Pass the IIA CIA Challenge Exam IIA-ACCA Questions and answers with CertsForce

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Viewing questions 61-75 out of questions
Questions # 61:

New environmental regulations require the board to certify that the organization's reported pollutant emissions data is accurate. The chief audit executive (CAE) is planning an audit to provide assurance over the organization's compliance with the environmental regulations. Which of the following groups or individuals is most important for the CAE to consult to determine the scope of the audit?

Options:

A.

The audit committee of the board.


B.

The environmental, health, and safety manager.


C.

The organization's external environmental lawyers.


D.

The organization's insurance department.


Expert Solution
Questions # 62:

In which of the following functions would fraud be most likely to occur?

Options:

A.

Maintaining custody of inventory records.


B.

Collecting payments on accounts.


C.

Approving changes to employee records.


D.

Preparing customer statements.


Expert Solution
Questions # 63:

Which of the following types of fraud includes embezzlement?

Options:

A.

Fraudulent statements.


B.

Bribery.


C.

Misappropriation of assets.


D.

Corruption.


Expert Solution
Questions # 64:

According to The MA Global Internal Audit Competency Framework, which of the following areas of training would best assist the internal audit activity in improving its use of tools and techniques?

Options:

A.

Negotiation and conflict resolution.


B.

Project management.


C.

Financial accounting.


D.

Ethics and fraud.


Expert Solution
Questions # 65:

According to IIA guidance, which of the following must internal auditors consider to conform with the requirements for due professional care during a consulting engagement?

1. The cost of the engagement, as it pertains to audit time and expenses in relation to the potential benefits.

2. The needs and expectation of clients, including the nature, timing, and communication of engagement results.

3. The application of technology-based audit and other data analysis techniques, where appropriate.

4. The relative complexity and extent of work needed to achieve the engagement's objectives.

Options:

A.

1, 2, and 3


B.

1, 2, and 4


C.

1, 3, and 4


D.

2, 3, and 4


Expert Solution
Questions # 66:

Which of the following behaviors could represent a significant ethical risk if exhibited by an organization's board?

Options:

A.

Requesting a private meeting with senior management, without the presence of the chief audit executive.


B.

Intervening during an audit involving ethical wrongdoing.


C.

Discussing periodic reports of ethical breaches.


D.

Authorizing an investigation of an unsafe product.


Expert Solution
Questions # 67:

Which of the following statements describes impairment to the internal auditor's objectivity?

Options:

A.

An internal auditor reviews a purchasing agent's contract drafts prior to their execution.


B.

An internal auditor reduces the scope of an audit engagement due to budget restrictions.


C.

An internal auditor receives a promotional gift that is available to the organization's employees.


D.

An internal auditor performs an assessment of the operations for which he was recently responsible.


Expert Solution
Questions # 68:

Upon joining the internal audit activity, each new auditor receives a copy of the audit handbook. Which of the following handbook policies has the greatest risk of compromising audit objectivity?

Options:

A.

Internal auditors should obtain 80 hours of continuing professional education every two years, 20 of which should be audit-related, and the remainder may be operations-related.


B.

Internal auditors should rotate to other areas of the organization for nonaudit assignments to gain an understanding of the organization's operations.


C.

Internal auditors should have direct and unrestricted access to personnel and information throughout the organization and the governing board.


D.

Internal auditors should undergo annual performance appraisals conducted by the chief audit executive, who reports administratively to the chief financial officer.


Expert Solution
Questions # 69:

An internal audit activity is using the auditing-by-element approach to audit the organization's controls around corporate social responsibility. Which of the following would be an element for the internal audit activity to consider?

Options:

A.

Working conditions.


B.

Employees' families.


C.

Marketplace competition.


D.

Shareholders and investors.


Expert Solution
Questions # 70:

An internal auditor in a small broadcasting organization was assigned to review the revenue collection process. The auditor discovered that some checks from three customers were never recorded in the organization's financial records. Which of the following documents would be the least useful for the auditor to verify the finding?

Options:

A.

Bank statements.


B.

Customer confirmation letters.


C.

Copies of sales invoices.


D.

Copies of deposit slips.


Expert Solution
Questions # 71:

An IT contractor applied for an internal audit position at a bank. The contractor worked for the bank's IT security manager two years ago. If the audit manager interviewed the contractor and wants to extend a job offer, which of the following actions should the chief audit executive pursue?

Options:

A.

Allow the audit manager to hire the contractor and state that the individual is free to perform IT audits, including security.


B.

Not allow the audit manager to hire the contractor, as it would be a conflict of interest.


C.

Allow the audit manager to hire the contractor, but state that the individual is not allowed to work on IT security audits for one year.


D.

Not allow the audit manager to hire the contractor and ask the individual to apply again in one year.


Expert Solution
Questions # 72:

According to IIA guidance, which of the following statements describes one of the similarities between assurance and consulting services?

Options:

A.

When planning assurance and consulting engagements, internal auditors must consider the strategies and objectives of the activity being reviewed.


B.

Internal auditors determine the engagement objectives, scope, and work program for both assurance and consulting services.


C.

Internal auditors must not provide assurance or consulting services for an activity for which they had responsibility within the previous year.


D.

Both assurance and consulting services generally involve the internal auditor, the area under review, senior management, and the board.


Expert Solution
Questions # 73:

A chief audit executive (CAE) is reviewing the internal audit activity's performance and is concerned that the average number of revisions to findings is steadily rising, making it increasingly difficult to trace the finding to the supporting evidence and workpapers. According to MA guidance, which of the following elements of the internal audit activity's quality assurance and improvement program would provide the CAE with the most helpful insight into the cause of this problem?

Options:

A.

The overall effectiveness of the internal audit activity's periodic self assessments.


B.

The type of audit productivity and performance statistics reported.


C.

The adequacy of the day-to-day supervision and review process.


D.

The scope and frequency of external assessments.


Expert Solution
Questions # 74:

Which of the following combinations of conditions is most likely a red flag for fraud?

Options:

A.

The practice of surprise audits and the implementation of an employee support program.


B.

Hiring an employee with a prior fraud conviction and yearly management review.


C.

Occasional accounting department overrides and discontinuation of the anonymous fraud hotline due to infrequent use.


D.

A veteran employee in upper management experiencing financial difficulties and recently implemented enhanced controls.


Expert Solution
Questions # 75:

According to IIA guidance, which of the following describes the primary reason to implement environmental and social safeguards within an organization?

Options:

A.

To enable Triple Bottom Line reporting capability.


B.

To facilitate the conduct of risk assessment.


C.

To achieve and maintain sustainable development.


D.

To fulfill regulatory and compliance requirements.


Expert Solution
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