IIA-CIA-Part1 Practice Test

Which of the following characteristics could indicate high risk?

A.

Management decisions are made by a committee of mid to higher level management personnel.

B.

The company is not in a rapidly growing industry.

C.

The company's profitability is lower than the industry norm.

D.

Management turnover has been very low.

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.

A charitable organization provides substantial grants for important medical research.
Assuming marginal controls are in place,which of the following possible frauds or misuses
of organization assets should be considered the area of greatest risk?

A.

Senior executives are using company travel and entertainment funds for activities that
might be considered questionable.

B.

Purchases of office supplies are made from fictitious vendors.

C.

Grants are made to organizations associated with senior executives.

D.

A payroll clerk has added a fictitious employee.

According to the International Professional Practices Framework,which of the following is
the appropriate division of responsibilities for the coordination of internal and external audit efforts?

I.Oversight of Work
Coordination of Activities
Chief audit executive
Senior management
II.Board
Chief audit executive
III.Chief financial officer
Chief audit executive
IV.Board
Chief financial officer

A.

I

B.

II.

C.

III.

D.

IV.

According to the Standards,the organizational status of the internal audit activity:

A.

Must be sufficient to permit the accomplishment of its audit responsibilities.

B.

Is best when the reporting relationship is direct to the board of directors.

C.

Requires the board's annual approval of the audit schedules,plans,and budgets.

D.

Is guaranteed when the charter specifically defines its independence.