IIA-CIA-Part1

IIA-CIA-Part1 practice questions, page 26 of 47, with answer review and explanations.

Question 126

Which of the following lists these audit steps in the correct chronological order? I. Create the engagement work program. II. Conduct the exit conference. III. Perform fieldwork. IV. Schedule the audit engagement. Issue a summary report of audit findings.

  1. I, IV, III, II, V.
  2. I, IV, II, III, V.
  3. IV, I, III, II, V.
  4. IV, III, I, V, II.

Question 127

Which of the following would have the least impact (either positive or negative) on an assessment of a department's control environment?

  1. The department managed long-term investments, including investment in derivatives and other financial instruments, to maximize return.
  2. The department manager sets a tone of honesty and integrity in all business dealings and this tone is emulated by department personnel.
  3. Many department functions were duplicated or verified by other department employees as part of the department's normal procedures.
  4. Audit tests designed to verify compliance with control procedures detected a general failure to follow standard procedures for transaction authorization.

Question 128

To ensure that due professional care has been taken during an audit engagement, an internal auditor should always:

  1. Ensure that all financial information related to the engagement is included in the audit plan and examined for irregularities.
  2. Document all audit tests completely.
  3. Consider the possibility of noncompliance or irregularities at all times during an engagement.
  4. Notify the audit committee of any noncompliance or irregularity discovered during an engagement.

Question 129

When using a risk assessment model to develop audit plans, it is essential that the chief audit executive take into account the:

  1. Results of the last audit.
  2. Planned visits by the external auditors during the upcoming year.
  3. Recent or expected changes in management direction and objectives.
  4. Dates of future board meetings.

Question 130

A bank uses a risk analysis matrix to quantify the relative risk of auditable entities. The analysis involves rating auditable entities on risk factors using a scale of 1 to 10, with 10 representing the greatest risk. A partial list of risk factors and the ratings given to three of the bank's departments is provided below: Department - Risk Factor - A - B - C - Control structure - Nature of assets in department - Dollar value of assets - Complexity of transactions - Which of the following statements regarding risk in the departments is true?

  1. As compared to departments A and C, department B has a stronger control system to compensate for the greater complexity of the department's transactions and dollar value of its assets.
  2. The internal audit activity should schedule audits of department B more often than audits of department C because of the relative control strength of department C as compared to department B.
  3. The nature of department A's control structure may be justified by the nature of the department's assets and the complexity of its transactions.
  4. The relative ranking of the departments in order of their risk, from greatest to least risk, is: A; C; B.