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CIA exam what is the key word in the institute of internal auditors mission statement of internal audit? a) assurance b)advice c)value d)insight correct answer c) value mission is to enhance and protect organizational value by providing risk-based and objective assurance, advice and insight (value drives) the new international professional practices framework effective from 2017 contains which of the following that was not a part of previous ippf? a)mission and core principles b)definition of internal auditing and practice guides c)code of ethics and glossary d)international standards and local standards for internal auditing correct answer a) mission and core principles added after 2017 which of the following adds value to the others? a)governance processes b)risk management processes c)internal audit activities d) control processes correct answer c)internal audit activities add value to or when they provide objective and relevant assurance and contribute to effectiveness and efficiency of GRC processes the IIA's definition of internal auditing emphasizes the effectiveness of which of the following? a)value, cost, and benefit propositions b)inherent risk, residual risk and total risk
c)risk management, control and governance processes d)purpose, nature, and scope of work correct answer c) GRC definition of internal auditing states the fundamental purpose, nature and scope of internal auditing. internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. it helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes the internal audit activity's core principles can be used as which of the following? a)metrics b)benchmarks c)kpi d)dashboards correct answer b) benchmarks the core principles can be used as a benchmark against which to gauge the effectiveness of an internal audit activity the internal audit activity's core principles describe which of the followings a)efficiency b)resources c)plans d)effectiveness correct answer d) effectiveness the core principles are key elements that describe an internal audit activity's effectiveness internal audit activity's core principles underpin which of the following? a)code of ethics and standards b)efficiency and effectiveness c)metrics and kpi d)resources and skills correct answer a)code of ethics and standards
consulting objectives are consistent w/ LT (values, strategies and objectives) all of the following are examples of assurance services except: a) financial b) compliance c) due diligence d) training correct answer d) training assurance: financial, performance, compliance, system security, and due diligence consulting: counsel, advice, facilitation and training all of the following are examples of consulting services except: a)legal counsel engagement b)system security engagement c)advice engagement d)facilitation engagment correct answer b)system security engagement assurance: financial, performance, compliance, system security, and due diligence consulting: counsel, advice, facilitation and training IIA's code of ethics includes which of the following two essential components? a)definition of internal auditing and admin directives b)principles and rules of conduct c)integrity and objectivity d)confidentiality and competency correct answer b) principles and rules of conduct -principles that are relevant to the profession and practice of internal auditing -rules of conduct that describe behavior norms expected of internal auditors. rules are an aid to interpreting the principles in practical applications and are intended to guide the ethical conduct of internal auditors
CIA is working in a noninternal audit position as the director of purchasing. cia signs a contract to procure a large order from the supplier with the best price, quality and performance. shortly after signing the contract, the supplier presents the cia with a gift of significant monetary value. which of the following statements regarding the acceptance of the gift is correct? a)prohibited only if it were noncustomary b)violate the iia code of ethics and would be prohibited c)governed only by org's code of conduct d)would not violate either iia code of ethics or org's code of conduct correct answer b)violate iia code of ethics and prohibited as long s individual is a CIA, he/she should be guided by profession's code of ethics in addition to the org's code of conduct. objectivity of code of ethics would preclude gift because it has influence on individual's decision auditor discovers that director of marketing has a gambling habit. gambling issue is not directly related to the existing audit, and there is pressure to complete the current audit. the auditor notes problem and passes the information on to the CAE but does no further followup. auditor's actions would: a)be in violation of iia code of ethics for withholding meaningful information b)be in violation of standards because auditor did not properly followup on a red flag that might indicate the existence of fraud c)not be in violation of either the iia code of ethics/standards d)a + b correct answer c)not be in violation of either the iia code of ethics / the standards as used by the internal auditing profession, iia standards refer to all of the following except: a) criteria by which the operations of an internal audit dept are evaluated and measured b) criteria that dictate the minimum level of ethical actions to be taken by internal auditors c) statements intended to represent practice of internal auditing as it should be d) criteria that are applicable to all types of internal audit dept. correct answer b) criteria that dictate the minimum level of ethical actions to be taken by internal auditors
which of the following is not compromised when an internal auditor has compromised her independence of mind? a)integrity b)objectivity c)continuing education d)professional skepticism correct answer c) continuing ed when internal audit work is performed based on facts, it is referring to which of the following ethical principles? a)integrity b)objectivity c)resource utilization d)professional behavior correct answer a)integrity objectivity - credible audit work resource utilization - sensitive and confidential info professional behavior - honest effort in performing duties org politics is part of which of the following threats to independence of internal audit organization and to an individual internal auditor? a)bias b)familiarity c)undue influence d)management participation correct answer c) undue influence threat major challenge in maintaining independence due to its undue influence extreme and unnecessary playing of org politics lead to failure/decline peer review can help in mitigating which of the following threats to auditor's objectivity? a)target fixation trap
b)mirror imaging c)analogy d)projection correct answer b) mirror imaging auditor's false assumption that his followers and others think exactly like him unwilling to examine/analyze other views, variations or alternatives of SM silo trap belongs to the a)stereotyping b)culture c)stovepiping d)coi correct answer c)stovepiping acknowledging only one source of info/knowledge base as official source and disregarding other sources silo + legacy traps which of the following won't help in identifying overall risks to the internal audit function? a)barrier analysis b)root cause analysis c)assurance maps d)risk maps correct answer a) barrier analysis relates to business activity of org change identifies key determinants of human behavioral change in employees to help focus behaviors that haven't changed ->human behavior in which of the following situations does the auditor potentially lack objectivity? a)review procedures for new EDI connection to major customer before implementation
according to IIAS1130, which of the following isn't a part of functional reporting to the board? a)audit charter b)audit risk assessment c)audit budgets d)audit plan correct answer c)budgets CAE reports functionally to the board and administratively to the CEO budget isn't function/is admin relationship between proficiency and competency is: a)direct b)indirect c)not tested d)not observed correct answer a)direct a person's competency can be derived from which of the following? a)knowledge skills and abilities b)more theory and less practice c)education and experience d)less theory and more practice correct answer c)education and experience regarding competency levels, staff auditors belong to which of the following? a)entry level b)journeyman c)functional d)expert correct answer a) entry
regarding competency levels, audit consultants belong to which of the following? a)entry b)journeyman c)functional d)expert correct answer d)expert regarding competency levels, audit supervisors belong to which of the following? a)entry b)journeyman c)functional d)expert correct answer d)functional regarding competency levels, senior auditor belong to which of the following? a)entry b)journeyman c)functional d)expert correct answer b)journeyman due professional care for internal auditors is derived from which of the following? a)internal audit manual b)internal audit education c)internal audit experience d)internal audit professional certification correct answer a) internal audit manual internal audit management should perform annually which of the following? a)education gap assessment b)competency gap assessment
d)sufficient evidence and appropriate evidence correct answer c) reasonable care and professional skepticism regarding professional judgment, internal auditors can't attain: a)absolute assurance b)reasonable assurance c)possible assurance d)expected assurance correct answer a)absolute assurance which of the following is the highest-ranked skill required at all levels of internal auditors? a)assertion skills b)career skills c)persuasion skills d)communication skills correct answer d)communication skills which of the following can help clear up major sources of conflict between internal auditors and their audit clients? a)assertion skills and listening skills b)leadership skills and managing skills c)problem-solving skills and decision-making skills d)social skills and teamwork skills correct answer a) assertion skills and listening skills audit teams need more of which of the following? a)collaboration b)communication c)critical thinking d)creativity correct answer a) collaboration
internal auditors ranging from staff to director need which of the skills? a)technical b)business acumen c)social d)motivation correct answer c)business acumen skills staff to director have (1-3): communication, people, critical thinking, business acumen staff to supervisor(1-2): technical, collaboration supervisor to director(2-3): problem solving and decision making ensuring internal audit teams have the right competencies with right level of work experience and designing effective internal audit procedures can reduce the risk of which of the following? a)business risk b)audit failures c)audit false assurance d)audit reputation risk correct answer b) audit failures
- failure to evaluate both design adequacy and control effectiveness as part of internal audit procedures 2)use of audit teams that don't have appropriate level of competence based on experience/knowledge of high risk areas which of the following differs between assurance services and consulting services when exercising due professional care? a)costs and benefits b)complexity of work
I)supervision II)internal assessment III)ongoing monitoring IV)external assessment correct answer all of the above which of the following is not included in the ongoing and periodic assessment dealing with measurements and analyses of performance metrics with respect to internal audit's quality assurance and improvement program (QAIP)? a)money saved from audit work b)number of recs accepted c)customer satisfaction d)audit cycle time correct answer a)money saved from audit work not useful and practical measure due to difficulties in quantifying savings and problems in agreement with auditees and org's mgmt if the results of the assessment of the internal audit's quality assurance and improvement program indicate areas for improvement, which of the following will implement such improvement? a)a/c of the board b)cae c)ceo d)external auditor correct answer b)cae all of the following stakeholders receive results of internal/external quality program assessments of internal audit's activity from the cae except: a)functional manager b)senior manager c)bod d)external auditor correct answer a)functional manager
don't need to know results because there are too many functional managers to distribute material to and because the scope of the quality program affects the entire organization. which of the following is unique to external assessment of an internal audit's activity when compared to internal assessment? a)findings b)conclusions c)recommendations d)overall opinion correct answer d)overall opinion external=expressed opinion which of the following facilitates and reduces the cost of the external assessment of an internal audit's activity? a)periodic internal assessment performed within a short time before an external assessment b)periodic internal assessment performed within a short time in parallel an external assessment c)periodic internal assessment performed a long time before an external assessment d)periodic internal assessment performed within a short time after an external assessment correct answer a)periodic internal assessment performed within a short time before an external assessment which of the following is unique to external assessment of an internal audit's activity? a)best practices b)cost recoveries c)benchmarking d)expected deliverables correct answer d)expected deliverables CAE ensures scope clearly states expected deliverables of external assessment which of the following is common between internal assessment and external assessment of an internal audit's activity?
according to IIA standards, which of the following best describes the two general categories or types of fraud that concern most internal auditors? a)improper payments and tax fraud b)fraud designed to benefit the org and fraud perpetrated to the detriment of the org c)acceptance of bribes or kickbacks and improper related-party transactions d)acceptance of kickbacks or embezzlement and misappropriation of assets correct answer b)fraud designed to benefit the org and fraud perpetrated to the detriment of the org a company hired a highly qualified accounts payable manager who had been terminated from another company for alleged wrongdoing. six months later, the manager diverted 12k by sending duplicate payments of invoices to relative. control that might have prevented this situation would be to: a)adequately check prior employment backgrounds for all new employees b)not hire individuals who appear overqualified for a job c)verify educational background for all new employees d)check to see if close relatives work for payable vendors correct answer a)adequately check prior employment backgrounds for all new employees Red flags are conditions that indicate a higher likelihood of fraud. Which of the following is not considered a red flag? A. Management has delegated the authority to make purchases under a certain value to subordinates. B. An individual has held the same cash-handling job for an extended period without any rotation of duties. C. An individual handling marketable securities is responsible for making the purchases, recording the purchases, and reporting any discrepancies and gains/losses to senior management. D. The assignment of responsibility and accountability in the accounts receivable department is not clear. correct answer A. Management has delegated the authority to make purchases under a certain value to subordinates.
internal auditors and management have become increasingly concerned about computer fraud. which of the following control procedures would be least important in preventing computer fraud? a)program change control that requires a distinction between production programs and test programs b)testing of new application by users during the systems development process c)segregation of duties between the applications programmer and the program librarian function d)segregation of duties between the programmer and systems analyst correct answer d)segregation of duties between the programmer and systems analyst what is a data diddling technique? a)changing data before input to a computer system b)changing data during input to a computer system c)changing data during output from a computer system d)all of the above correct answer d)all of the above What is the Salami Technique? a)taking small amounts of assets b)using rounding-down concept c)stealing small amounts of money from bank accounts d)all of the above correct answer d)all of the above with respect to computer security and fraud, a legal liability exists to an organization under which of the following condition? a)when estimated security costs are greater than estimated losses b)when estimated security costs are equal to estimated losses c)when estimated security costs are less than estimated losses
