IIA IIA-CIA-Part1 Essentials of Internal Auditing Version: Demo [ Total Questions: 10] Web: www.certsout.com Email: support@certsout.com IMPORTANT NOTICE Feedback We have developed quality product and state-of-art service to ensure our customers interest. If you have any suggestions, please feel free to contact us at feedback@certsout.com Support If you have any questions about our product, please provide the following items: exam code screenshot of the question login id/email please contact us at support@certsout.com and our technical experts will provide support within 24 hours. Copyright The product of each order has its own encryption code, so you should use it independently. Any unauthorized changes will inflict legal punishment. We reserve the right of final explanation for this statement. Certs Exam IIA - IIA-CIA-Part1 Category Breakdown Category Number of Questions Governance, Risk Management, and Control 5 Independence and Objectivity 1 Proficiency and Due Professional Care 1 Foundations of Internal Auditing 3 TOTAL 10 Exam Topic Breakdown Exam Topic Number of Questions Topic 4 : Exam Pool D 2 Topic 1 : Exam Pool A 2 Topic 6 : Exam Pool F 2 Topic 3 : Exam Pool C 2 Topic 2 : Exam Pool B 2 Topic 5 : Exam Pool E 0 TOTAL 10 Pass with Valid Exam Questions Pool 1 of 12 Certs Exam IIA - IIA-CIA-Part1 Topic 4, Exam Pool D Question #:1 - (Exam Topic 4) - [Governance, Risk Management, and Control] Which of the following is the best example of a risk appetite statement concerning an investment portfolio? A. We will request CEO approval for investments greater than S20 million and board approval for investments greater than $50 million. B. We will hedge 95 percent of our U S. currency exposure and 100 percent of our European currency exposure. C. We have a moderate tolerance for investment earnings volatility with a target value at risk of S50 million. D. We will report to the risk committee all credit losses greater than S10 million and all market value losses greater than S20 million. Answer: C Explanation The best example of a risk appetite statement concerning an investment portfolio is one that explicitly states a tolerance level for investment earnings volatility, such as "We have a moderate tolerance for investment earnings volatility with a target value at risk of $50 million." This statement directly addresses the organization’s willingness to accept risk and quantifies it, which is characteristic of effective risk appetite statements. IIA best practices on defining risk appetite, which recommend quantifying risk tolerance in financial terms to guide strategic decision-making. =============== Question #:2 - (Exam Topic 4) - [Independence and Objectivity] During an assurance engagement the internal audit team discovers that employees performing a control do not understand the principles behind it. Before the engagement concludes, at management's request the audit team facilitates several formal training sessions to help explain those principles to the employees. Which of the following best describes the engagement provided by the internal audit activity in this scenario? A. Assurance services B. Blended services C. Consulting services D. Pass with Valid Exam Questions Pool 2 of 12 Certs Exam IIA - IIA-CIA-Part1 D. Prohibited services Answer: B Explanation The scenario describes the internal audit team providing both assurance and consulting services. Initially, the internal audit team was engaged in an assurance activity, verifying the effectiveness of controls through standard audit procedures. However, upon discovering a knowledge gap among employees, the team extended their role to include consulting services by conducting training sessions. This mix of both assurance and consulting in the same engagement characterizes what are commonly referred to as blended services. Institute of Internal Auditors (IIA) - International Standards for the Professional Practice of Internal Auditing Pass with Valid Exam Questions Pool 3 of 12 Certs Exam IIA - IIA-CIA-Part1 Topic 1, Exam Pool A Question #:3 - (Exam Topic 1) - [Governance, Risk Management, and Control] For a new board chair who has not previously served on the organization's board, which of the following steps should first be undertaken to ensure effective leadership to the board? A. Chair should learn the current organizational culture of the company. B. Chair should learn the current risk management system of the company. C. Chair should determine the appropriateness of the current strategic risks. D. Chair should gain an understanding of the needs of key stakeholders. Answer: D Explanation For a new board chair, the first step to ensure effective leadership involves gaining an understanding of the needs of key stakeholders. This foundational knowledge is critical as it shapes the chair's approach to governance, strategic alignment, and stakeholder engagement, providing a direct line of sight into the expectations and concerns that may influence the organization’s direction. Best governance practices and board leadership guidelines Question #:4 - (Exam Topic 1) - [Proficiency and Due Professional Care] Which of the following best demonstrates conformance with the Standards relating to continuing professional development of internal auditors? A. Regulatory approval from an accrediting agency. B. Self-assessments against a competency framework. C. Approval and signoff from the board of directors. D. A review by external auditors on an annual basis Answer: B Explanation Conformance with the Standards relating to continuing professional development of internal auditors is best demonstrated by self-assessments against a competency framework. Such self-assessments allow internal auditors to evaluate their skills and knowledge against defined criteria to identify areas for improvement and Pass with Valid Exam Questions Pool 4 of 12 Certs Exam IIA - IIA-CIA-Part1 ensure ongoing professional development. This approach is directly aligned with the IIA's Standards, which emphasize the importance of continuous improvement and competency in internal audit practices. The Institute of Internal Auditors (IIA) - International Standards for the Professional Practice of Internal Auditing Pass with Valid Exam Questions Pool 5 of 12 Certs Exam IIA - IIA-CIA-Part1 Topic 6, Exam Pool F Question #:5 - (Exam Topic 6) - [Governance, Risk Management, and Control] An internal auditor is assessing the effectiveness of the organization's risk management practices She checks to see whether risk management is an intégrai part of decision making and whether risk management is transparent, responsive to change and addresses uncertainty. According to HA guidance on risk management frameworks, which of the following approaches is the auditor most likely using? A. Maturity model approach B. Process element approach C. Key principles approach D. Key performance indicators approach. Answer: C Explanation The key principles approach to risk management involves evaluating whether the organization's risk management practices align with fundamental principles, such as being an integral part of decision making, being transparent, responsive to change, and addressing uncertainty. This approach focuses on assessing the adherence to core risk management principles rather than specific processes or maturity levels. The maturity model approach (A) assesses the level of sophistication and development of risk management practices. The process element approach (B) evaluates specific components of the risk management process. The key performance indicators approach (D) focuses on using specific metrics to gauge the effectiveness of risk management. The internal auditor’s focus on the integration of risk management into decision making and its responsiveness to change aligns with the key principles approach as outlined in IIA guidance on risk management frameworks. IIA Practice Guide: Assessing the Adequacy of Risk Management Using ISO 31000 IIA Position Paper: The Role of Internal Auditing in Enterprise-Wide Risk Management Question #:6 - (Exam Topic 6) - [Foundations of Internal Auditing] Which of the following principles of The IIA's Code of Ethics implies that internal auditors should refrain from performing assurance services when there is an impairment to audit independence that has not been declared? A. Confidentiality. Pass with Valid Exam Questions Pool 6 of 12 Certs Exam IIA - IIA-CIA-Part1 B. Objectivity. C. Integrity. D. Competency. Answer: B Explanation The principle of objectivity in The IIA's Code of Ethics implies that internal auditors should refrain from performing assurance services when there is an impairment to audit independence that has not been declared. Objectivity requires auditors to be unbiased and free from conflicts of interest, ensuring that their judgments are not compromised. If there is any impairment to independence, it must be declared to maintain the objectivity and credibility of the audit function. The Institute of Internal Auditors (IIA) Code of Ethics. IIA's International Professional Practices Framework (IPPF). "Internal Auditing: Assurance & Advisory Services" by IIA, Chapter on Ethics and Objectivity. Pass with Valid Exam Questions Pool 7 of 12 Certs Exam IIA - IIA-CIA-Part1 Topic 3, Exam Pool C Question #:7 - (Exam Topic 3) - [Foundations of Internal Auditing] Which competency is required of all staff internal auditors prior to the commencement of an IT audit? A. The ability to assess IT governance. B. The ability to provide an explanation on the risk profile of the organization to the board and senior management. C. The ability to ensure that proposals for improvements to internal controls are balanced with organizational objectives and capabilities. D. The ability to assess the potential for fraud risk and identifying common types of fraud associated with the engagement. Answer: D Explanation Prior to the commencement of an IT audit, the ability to assess the potential for fraud risk and identifying common types of fraud associated with the engagement is a required competency for internal auditors. Understanding the specific fraud risks inherent in IT systems and processes is essential for effectively auditing these areas, particularly in detecting and preventing fraud. IIA's Competency Framework for Internal Auditors Question #:8 - (Exam Topic 3) - [Governance, Risk Management, and Control] Outsourcing a business activity is considered which of the following risk management techniques? A. Sharing a risk. B. Avoiding a risk. C. Reducing a risk. D. Mitigating a risk Answer: C Explanation Pass with Valid Exam Questions Pool 8 of 12 Certs Exam IIA - IIA-CIA-Part1 Outsourcing a business activity is considered a risk reduction technique. By outsourcing, an organization transfers certain activities to external service providers who possess specialized skills or resources, thereby reducing the associated risks that the organization may face if it had to manage those activities internally. IIA guidance on risk management techniques Pass with Valid Exam Questions Pool 9 of 12 Certs Exam IIA - IIA-CIA-Part1 Topic 2, Exam Pool B Question #:9 - (Exam Topic 2) - [Governance, Risk Management, and Control] According to IIA guidance, which of the following most appropriately justifies the CEO’s decision that the internal audit activity shall be responsible for risk management and investigation at a multinational organization? A. The recommendation of the parent office external auditors. B. The provisions of the internal audit charter C. The authority of the CEO. D. The level of proficiency of the chief audit executive Answer: B Explanation According to IIA guidance, any additional roles beyond traditional audit functions, such as being responsible for risk management and investigation, must be explicitly defined in the internal audit charter. This document, approved by senior management and the board, delineates the scope and responsibilities of the internal audit function, ensuring clarity and proper governance. Thus, if the internal audit charter stipulates such roles, it justifies the CEO’s decision. IIA Standard 1000 - Purpose, Authority, and Responsibility Question #:10 - (Exam Topic 2) - [Foundations of Internal Auditing] The management team of an agricultural organization has prioritized corporate social responsibility (CSR) initiatives. Which of the following would be considered a CSR activity? A. Offering a one-off donation to an environmental charity for its expansion efforts B. Organizing organization volunteers to provide periodic plantation skill sharing to farmers C. Providing special year-end monetary bonuses to the organization's employees at all levels D. Arranging a free-of-charge picnic for all of the organization's employees and their family members Answer: B Explanation Pass with Valid Exam Questions Pool 10 of 12 Certs Exam IIA - IIA-CIA-Part1 Organizing volunteers from the organization to provide periodic plantation skill sharing to farmers represents a corporate social responsibility (CSR) activity. This initiative not only supports community development but also aligns with sustainable agricultural practices, which is especially relevant for an agricultural organization. This activity focuses on giving back to the community and enhancing sustainability, both key aspects of CSR. Definitions and examples of CSR in industry guidelines Pass with Valid Exam Questions Pool 11 of 12 Certs Exam IIA - IIA-CIA-Part1 Topic 5, Exam Pool E Pass with Valid Exam Questions Pool 12 of 12 About certsout.com certsout.com was founded in 2007. We provide latest & high quality IT / Business Certification Training Exam Questions, Study Guides, Practice Tests. We help you pass any IT / Business Certification Exams with 100% Pass Guaranteed or Full Refund. Especially Cisco, CompTIA, Citrix, EMC, HP, Oracle, VMware, Juniper, Check Point, LPI, Nortel, EXIN and so on. View list of all certification exams: All vendors We prepare state-of-the art practice tests for certification exams. You can reach us at any of the email addresses listed below. Sales: sales@certsout.com Feedback: feedback@certsout.com Support: support@certsout.com Any problems about IT certification or our products, You can write us back and we will get back to you within 24 hours.
