Certified Internal Auditor - Part 1, The Internal Audit Activitys Role in Governance, Risk, and Control Practice Test

IIA-CIA-Part1 Exam Format | Course Contents | Course Outline | Exam Syllabus | Exam Objectives

Test Detail:
The IIA-CIA-Part1 exam, also known as Certified Internal Auditor - Part 1, The Internal Audit Activity's Role in Governance, Risk, and Control, is administered by the Institute of Internal Auditors (IIA). This exam is designed to assess the knowledge and skills of individuals in the field of internal auditing. Here is a detailed description of the test, including the number of questions and time allocation, course outline, exam objectives, and exam syllabus.

Number of Questions and Time:
The IIA-CIA-Part1 exam consists of multiple-choice questions. The number of questions and time allocation for the exam are as follows:

- Number of Questions: Approximately 125
- Time: 2.5 hours (150 minutes)

Course Outline:
The IIA-CIA-Part1 exam covers various topics related to the role of internal audit in governance, risk, and control. The course outline typically includes the following key areas:

1. Mandatory Guidance:
- Understanding the International Professional Practices Framework (IPPF)
- Familiarity with the Code of Ethics and the Standards for the Professional Practice of Internal Auditing

2. Internal Control and Risk:
- Knowledge of internal control frameworks (e.g., COSO, COBIT)
- Understanding risk management concepts and techniques

3. Conducting Internal Audit Engagements:
- Planning, executing, and communicating the results of internal audit engagements
- Applying sampling methodologies and data analysis techniques

4. Fraud Risks and Controls:
- Identifying and assessing fraud risks
- Understanding fraud prevention, detection, and response measures

5. Governance and Business Ethics:
- Knowledge of governance structures and processes
- Understanding business ethics principles and practices

Exam Objectives:
The IIA-CIA-Part1 exam aims to evaluate candidates' understanding of the role of internal audit in governance, risk, and control. The key objectives of the exam include:

1. Knowledge of Internal Audit Role:
- Understanding the purpose, authority, and responsibility of the internal audit function
- Familiarity with the professional standards and guidelines governing internal auditing

2. Internal Control and Risk Management:
- Understanding the principles of internal control and their application
- Knowledge of risk management concepts and techniques

3. Conducting Internal Audit Engagements:
- Ability to plan, execute, and communicate the results of internal audit engagements
- Applying appropriate sampling methodologies and data analysis techniques

4. Fraud Risks and Controls:
- Ability to identify and assess fraud risks
- Knowledge of fraud prevention, detection, and response measures

5. Governance and Business Ethics:
- Understanding governance structures and processes and their impact on internal audit
- Knowledge of business ethics principles and practices

Exam Syllabus:
The IIA-CIA-Part1 exam syllabus outlines the specific knowledge areas and topics that candidates need to be familiar with to successfully pass the exam. The syllabus covers the following content areas:

1. Mandatory Guidance (35-45%)
2. Internal Control and Risk (25-35%)
3. Conducting Internal Audit Engagements (28-38%)
4. Fraud Risks and Controls (5-15%)
5. Governance and Business Ethics (5-15%)

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IIA-CIA-Part1
Certified Internal Auditor - Part 1, The Internal
Audit Activitys Role in Governance, Risk, and Control
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Question: 555
During a payroll audit of a large organization, an auditor noted that the assistant personnel director is responsible
for many aspects of the computerized payroll system, including adding new employees in the system; entering
direct-deposit information for employees; approving and entering all payroll changes; and providing training for
system users. After discussions with the director of personnel, the auditor concluded that the director was not
comfortable dealing with information technology issues and felt obliged to support all actions taken by the assistant
director. The auditor should:
A. Continue to follow the engagement program because the engagement scope and objectives have already
been discussed with management.
B. Review the engagement program to ensure testing of direct deposits to employee bank accounts is
adequately covered.
C. Recommend to the chief audit executive that a fraud investigation be started.
D. Test a sample of payroll changes to ensure that they were approved by the assistant director before being
processed.
Answer: B
Question: 556
Which of the following is an example of sharing risk?
A. An organization redesigned a business process to change the risk pattern.
B. An organization outsourced a portion of its services to a third-party service provider.
C. An organization sold an unprofitable business unit to its competitor.
D. In order to spread total risk, an organization used multiple vendors for critical materials.
Answer: B
Question: 557
Which of the following components influences the risk consciousness of an organization�s people and is the basis
for all other components of enterprise risk management?
A. Objective setting.
B. Information and Communication.
C. Risk Assessment.
D. Internal Environment.
Answer: D
rale answer.
Question: 558
When internal auditors perform consulting services that add value and improve an organization�s operations, these
services:
A. Impair the internal auditors� objectivity with respect to an assurance service involving the same
engagement client.
B. Would preclude the achievement of assurance from the consulting engagement.
C. Should be consistent with the internal audit activity�s empowerment reflected in the charter.
D. Impose no responsibility to communicate information other than to the engagement client.
Answer: C
Question: 559
A manufacturing firm uses hazardous materials in the production of its products. An audit of the firm�s processes
related to hazardous materials should include.
A. Recommending an environmental management system as part of policies and procedures.
II.Verifying the existence of tracking records for these materials from creation to destruction.
III.Using consultants to avoid self-incrimination of the firm in the event illegalities were detected in an
environmental audit.
IV.Evaluating the cost provided for in an environmental liability accrual account.
B. II only
C. III and IV only
D. I, II, and IV only
E. I, III, and IV only
Answer: C
appropriate.
Question: 560
An organization�s accounts payable function improved its internal controls significantly after it received an
unsatisfactory audit report.
When planning a follow-up audit of the function, what level of detection risk should be expected if the audit and
sampling procedures used are unchanged from the prior audit?
A. Detection risk is lower because control risk is lower.
B. Detection risk is lower because control risk is higher.
C. Detection risk is higher because control risk is lower.
D. Detection risk is unchanged although control risk is lower.
Answer: D
Question: 561
Which of the following risk assessment tools would best facilitate the matching of controls to risks?
A. Control matrix.
B. Internal control questionnaire.
C. Control flowchart.
D. Program evaluation and review technique (PERT) analysis.
Answer: A
Question: 562
Which of the following statements regarding segregation of duties is true?
A. When evaluating an organization�s policy on segregation of duties, employee competence does not need to
be considered.
B. An organizational chart provides an accurate definition of segregation of duties.
C. A restrictive segregation-of-duties policy can help improve an organization�s communication.
D. Policies on segregation of duties in information systems must recognize the difference between logical and
physical access to assets.
Answer: D
exact answer.
Question: 563
An auditor plans to analyze customer satisfaction, including. (1) customer complaints recorded by the customer
service department during the last three months; (2) merchandise returned in the last three months; and (3)
responses to a survey of customers who made purchases in the last three months.
Which of the following statements regarding this audit approach is correct?
A. Although useful, such an analysis does not address any risk factors.
B. The survey would not consider customers who did not make purchases in the last three months.
C. Steps 1 and 2 of the analysis are not necessary or cost-effective if the customer survey is comprehensive.
D. Analysis of three months� activity would not evaluate customer satisfaction.
Answer: B
Question: 564
Which of the following would not be a factor for senior management to consider when determining the internal
audit activity�s role in an organization�s risk management process?
A. The extent to which the internal audit activity is outsourced.
B. The maturity level of risk management practices in the organization.
C. The competency of the internal auditors in risk management.
D. The nature of the business and the environment in which the organization operates.
Answer: A
Question: 565
Which of the following best describes the underlying premise of the COSO enterprise risk management
framework?
A. Management should set objectives before assessing risk.
B. Every entity exists to provide value for its stakeholders.
C. Policies are established to ensure that risk responses are performed effectively.
D. Enterprise risk management can minimize the impact and likelihood of unanticipated events.
Answer: B
/( 48(67,216

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