Free IIA-CIA-Part1 Exam Braindumps

The security department uncovered what appears to be a complex fraud in the accounting department. The CEO has requested the internal audit activity to investigate the fraud. If the internal audit staff lacks the expertise to conduct the investigation, how should the chief audit executive proceed?

1. A. Disclose the deficiency, and request that the investigation be reassigned to the first line of defense.
2. B. Proceed with the investigation, as internal auditors are not required to have fraud expertise.
3. C. Outsource the sensitive investigation to a third-party consultant with fraud expertise.
4. D. Select a member of the accounting department who is not involved in the fraud to join the investigation team in a consulting capacity.

Correct Answer: C

When auditing the award of a major contract, which of the following should an internal auditor suspect as a red flag for a bidding fraud scheme?
* 1. Subsequent change orders increase requirements for low-bid items.
* 2. Material contract requirements are different on the actual contract than on the request for bids.
* 3. A high percentage of employees are charged to indirect accounts.
* 4. Losing bidders are hired as subcontractors.

1. A. 1 only
2. B. 2 only
3. C. 1 and 3.
4. D. 2 and 4.

Correct Answer: D

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

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

Correct Answer: A

According to IIA guidance, which of the following is least compliant with the requirements regarding an internal auditor's need for objectivity?

1. A. An internal auditor assessed the effectiveness of controls over payroll software, which he had helped implement with a previous employer.
2. B. An internal auditor participated in an audit of controls around absenteeism, despite providing some consultation on controls in this area earlier in the year.
3. C. An internal auditor performed an assurance engagement for the effectiveness of accounts payable access controls, one of which he previously helped to design.
4. D. An internal auditor, previously employed in the quality assurance operations area, performed a consulting engagement for the operations manager.

Correct Answer: C

According to The IIA's Code of Ethics, which of the following statements is true?

1. A. When an internal auditor releases required information to a regulator, resulting in a significant loss through fines and penalties for the organization, he fails to add value.
2. B. When an internal auditor limits the scope of the audit engagement after learning that management is hiding relevant information, he demonstrates integrity.
3. C. When an internal auditor disagrees with the treatment received by workers in the organization's foreign subsidiary and alters the audit program to highlight the issue, he fails to demonstrate objectivity.
4. D. When an internal auditor continues with an audit engagement, despite the audit client's claims that the work performed is unnecessary and redundant he fails to demonstrate competency.

Correct Answer: C