IIA-CIA-Part1 IIA Exam Questions and Free Practice Test

Question 25

Sometimes, internal audit staff may partner with operating managers to rank risks. Which of the following outcomes may be the most beneficial aspects of this strategy?
* 1. Reappraising risks levels.
* 2. Providing accurate information to management.
* 3. Marketing the internal audit activity.
* 4. Planning safeguards for assets in high-risk areas.

A. 1 and 2.

B. 1 and 3.

C. 2 and 3.

D. 3 and 4.

Correct Answer:B

Question 26

An organization invests its savings in a volatile stock with the potential for high gains rather than a mutual fund with a lower expected return and lower volatility. This best describes which of the following risk concepts?

A. Risk identification.

B. Risk appetite.

C. Risk capacity.

D. Risk tolerance.

Correct Answer:D

Question 27

According to IIA guidance, which of the following external groups is most likely to represent a liability risk, based on activities associated with the organization's corporate social responsibility program?

A. Consumers.

B. Activists.

C. Suppliers.

D. Investors.

Correct Answer:B

Question 28

Which of the following situations is most likely to impair internal audit objectivity?

A. An internal auditor reports both functionally and administratively to the chief financial officer (CFO).

B. An internal auditor, who was an accounts receivable intern for the organization three years prior, performs an audit of the accounts receivable cycle.

C. According to policy, the internal auditor must obtain approval from the CFO prior to requesting information for internal audit purposes.

D. An internal auditor performs an audit in a department that is led by the auditor's close friend.

Correct Answer:D

Question 29

Which of the following items should the chief audit executive disclose to senior management regarding the results of the internal audit activity's quality assessments?

A. The internal audit activity's plan for resource allocation.

B. The amount of the organization's potential loss prevented by the risk-based auditing of the internal audit activity.

C. The number of audits from the annual internal audit plan that were completed last year.

D. The qualifications and independence of the assessment Team.

Correct Answer:B

Question 30

Which of the following is an example of a directive control?

A. Segregation of duties.

B. Exception reports.

C. Incentive compensation plans.

D. Automated reconciliations.

Correct Answer:C

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