1
CIA Exam Part 1 - Practice Exam
The CAE is considering different methods of providing training in personal
communication skills for the entire internal audit staff. Which of the following
methodologies would be the most effective means of delivering such training?
A) Computer-based training in human relations skills
B) Individual coaching by a professional communications specialist
C) Self-study booklets explaining communication theory
D) Lecture course on communications delivered by a motivational speaker - -
Correct Answer-B) Individual coaching by a professional communications
specialist
Which is an acceptable role for the internal audit activity in the risk
management process?
A) No role
B) Managing specific risks if defined in the internal audit plan
C) Active, continuous support in the process such as leadership of oversight
committees
D) Managing and coordinating the risk management process - -Correct
Answer-A) No role
Which is a required type of knowledge, skill, and other competency for an
internal auditor?
1
, 2
A) Basic comprehension of internal audit standards, procedures, and
techniques required in performing engagements
B) An understanding of management principles and good business practices
so deviations can be recognized and evaluated
C) Proficiency in accounting principles and techniques for all auditors
D) Proficiency in subjects such as accounting, economics, commercial law,
quantitative methods, and IT - -Correct Answer-B) An understanding of
management principles and good business practices so deviations can be
recognized and evaluated
The bank's internal audit charter neither authorizes nor forbids the internal
audit activity to perform assurances for outside parties. Which of the following
conditions apply to providing the requested service?
A) The vice president of finance may authorize the chief audit executive to
schedule the engagement without amending the charter.
B) Providing assurances to outside parties is a violation of the Standards.
C) The vice president of finance needs approval of the chief financial officer
or the audit committee before authorizing the chief audit executive to
schedule the engagement without amending the charter.
D) The charter should be amended to allow the internal audit activity to
provide assurance services to outside parties. - -Correct Answer-D) The
charter should be amended to allow the internal audit activity to provide
assurance services to outside parties.
How should the process be handled when considering risk response (or risk
treatment) when the organization uses an ERM environment?
2
, 3
A) As an iterative process that looks at the big picture but also departments
and functions
B) As a waterfall process that considers the risks at a holistic level
C) As a process that sets the risk tolerance at the enterprise level and
ensures that all departments adhere to it
D) As a method for setting control activities that ensures that collective risk
limits are not exceeded in any individual instances - -Correct Answer-A) As
an iterative process that looks at the big picture but also departments and
functions
An internal auditor is assigned financial audits. She performs the audits out of
the audit department, downloads records electronically, communicates with
the client through email, and uses audit software. Is the internal auditor
demonstrating the required knowledge, skills, and competencies for an IA?
A) Yes, the auditor is working very efficiently by taking advantage of
technology
B) No, financial audits require working more closely with top finance
executives due to the need to provide assurance on ICFR for this type of
audit client
C) No, by limiting contact with the client, oral communications skills are not
being used to clearly and effectively convey items such as engagement
objectives, evaluations, conclusions, and recommendations.
D) Yes, the auditor is avoiding taking up too much of the audit client's time,
which is value-added, and is demonstrating professional skepticism by
focusing primarily on financial - -Correct Answer-C) No, by limiting contact
with the client, oral communications skills are not being used to clearly and
effectively convey items such as engagement objectives, evaluations,
conclusions, and recommendations.
3
, 4
Goods received from a certain supplier occasionally arrive without a proper
bill of lading. In these situation, the receiving clerk is directed to telephone the
supplier and request a bill of lading by fax so that he or she can compare
what was actually received to the bill and research any discrepancies. Which
of the following is this type of control?
A) application control
B) preventative control
C) governance control
D) detective control - -Correct Answer-D) detective control
An adequate system of internal controls is most likely to detect an irregularity
perpetrated by a
A) single manager
B) single employee
C) group of managers in collusion
D) group of employees in collusion - -Correct Answer-B) single employee
Which activity should be treated as a clear impairment of an internal auditor's
independence and objectivity?
A) Overseeing installation of new IT equipment to ensure compliance with the
Orgs objectives
B) Participating in a team that assesses IT acquisition possibilities
4
CIA Exam Part 1 - Practice Exam
The CAE is considering different methods of providing training in personal
communication skills for the entire internal audit staff. Which of the following
methodologies would be the most effective means of delivering such training?
A) Computer-based training in human relations skills
B) Individual coaching by a professional communications specialist
C) Self-study booklets explaining communication theory
D) Lecture course on communications delivered by a motivational speaker - -
Correct Answer-B) Individual coaching by a professional communications
specialist
Which is an acceptable role for the internal audit activity in the risk
management process?
A) No role
B) Managing specific risks if defined in the internal audit plan
C) Active, continuous support in the process such as leadership of oversight
committees
D) Managing and coordinating the risk management process - -Correct
Answer-A) No role
Which is a required type of knowledge, skill, and other competency for an
internal auditor?
1
, 2
A) Basic comprehension of internal audit standards, procedures, and
techniques required in performing engagements
B) An understanding of management principles and good business practices
so deviations can be recognized and evaluated
C) Proficiency in accounting principles and techniques for all auditors
D) Proficiency in subjects such as accounting, economics, commercial law,
quantitative methods, and IT - -Correct Answer-B) An understanding of
management principles and good business practices so deviations can be
recognized and evaluated
The bank's internal audit charter neither authorizes nor forbids the internal
audit activity to perform assurances for outside parties. Which of the following
conditions apply to providing the requested service?
A) The vice president of finance may authorize the chief audit executive to
schedule the engagement without amending the charter.
B) Providing assurances to outside parties is a violation of the Standards.
C) The vice president of finance needs approval of the chief financial officer
or the audit committee before authorizing the chief audit executive to
schedule the engagement without amending the charter.
D) The charter should be amended to allow the internal audit activity to
provide assurance services to outside parties. - -Correct Answer-D) The
charter should be amended to allow the internal audit activity to provide
assurance services to outside parties.
How should the process be handled when considering risk response (or risk
treatment) when the organization uses an ERM environment?
2
, 3
A) As an iterative process that looks at the big picture but also departments
and functions
B) As a waterfall process that considers the risks at a holistic level
C) As a process that sets the risk tolerance at the enterprise level and
ensures that all departments adhere to it
D) As a method for setting control activities that ensures that collective risk
limits are not exceeded in any individual instances - -Correct Answer-A) As
an iterative process that looks at the big picture but also departments and
functions
An internal auditor is assigned financial audits. She performs the audits out of
the audit department, downloads records electronically, communicates with
the client through email, and uses audit software. Is the internal auditor
demonstrating the required knowledge, skills, and competencies for an IA?
A) Yes, the auditor is working very efficiently by taking advantage of
technology
B) No, financial audits require working more closely with top finance
executives due to the need to provide assurance on ICFR for this type of
audit client
C) No, by limiting contact with the client, oral communications skills are not
being used to clearly and effectively convey items such as engagement
objectives, evaluations, conclusions, and recommendations.
D) Yes, the auditor is avoiding taking up too much of the audit client's time,
which is value-added, and is demonstrating professional skepticism by
focusing primarily on financial - -Correct Answer-C) No, by limiting contact
with the client, oral communications skills are not being used to clearly and
effectively convey items such as engagement objectives, evaluations,
conclusions, and recommendations.
3
, 4
Goods received from a certain supplier occasionally arrive without a proper
bill of lading. In these situation, the receiving clerk is directed to telephone the
supplier and request a bill of lading by fax so that he or she can compare
what was actually received to the bill and research any discrepancies. Which
of the following is this type of control?
A) application control
B) preventative control
C) governance control
D) detective control - -Correct Answer-D) detective control
An adequate system of internal controls is most likely to detect an irregularity
perpetrated by a
A) single manager
B) single employee
C) group of managers in collusion
D) group of employees in collusion - -Correct Answer-B) single employee
Which activity should be treated as a clear impairment of an internal auditor's
independence and objectivity?
A) Overseeing installation of new IT equipment to ensure compliance with the
Orgs objectives
B) Participating in a team that assesses IT acquisition possibilities
4
