Free IIA-CIA-Part1 – Certified Internal Auditor - Part 1, The Internal Audit Activity's Role in Governance, Risk, and Control Practice Test Question

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  The CAE should agree with the audit committee and implement only those standards appropriate to the size of the IAA.

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  The CAE should request the audit committee to review the Standards to identify specifically which are creating the greatest concern.

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  The CAE should seek sufficient funding to increase audit resources to meet the minimum requirements of the Standards.

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  The CAE should explain that conformance with the Standards is essential and not dependent upon the size of the IAA.
  

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  Resource allocation, risk management metrics, risk assessment, post-mortem analysis, effective communication.

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  Risk management metrics, resource allocation, risk assessment, effective communication, post-mortem analysis.

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  Risk assessment, resource allocation, risk governance and reporting, post-mortem analysis, feedback.

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  Resource allocation, risk monitoring, risk assessment, feedback, post-mortem analysis.
  

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  1 and 2 only

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  1 and 3 only

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  2 and 4 only

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  3 and 4 only
  

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  Preparing written organizational policies that relate to compliance with laws, regulations, ethics, and conflicts of interest.

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  Ensuring that financial statements are understandable, transparent, and reliable.

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  Assisting the internal audit activity in performing annual reviews of governance.

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  Working with the organization's attorneys to develop a strategy regarding current litigation, pending litigation, or regulatory proceedings governance.
  

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  Segregate cash payments from cash receipts.

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  Provide accountability for cash received.

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  Minimize misappropriations in cash receipts.

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  Improve physical security over the cash-receiving function.
  

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  I only

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  III only

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  II and III only

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  I, II, and III.
  

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  Items should be ranked in the order of quantifiable dollar exposure to the organization.
  II. The audit priorities should be in order of major control deficiencies.
  III. The risk assessment, though quantified, is the result of professional judgments about both exposures and probability of occurrences.
  

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  Reviews of reports to determine which issued payments lack evidence of supervisory review.

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  A monthly review of new vendors performed by management for reasonableness.

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  Bank reconciliations performed on a monthly basis by the accounting department.

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  A code of conduct and whistleblower policy that must be signed by all employees annually.

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  Condition section.

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  Criteria section.

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  Effect section.

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  Cause section.
  

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  Identification of large budget variances in disposal costs for hazardous chemicals.

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  Restricted access to environmental department files.

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  Formal on-the-job training program conducted by the environmental staff.

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  Samples of water and solid waste taken daily with the results recorded in a log.
  

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  Monthly bank reconciliations are performed by the clerk on a timely basis.

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  Total cash deposits for the month are reconciled to the cash receipts journal.

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  Names, amounts, and dates on remittance advices are reconciled with the names, amounts, and dates recorded in the cash receipts journal.

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  Total cash deposits are compared with the bank reconciliation.
  

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  II only

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  I and II only

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  I, II, and III only

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  I, III, and IV only
  

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  Board of directors.
  II. Senior management.
  III. Shareholders.
  IV. External auditors.
  

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  Compensating controls from other processes were not present.

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  Redundant controls are not in place to enhance well designed controls.

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  Entity level controls are informal and not consistently enforced.

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  Process controls were not developed from an existing key control checklist.
  

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  Decline the offer because the internal auditor subordinated professional judgment, and objectivity is therefore impaired.

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  Decline the offer because the internal auditor recently transferred from the IT department.

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  Accept the offer because the internal auditor maintains an independent mental attitude and is therefore objective.

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  Accept the offer because the internal audit charter grants the internal auditor authority to maintain objectivity.
  

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  The auditor should be able to have comparable competencies of a person whose primary responsibility is detecting and investigating fraud.

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  The auditor must have sufficient knowledge to evaluate the risk of fraud and the manner in which it is managed by the organization.

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  The auditor is not expected to have any competency requirement regarding fraud since the role of investigating and detecting fraud belongs to other functions in the organization.

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  The auditor must be able to have an appreciation of the fundamentals of fraud detection and investigation techniques.
  

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  Diversifying the risk that network access will not be available to legitimate, authorized users.

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  Accepting the risk that there may be attempts at unauthorized access to the network.

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  Avoiding the risk of having a direct network connection to un-trusted networks.

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  Sharing the risk that either firewall could be compromised by hackers.
  

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  A mining company practices backfilling and planting trees after mining within an area.

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  A construction company ensures that its workers are paid at the regulated minimum wage.

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  A foods manufacturer sources cheap raw materials to generate higher profits for distribution to its employees.

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  A bank listed on the national stock exchange consistently pays dividends to its shareholders.

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  Edit controls on the payroll file.

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  Appropriate segregation of duties for batch approval.

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  Validation of hash totals.

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  Reconciliation of paychecks to the bank account.
  

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  It provides guidance on identifying control deficiencies for each internal audit engagement.

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  It recognizes the need to evaluate both hard and soft controls.

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  It assists internal auditors in assessing the achievement of management's objectives.

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  It validates the findings and recommendations of the internal audit.
  

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  Appropriate terms of internal audit scope and responsibility in the charter.

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  Appropriate compliance coverage in the annual audit plan.

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  Regular review of the audit charter by management.

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  Assurance of internal audit objectivity by the board.
  

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  II only

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  I and III only

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  II and III only

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  I, II, and III.
  

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  Identify key measures.
  II. Collect data on performances and practices.
  III. Identify opportunities for improvement.