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IIA IIA-CIA-Part1 Exam Syllabus Topics:

Section	Weight	Objectives
Governance, Risk Management, and Control	30%	– Governance frameworks and processes 1. Roles of board, management, and internal audit 2. Governance models and best practices – Risk management 1. Risk appetite, assessment, and response 2. Internal audit role in risk management 3. Risk management frameworks (e.g., COSO, ISO 31000) – Internal control 1. Types of controls and control activities 2. Evaluating control effectiveness 3. Control frameworks and components
Ethics and Professionalism	20%	– Professional conduct and due care 1. Competence and continuing professional development 2. Due professional care in engagements – IIA Code of Ethics 1. Rules of conduct and application 2. Principles: integrity, objectivity, confidentiality, competency
Fraud Risks	15%	– Fraud concepts and types 1. Fraud triangle and fraud risk factors 2. Asset misappropriation, corruption, financial statement fraud – Fraud risk assessment and prevention 1. Preventive and detective controls 2. Identifying and prioritizing fraud risks – Internal audit responsibilities regarding fraud 1. Detecting fraud indicators 2. Investigation procedures and reporting
Foundations of Internal Auditing	35%	– Quality assurance and improvement program 1. Internal and external assessments 2. Conformance with Standards 3. Requirements and scope of QAIP – Purpose, authority, and responsibility of internal auditing 1. Definition, mission, and core principles 2. Assurance vs. advisory services 3. Internal audit charter requirements – Independence and objectivity 1. Impairments to independence/objectivity 2. Individual objectivity and safeguards 3. Organizational independence and reporting lines

NEW QUESTION 137
Which of the following statements is correct with regard to risk management?

The board’s responsibility for risk management cannot be assigned to a board committee, such as a board risk committee.

The chief audit executive is accountable to the board for designing, implementing and monitoring the risk management process.

The total process of risk management, which includes a related system of internal control, is the responsibility of the board.

The finance director is responsible for the overall implementation of the risk management process.

NEW QUESTION 138
An engagement supervisor noted that an internal auditor’s personal relationship with a process owner resulted in the auditor providing a favorable and partial assessment during an audit within that process owner’s area.
According to MA guidance, which of the following should be used to manage this impairment?

An internal audit charter.

An employee disciplinary policy.

A functional audit committee.

A functional reporting placement.

NEW QUESTION 139
During an audit engagement, an internal auditor finds that management is not complying with previous commitments made to the external auditors. However, the auditor determines management’s actions to be justified due to significant changes in the business. The best course of action for the auditor to take would be to:

Proceed with the audit engagement and assess the changes actually implemented by management.

Inform the external auditors and seek their guidance.

Inform the external auditors and remove the associated work from the internal audit scope.

Compare the recommended changes against the changes made by management and advise management which action to take.

NEW QUESTION 140
The first stage in the development of a crisis management program is to:

Formulate contingency plans.

Conduct a risk analysis.

Create a crisis management team.

Practice the response to a crisis.

NEW QUESTION 141
While performing an internal audit engagement, an auditor reviews a flowchart of the organization’s purchasing function. Which of the following internal control weaknesses would the auditor be able to identify in the chart?

That purchasing policies have not been updated.

That supplier invoices are processed and paid before the goods are received.

That the organization is not taking advantage of quantity discounts available from its suppliers.

That authorization for payment of goods received has not been granted at the appropriate level.

NEW QUESTION 142
Which of the following statements regarding an internal auditor’s responsibility for detecting fraud is not correct?

The auditor should have sufficient knowledge to detect red flags.

The auditor may obtain assistance from outside experts in areas where the auditor is not sufficiently proficient.

The auditor should identify control weaknesses which could allow fraud to occur.

The auditor should detect fraud before recommending a fraud investigation should take place.

NEW QUESTION 143
Which of the following indicates that internal audit independence may be compromised?

The internal auditor maintains a close personal relationship with operational management.

Material observations were intentionally left out of the audit report.

Internal auditors assigned to the audit engagement did not have the knowledge, skills, and competencies needed to perform their responsibilities.

An internal auditor failed to apply professional skepticism while performing audit tests in an area overseen by an experienced, reputable manager

NEW QUESTION 144
An internal auditor is performing analytical reviews as part of an audit of a supermarket’s merchandising department. Because the economy has declined since midyear, the auditor can expect to encounter which of the following?

Higher inventory turnover.

Higher operating margin.

Lower obsolete stock disposal.

Lower sales volume.

NEW QUESTION 145
According to MA guidance, which of the following statements is true regarding an effective governance process?

It stipulates that risk needs to be considered when making strategic decisions.

It encourages strict segregation of the risk management and internal control processes.

It relies on effective risk management when establishing the organization’s risk appetite.

It relies on the board to devise ways to communicate the effectiveness of internal controls.

NEW QUESTION 146
During an audit engagement of a large retail store, internal auditors noted significant discrepancies between available inventory and sales and suspect an abuse of cash register refunds and voids. Which of the following would be the most effective preventative control to reduce these losses?

Ensure that returned merchandise is restocked to shelves or sent to the manufacturer by an independent employee.

Call a sample of customers who returned merchandise to test the legitimacy of the returns and check refund amounts.

Require that a manager use a reserved register code to approve voids or refunds.

Analyze voids and refunds by employee, credit card number, and amount for unusual numbers, amounts, or patterns.

NEW QUESTION 147
According to MA guidance, which of the following statements is true regarding an effective governance process?

It stipulates that risk needs to be considered when making strategic decisions.

It encourages strict segregation of the risk management and internal control processes.

It relies on effective risk management when establishing the organization’s risk appetite.

It relies on the board to devise ways to communicate the effectiveness of internal controls.

NEW QUESTION 148
According to IIA guidance, who is responsible for ensuring that an organization’s internal audit activity conducts an internal assessment?

The board.

External auditors.

Senior management.

The chief audit executive.

NEW QUESTION 149
According to IIA guidance, which of the following is the strongest indicator of deficiencies in the risk management process?

The periodic evaluation of risk ratings is primarily dependent on subjective assessments.

Separate evaluations of the risk management process were conducted, but the results were never integrated.

Management’s primary objective is minimizing changes to the structure and operation of the risk management process.

Many aspects of the related enterprise risk management program are informal and undocumented.

NEW QUESTION 150
A global manufacturing company has three regional offices. The chief audit executive (CAE) is concerned about the cost of an upcoming external quality assessment of the internal audit activity. The last external assessment was performed six years ago. Recently, the internal audit staff at one of the regional offices performed an internal assessment. To ensure conformance with the Standards, what is the most appropriate action for the CAE to take?

Request from the audit committee an additional budget and an extension so that the external assessment could be performed next year.

Review the results of the internal assessment, identify weaknesses, and implement improvements at the remaining offices.

Request the regional office that performed the internal assessment to perform an assessment of the remaining offices.

Request that an external assessor validate the results of the internal assessment and review the remaining offices.

NEW QUESTION 151
A chief audit executive added more money to the IT training budget to ensure the organization’s internal auditors were able to perform data analytics while performing an audit. Which core competency is being addressed?

Data analytics

IT fraud detection.

Continuing professional development

Due professional care.

NEW QUESTION 152
Which of the following is an example of a risk reduction strategy?

Outsourcing the payroll function.

Absorbing the cost of losses.

Insuring fixed assets.

Installing cameras around the plant

NEW QUESTION 153
The best reason for separating the cash-receiving function from the related record-keeping function is to:

Segregate cash payments from cash receipts.

Provide accountability for cash received.

Minimize misappropriations in cash receipts.

Improve physical security over the cash-receiving function.

NEW QUESTION 154
Auditors 1, 2, and 3 work out of various offices. Each must be assigned to one, and only one, of three audit locations (A, B, or C). The cost of sending each auditor to each location is listed below:
Audit Locations
Auditor 1 A B
Auditor 2 $200 $300 $400
Auditor 3 $400 $300 $600
Auditor 4 $200 $200
$500
The minimum cost with which this assignment can be accomplished is:

$800

$900

$1,000

$1,100

NEW QUESTION 155
A chief audit executive (CAE) has just joined an organization with an existing internal audit activity. Based on her review of the current organizational structure, the CAE determines that the internal audit activity lacks adequate independence. Which of the following actions is the CAE’s best step to take next to move the internal audit activity toward organizational independence?

Ensure the limitations are disclosed through communication with the board and senior management, so that the internal audit activity can continue operating under the same organizational structure.

Request that the board restructure the reporting line of the internal audit activity to ensure the CAE has unrestricted access to the board.

Rotate internal audit assignments among members of the internal audit activity to minimize the effects of the current structure.

Train internal auditors about organizational independence and have them sign an acknowledgment of understanding.

NEW QUESTION 156
What is an appropriate first step in an internal auditor’s fraud risk assessment to evaluate how the organization manages such risk?

Develop preventive and detective controls

Identify potential fraud scenarios

Assess the impact and likelihood of fraud risks

Determine fraud risk responses

NEW QUESTION 157
Which of the following is an example of an impairment to an internal auditor’s independence?

An internal auditor delays reporting material financial statement audit findings until after his parents sell all of their stock in the company

Following the restructuring of the organization, the internal audit activity now reports functionally to the chief financial officer

A new member of the internal audit activity, who was the accounts payable supervisor for two years, is asked to consult on the implementation of a new accounts payable system

Believing there must be errors in a given balance sheet account the internal auditor decides to expand his testing

NEW QUESTION 158
Which of the following is an example of a management control technique?

A budget.

A risk assessment.

The board of directors.

The control environment

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