Question 1

Which of the following should play a leading role in overseeing the ethical atmosphere of an organization?

Options :

A : Internal audit activity.

B : Operating management.

C : Senior management.

D : Board of directors.

Answer: D

Question 2

Which of the following best describes the most important criteria when assigning responsibility for specific tasks required in an audit engagement?

Options :

A : Auditors must be given assignments based primarily upon their years of experience.

B : All auditors assigned an audit task must have the knowledge and skills necessary to complete the task satisfactorily.

C : Tasks must be assigned to the audit team member who is most qualified to perform them.

D : All audit team members must have the skills necessary to satisfactorily complete any task that will be required in the audit engagement.

Answer: B

Question 3

Which of the following is an indicator of ineffective third-party risk management?

Options :

A : Sourcing of third parties does not follow public procurement law.

B : Violations of service conditions trigger either fines or termination.

C : Due diligence of third parties is conducted only after contract signing.

D : The right-to-audit clause is limited by personal data protection regulations.

Answer: C

Question 4

The same internal auditor has audited the regional purchasing department annually for the last three years. The audits have shown several significant control deficiencies that have not been corrected by management. New management is in charge of this regional purchasing department, and it is time to audit the department again. What concerns should be considered prior to assigning the audit to the same auditor?

Options :

A : Intimidation threats may compromise the auditor-s objectivity due to multiple negative audit reports completed by the auditor.

B : The auditor has reviewed the department annually for the last three years, leading to familiarity, which can impact the internal audit activity-s independence.

C : A negative cognitive bias may be in place that affects the employee-s objectivity due to the recent audits with uncorrected control deficiencies.

D : The auditor may have formed a cultural bias, as the department under review is in the auditor-s geographic area.

Answer: B

Question 5

If management has not established a risk management process, the internal audit activity could.

Options :

A : Take a proactive role that supplements traditional assurance activities.

B : Identify and mitigate risks to the organization

C : Assume responsibility for the management of identified risks.

D : Assume primary responsibility for determining if adequate and effective processes are in place.

Answer: A

Higher Test Marks with Free Online IIA-CIA-Part1 Exam Practice

Buying Options: