IIA-CIA-Part1

IIA-CIA-Part1 practice questions, page 27 of 47, with answer review and explanations.

Question 131

An internal quality assessment of the internal audit activity should provide the chief audit executive with.

  1. Recommendations for improvement.
  2. Objectives for internal audit engagements.
  3. Confirmation of action on past audit recommendations.
  4. Appraisals of internal audit staff performance.

Question 132

In the annual audit of the financial statements of a company with high inherent risk and a very strong control system, the external auditor may be able to allow detection risk to rise because.

  1. Audit risk has been reduced.
  2. Control risk has been assessed at a lower level.
  3. The company's operations are very susceptible to misstatements.
  4. Whenever inherent risk is high, control risk is disregarded.

Question 133

An organization receives the most value from an internal audit activity's enterprise-wide risk assessment when the auditor:

  1. Focuses primarily on enterprise-level risks.
  2. Considers activities at all levels of the organization.
  3. Reviews special projects and new initiatives.
  4. Validates supporting financial and operational data.

Question 134

An organization's external auditor has prepared a list of risks and issues and has recommended to senior management that the internal audit activity focus on these items. Senior management has forwarded the list to the chief audit executive (CAE). The CAE should:

  1. Incorporate the external auditor's requirements into the internal audit plan.
  2. Ignore the external auditor's requirements because they are outside of the internal audit activity's planned scope of work.
  3. Consider the issues raised by the external auditor for possible inclusion in the planned scope of work.
  4. Report the risks and issues to the audit committee for possible future attention.

Question 135

The audit committee has asked the chief audit executive (CAE) to assist in the selection of a new external audit firm. Which of the following is an appropriate action by the CAE?

  1. The CAE and two managers from the audit staff review the bids and select one firm to meet with the audit committee for the committee's approval.
  2. The CAE develops a formal set of criteria for the audit committee to use in selecting the external auditor.
  3. The CAE, chief financial officer, and controller review the bids, interview two firms, and recommend one of the two firms to the audit committee for its approval.
  4. The CAE declines to participate in the process because providing this assistance would result in compromising the internal audit activity's objectivity.