IIA-CIA-Part1

IIA-CIA-Part1 practice questions, page 28 of 47, with answer review and explanations.

Question 136

An internal audit activity's work schedule should always provide sufficient information to the audit committee to enable it to determine whether the proposed engagements:

  1. Support the organization's objectives.
  2. Include sufficient fraud awareness.
  3. Will likely result in the detection of any major risk exposures.
  4. Are likely to detect control deficiencies.

Question 137

The chief audit executive for an organization has just completed a risk assessment process, identified the areas with the highest risk, and assigned an audit priority to each. Which of the following statements is true and consistent with the International Professional Practices Framework? I. 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.

  1. I only
  2. III only
  3. II and III only
  4. I, II, and III.

Question 138

What role, if any, should the internal audit activity have in the process of following up on observations and recommendations made by the external auditors?

  1. The internal audit activity should have no role in this process in order to ensure independence.
  2. The internal audit activity should become involved only if the chief audit executive has sufficient evidence that the follow-up is not occurring.
  3. The internal audit activity should review the adequacy and effectiveness of management's follow-up actions.
  4. The internal audit activity should become involved only if specifically requested by management or the board of directors.

Question 139

A company has entered into a $20, 000, 000 fixed-price contract with a general contractor for the construction of a new retail outlet. For this contract, which of the following would represent the greatest risk?

  1. Excessive labor charged to the project.
  2. Poor physical protection of materials and equipment.
  3. Failure to complete the project within budget.
  4. Substitution of inferior materials.

Question 140

In selecting an instructional strategy for developing internal audit staff, a chief audit executive should first review the:

  1. Department's budget constraints.
  2. Internal auditors' personal development needs.
  3. Content of potential training courses.
  4. Organization's objectives.