide all that was requested by the court order.
Answer: A
Explanation:
When faced with a court order that may involve sharing confidential information, it is appropriate and prudent for the chief audit executive (CAE) to consult with legal counsel. This step ensures that the CAE understands the legal obligations and constraints before disclosing audit reports and workpapers that contain sensitive customer information, balancing legal compliance with the duty to protect confidentiality.References: Institute of Internal Auditors (IIA) - Guidelines on Handling Legal and Ethical Issues
NEW QUESTION # 169
According to the Standards, which of the following must an internal auditor take into consideration when performing an assurance engagement of treasury operations?
I. The audit committee has requested assurance of the treasury department's compliance with a new policy on the use of financial instruments.
II. Treasury management has not instituted any risk management policies.
III. Due to the recent sale of a division, the amount of cash and marketable securities managed by the treasury department has increased by 350 percent.
IV. The external auditors have indicated some difficulties in obtaining account confirmations.
- A. II, III, and IV only
- B. I and IV only
- C. I, II, and III only
- D. I and II only
Answer: C
Explanation:
Section: Volume B
NEW QUESTION # 170
Which of the following is a strategic risk that internal auditors should consider when performing a third-party risk management engagement?
- A. Physical security
- B. Loss of intellectual property
- C. Conflict of interest
- D. Cost overruns
Answer: B
Explanation:
Loss of intellectual property is a significant strategic risk that internal auditors should consider when performing a third-party risk management engagement. This risk can have substantial implications for the organization's competitive advantage, reputation, and financial performance. Ensuring that third parties have adequate controls to protect intellectual property is essential for mitigating this risk. Internal auditors should evaluate the effectiveness of these controls and the potential impact of intellectual property loss on the organization's strategic objectives.
The IIA Standards: Standard 2120 - Risk Management: "The internal audit activity must evaluate the effectiveness and contribute to the improvement of risk management processes." IIA Practice Guide: "Auditing Third-party Risk Management": Highlights the importance of assessing strategic risks, including intellectual property protection, in third-party relationships.
NEW QUESTION # 171
An internal audit activity uncovered a potential fraud during a recent engagement and will perform an investigative fraud audit. How would the internal audit activity demonstrate that the team has the necessary experience to perform this engagement?
- A. The team should include at least one individual in the area of the suspected fraud to provide valuable advice, due to their familiarity with the business processes, although it is not required.
- B. The team must collectively possess the necessary audit and fraud skills, although not every member of the team would need previous experience conducting an investigation.
- C. The internal audit activity must outsource the engagement to an independent, qualified consulting firm specializing in fraud investigations.
- D. The team must consist of internal auditors who have previous fraud auditing experience and possess a certification in fraud examination.
Answer: C
NEW QUESTION # 172
An internal auditor found that his organization did not make a disclosure that is required by law.
However, the auditor decided not to raise an audit finding. Which of the following Code of Ethics principles was violated?
- A. Confidentiality.
- B. Proficiency.
- C. Objectivity.
- D. Integrity.
Answer: C
NEW QUESTION # 173
Which of the following skills is critical for assessing corporate social responsibility through a self-assessment?
- A. Assessment skills
- B. Facilitation skills
- C. Assurance skills
- D. Interviewing skills
Answer: B
Explanation:
Facilitation skills are critical for assessing corporate social responsibility through a self-assessment. Effective facilitation helps guide the participants through the self-assessment process, ensuring that all relevant issues are thoroughly discussed and that contributions from various stakeholders are effectively incorporated. This skill set is essential for eliciting insightful, honest feedback and fostering a constructive dialogue about the organization's social responsibility practices.
Institute of Internal Auditors (IIA) - International Professional Practices Framework (IPPF)
NEW QUESTION # 174
Which of the following is not an appropriate role of the internal audit activity in governance activities?
- A. Ensure the timely implementation of audit recommendations.
- B. Support the board in enterprise-wide risk assessment.
- C. Discuss areas of significant risk.
- D. Monitor compliance with the organization's ethics policies.
Answer: A
NEW QUESTION # 175
Upon completion of an external quality assessment, which of the following would the chief audit executive be required to report to the board?
- A. The detailed evaluation results of the external assessment
- B. The competency and independence of the external assessment team
- C. The total time spent to accomplish the external assessment
- D. The timetable and schedule of the next external assessment
Answer: A
NEW QUESTION # 176
Which of the following offers the best evidence that the internal audit activity has achieved organizational independence?
- A. An independent third party has assessed the organization's system of internal controls to be adequate and effective,
- B. The mission statement and strategy of the internal audit activity demonstrates alignment to organizational objectives.
- C. The internal audit charter is drafted properly and approved by the appropriate parties.
- D. The chief audit executive reports both functionally and administratively to the CEO.
Answer: C
NEW QUESTION # 177
According to MA guidance, which of the following is true with regard to the internal audit charter?
1. It specifies the minimum resources needed for assurance engagements.
2. It requires final approval from senior management.
3. It defines the internal audit activity's authority and responsibilities.
4. It describes the expectations for communicating the results of a quality assurance and Improvement program.
- A. 2. 3. and 4.
- B. 1 and 4 only.
- C. 1.2. and 4.
- D. 3 and 4 only.
Answer: D
Explanation:
According to IIA guidance, the internal audit charter is a formal document that defines the internal audit activity's purpose, authority, and responsibility. It establishes the internal audit activity's position within the organization, including the nature of the chief audit executive's functional reporting relationship with the board; authorizes access to records, personnel, and physical properties relevant to the performance of engagements; and defines the scope of internal audit activities. Final approval of the internal audit charter is done by the board, not just senior management. Furthermore, the charter might describe the expectations for communicating the results of the quality assurance and improvement program, which ensures that the internal audit activity continues to operate effectively and efficiently.
IIA Standard 1000: Purpose, Authority, and Responsibility; and Standard 1300: Quality Assurance and Improvement Program.
NEW QUESTION # 178
Which of the following controls could an internal auditor reasonably conclude is effective by observing the physical controls of a large server room?
- A. Swipe card access is required to gain access to the server room.
- B. Foam fire extinguishers are operable to protect against electrical fires.
- C. Servers are secured individually to their racks by locks.
- D. Adequate signs are in place to assist in locating safety equipment.
Answer: D
Explanation:
Section: Volume F
Explanation/Reference:
NEW QUESTION # 179
Which of the following statements demonstrates that internal auditors are in conformance with the standard of due professional care?
- A. Internal auditors have strictly followed a formal audit process in conducting their work.
- B. Internal auditors have demonstrated an unbiased mental attitude.
- C. Internal auditors have shown they have the freedom to carry out their responsibilities.
- D. Internal auditors have demonstrated the skills needed to carry out the audit engagement.
Answer: D
Explanation:
According to the International Standards for the Professional Practice of Internal Auditing (Standards), internal auditors must exhibit due professional care in their work. Due professional care implies that internal auditors must apply the care and skill expected of a reasonably prudent and competent auditor. Standard 1220 of the IIA's International Standards states that internal auditors must consider the use of technology-based audit and other data analysis techniques. Furthermore, they should be alert to the significant risks that might affect objectives, operations, or resources. Demonstrating the necessary skills and proficiency (Option B) directly aligns with the requirement of due professional care, as it ensures that auditors have the capability to identify and manage risks effectively.References:
* IIA Standards, Standard 1220: Due Professional Care
* IIA's International Professional Practices Framework (IPPF)
NEW QUESTION # 180
The last quality assessment of the internal audit activity identified three areas for improvement: the achievement of audit engagement objectives, quality of work, and staff development. According to IIA guidance, which of the following should be the chief audit executive's primary focus to achieve these recommended improvements?
- A. Engagement supervision.
- B. Due professional care.
- C. Employment of tools and techniques.
- D. Demonstrated compliance with procedures.
Answer: A
NEW QUESTION # 181
An organization has developed a model to determine the most profitable rate of production. The organization varies the cost of labor in the model to determine how much the changes affect the optimal production level. Which type of analysis does this scenario demonstrate?
- A. Decision.
- B. Forecast.
- C. Sensitivity.
- D. Critical path.
Answer: C
NEW QUESTION # 182
A manufacturing firm uses hazardous materials in the production of its products. An audit of the firm's processes related 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. I,III,and IVonly
- B. I,II,and IVonly
- C. IIonly
- D. III and IVonly
Answer: B
NEW QUESTION # 183
During a review of employee benefits, a staff internal auditor observed an ambiguity in the incentive compensation policy. If reported, it could negatively impact the internal auditor's compensation. Which of the following would encourage the internal auditor to be objective in his work?
- A. Audit committee review of every engagement report at the conclusion of the audit.
- B. Internal audit charter approved by the board.
- C. External assessments of the internal audit activity every five years.
- D. Periodic reinforcement of the internal audit activity's code of ethics disclosure practices.
Answer: B
NEW QUESTION # 184
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