IIA-CIA-Part1 Practice Test

In publicly held companies,management often requires the internal audit activity's
involvement with quarterly financial statements that are made public and used internally.
Which of the following is generally not a reason for such involvement?

A.

Management may be concerned about its reputation in the financial markets.

B.

Management may be concerned about potential penalties that could occur if quarterly
financial statements are misstated.

C.

The Standards state that internal auditors should be involved with reviewing quarterly
financial statements.

D.

Management may perceive that having quarterly financial information examined by the
internal auditors enhances its value for internal decision making.

During the planning phase of an audit of suspected overbilling on contracts for security
services,an auditor should perform all of the following except:

A.

Interviewing an official of the security services company to determine the cause of
recent increases in billings for services.

B.

Interviewing the manager who requested the audit engagement.

C.

  Obtaining a copy of the contract between the two organizations.

D.

Preparing an engagement program.

Which of the following would be the least desirable criteria against which to judge current
operations of a company's treasury function?

A.

The operations of the treasury function as documented during the last audit engagement.

B.

Company policies and procedures delegating authority and assigning responsibilities.

C.

Finance textbook illustrations of generally accepted good treasury function practices.

D.

Codification of best practices of the treasury function in relevant industries.

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.

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.