IIA-CIA-Part1 Practice Test

In order to ensure that the internal auditors have the objectivity required by the
Standards,the chief audit executiveshould:

A.

Demonstrate willingness to include in engagement final communications all matters
believed to be important.

B.

Require all auditors to sign statements attesting to their independent mental attitudes
and honest belief in their work product.

C.

Carefully assign personnel to individual audit engagements and require auditors to
disclose all conflicts of interest.

D.

Appraise each auditor's performance on each audit assignment.

Regarding an organization's decision to retain an external audit firm,the chief audit executive (CAE)should:

A.

Work with the organization's chief financial officer to evaluate the external auditor's
performance and together make the decision.

B.

Not be involved in this decision process as it would compromise the CAE's objectivity.

C.

Evaluate the external auditor's performance and retain the external auditor if quality and
cost criteria are met.

D.

Assist the audit committee by facilitating the development of an appropriate evaluation process.

Which of the following procedures would provide the best evidence of the effectiveness of a
credit-granting function?

A.

Observe the process.

B.

Review the trend in receivables write-offs.

C.

Ask the credit manager about the effectiveness of the function.

D.

Check for evidence of credit approval on a sample of customer orders.

The chief audit executive's responsibility regarding control processes includes:

A.

Assisting senior management and the audit committee in the development of an annual
assessment about internal control.

B.

Overseeing the establishment of internal control processes.

C.

Maintaining the organization's governance processes.

D.

Ensuring that the internal audit activity assesses all control processes annually.

In order to provide the most useful information for an organization's risk management
decisions,which of the following should be assessed?

A.

Risk levels for future events based on the degree of uncertainty of those events and
their cost of mitigation.

B.

Inherent and control risks and their impact on the extent of financial misstatements.

C.

Risk levels of current and future events,their effect on the achievement of the
organization's objectives,and their underlying causes.

D.

Risk levels of current and future events,their impact on the organization's mission,and
the potential for the elimination of existing risk factors.