A Review Of Simulation IIA-CIA-Part1 Simulations

NEW QUESTION 1
Which of the following is the most common method of fraud detection?

• A. Analytical reviews of high-risk areas.
• B. Detective controls built into the daily processes.
• C. Unannounced audits or reviews of programs or departments.
• D. Tips received from employees or citizens.

Answer: D

NEW QUESTION 2
An internal auditor is performing analytical reviews as part of an audit of a supermarket's merchandising department. Because the economy has declined since midyear, the auditor can expect to encounter which of the following?

• A. Higher inventory turnover.
• B. Higher operating margin.
• C. Lower obsolete stock disposal.
• D. Lower sales volume.

Answer: D

NEW QUESTION 3
An internal auditor is conducting an assessment of the organization's fraud prevention program using the COSO enterprise risk management framework. According to this framework, which of the following activities would fall under the control environment component for preventing fraud?
* 1. The organization uses an automated authority approval matrix to control payments.
* 2. The organization has a whistleblower hotline that is available to employees.
* 3. Annually, every manager completes a comprehensive fraud assessment of his or her department.
* 4. Annually, the organization reviews and communicates the code of expected behavior.

• A. 1 and 2.
• B. 1 and 3.
• C. 2 and 3.
• D. 2 and 4.

Answer: D

NEW QUESTION 4
An internal audit activity includes in its audit reports the assertion that its work is performed in conformance with the International Standards for the Professional Practice of Internal Auditing {Standards). A recent external quality assessment concluded that the internal audit activity had substantial deficiencies that impact its overall operations. According to IIA guidance, which of the following is the most appropriate action for issuing future audit reports?

• A. Refrain from indicating that the internal audit activity operates in conformance with the Standards until the chief audit executive confirms that the internal audit activity has addressed all areas of nonconformance and the audit committee has been notified.
• B. Refrain from indicating that the internal audit activity operates in conformance with the Standards until another external assessment confirms that the significant areas of nonconformance have been addressed.
• C. Indicate that the internal audit activity operates in partial conformance with the Standards, as the internal audit activity has a quality assurance and improvement program in place to address deficiencies and has met the requirement for conducting an external assessment.
• D. Update and reissue previous audit reports, removing the assertion that the internal audit activity operates in conformance with the Standards, and distribute them to all parties who received the original reports.

Answer: B

NEW QUESTION 5
Which of the following is the most common way that occupational fraud is detected?

• A. Internal audits.
• B. Whistleblower hotline.
• C. Key controls.
• D. External audits.

Answer: B

NEW QUESTION 6
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?

• A. Negotiation and conflict resolution.
• B. Project management.
• C. Financial accounting.
• D. Ethics and fraud.

Answer: B

NEW QUESTION 7
What is the purpose of a secondary control?

• A. It replaces primary controls that are either ineffective or cannot fully mitigate a risk.
• B. It partially reduces the residual risk level when a key control does not operate effectively.
• C. lt combines with other controls to help reduce significant risk exposures to an acceptable level.
• D. It helps to ensure the completeness and accuracy of automated controls in a system environment.

Answer: C

NEW QUESTION 8
Which of the following factors have the greatest influence on the independence of the internal audit activity?

• A. Quality assessments and cultural biases of the internal audit activity.
• B. Rotational assignments and familiarity of the internal audit activity.
• C. Employee incentives and self review of the internal audit activity.
• D. Organizational positioning and scope control of the internal audit activity.

Answer: D

NEW QUESTION 9
According to IIA guidance, which of the following statements describes one of the similarities between assurance and consulting services?

• 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.

Answer: A

NEW QUESTION 10
During an audit engagement, the internal auditor discussed a risk mitigation recommendation with the manager of the area under review. The manager disagreed with the risk assessment and recommendation. The two failed to come up with an alternative solution, and the auditor decided to proceed with including the original recommendation in the engagement report. Which of the following is especially important in dealing with this type of situation?

• A. Soft skills in communication, negotiation, and collaboration.
• B. Technical skills in the area under review.
• C. Professional qualifications and certification in internal auditing.
• D. Confidentiality and independence.

Answer: A

NEW QUESTION 11
A new internal audit activity is creating its first charter. According to IIA guidance, which of the following objectives would be appropriate for inclusion in the charter?

• A. Continuously monitor the organization's overall risk activities in relation to its risk appetite.
• B. Evaluate the adequacy and effectiveness of the organization's governance activities.
• C. Oversee the establishment and administration of an effective risk management program.
• D. Assist management in implementing recommended control improvements.

Answer: C

NEW QUESTION 12
When developing the organization's first risk universe, which of the following would the chief audit executive be least likely to consider?

• A. The amount of risk that an organization is willing to seek or accept.
• B. The extent and degree of interdependency for identified key risks.
• C. The boundaries established to manage the amount of risk taken.
• D. The exposure to risks following management's risk responses.

Answer: D

NEW QUESTION 13
Which of the following is a detective control strategy against fraud?

• A. Requiring employees to attend ethics training.
• B. Performing background checks on employees.
• C. Implementing a control self-assessment.
• D. Performing a surprise audit.

Answer: D

NEW QUESTION 14
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?

• 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.

Answer: C

NEW QUESTION 15
Which of the following is the best way to detect fraud?

• A. Conduct anti-fraud training.
• B. Perform background investigations.
• C. Implement process controls.
• D. Activate a whistleblower hotline.

Answer: D

NEW QUESTION 16
Which of the following is an example of a management control technique?

• A. A budget.
• B. A risk assessment.
• C. The board of directors.
• D. The control environment.

Answer: A

NEW QUESTION 17
Which of the following is a common type of payroll fraud?

• A. Unauthorized overtime.
• B. Fictitious employees.
• C. Unearned bonuses or commissions.
• D. Skimming.

Answer: B

NEW QUESTION 18
In the area of business acumen, which of the following competencies would be the sole responsibility of an internal audit staff member?

• A. Maintaining industry-specific knowledge appropriate to the organization.
• B. Assessing how IT contributes to organization objectives, risks, and relevance to audit.
• C. Maintaining technical aspects of accounting standards and reporting processes.
• D. Understanding regulatory and legal framework and assessing its relevance.

Answer: D

NEW QUESTION 19
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