Free IIA-CIA-Part1 Exam Dumps

Question 11

An internal auditor is evaluating techniques management uses to mitigate risks within a particular product division. Which of the following is an example of risk reduction?

A. Management sells the product division to a competitor.
B. Management outsources the product division to a third party.
C. Management allows the product division to remain unchanged.
D. Management modifies the product division to minimize errors.

Correct Answer:D

Question 12

Which of the following actions should the audit committee take to promote organizational independence for the internal audit activity?

A. Delegate final approval of the risk-based internal audit plan to the chief audit executive (CAE).
B. Approve the annual budget and resource plan for the internal audit activity.
C. Assist the CAE with hiring objective and competent internal audit staff.
D. Encourage the CAE to communicate and coordinate with the external auditor.

Correct Answer:A

Question 13

Which of the following is a common type of payroll fraud?

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

Correct Answer:B

Question 14

Which of the following offers the best evidence that the internal audit activity has achieved organizational independence?

A. An independent third party has assessed the organization's system of internal controls to be adequate and effective.
B. The chief audit executive reports both functionally and administratively to the CEO.
C. The internal audit charter is drafted properly and approved by the appropriate parties.
D. The mission statement and strategy of the internal audit activity demonstrates alignment to organizational objectives.

Correct Answer:B

Question 15

Which of the following best explains why integrity is a necessary personal quality for internal auditors at all levels?

A. Internal auditor integrity enables stakeholders to constantly question the work of the internal audit activity.
B. Internal auditor integrity enables the internal auditor to avoid being challenged by any party in the organization.
C. Internal auditor integrity enables the internal audit activity to be able to demonstrate independence.
D. Internal auditor integrity enables users of internal auditors' work to make important business decisions.

Correct Answer:D