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CIA Part 1 – Section A – 03 – Standards – Purpose, Authority & Responsibility – Quiz 02

1. Question ID: CIA.P1.A.SPAR.02.09

A service organization is currently experiencing a significant downsizing and process reengineering. Its board of directors has redefined the business goals and established initiatives using in-house developed technology to meet these goals. As a result, a more decentralized approach has been adopted to run the business functions by empowering the business branch managers to make decisions and perform functions traditionally done at a higher level. The internal auditing staff is made up of the chief audit executive (CAE), two managers, and five staff auditors, all with financial background. In the past, the primary focus of successful internal audit activities (IAA) has been the service branches and the six regional division headquarters, which support the branches. These division headquarters are the primary targets for possible elimination. The support functions such as human resources, accounting, and purchasing will be brought into the national headquarters, and technology will be enhanced to enable and augment these operations.

Up to this point, the IAA has reported to the chief operating officer. Due to the significant changes, there has been some discussion as to changing this reporting relationship. What would be the best reporting relationship?
A.  
B.  
C.  
D.  

Question 1 of 10

2. Question ID: CIA.P1.A.SPAR.02.05

The audit committee of an organization has charged the chief audit executive (CAE) with upgrading the internal audit activity. The CAE’s first task is to develop a charter. What item should be included in the statement of objectives?
A.  
B.  
C.  
D.  

Question 2 of 10

3. Question ID: CIA.P1.A.SPAR.02.02

The function of internal auditing, as related to communicating results, is to
A.  
B.  
C.  
D.  

Question 3 of 10

4. Question ID: CIA.P1.A.SPAR.02.07

In some organizations, internal auditing functions are outsourced. Management in a large organization should recognize that the external auditor might have an advantage, compared with the internal auditor, because of the external auditor’s
A.  
B.  
C.  
D.  

Question 4 of 10

5. Question ID: CIA.P1.A.SPAR.02.03

An element of authority that should be included in the charter of the internal audit activity (IAA) is
A.  
B.  
C.  
D.  

Question 5 of 10

6. Question ID: CIA.P1.A.SPAR.02.10

A service organization is currently experiencing a significant downsizing and process reengineering. Its board of directors has redefined the business goals and established initiatives using in-house developed technology to meet these goals. As a result, a more decentralized approach has been adopted to run the business functions by empowering the business branch managers to make decisions and perform functions traditionally done at a higher level. The internal auditing staff is made up of the chief audit executive (CAE), two managers, and five staff auditors, all with financial background. In the past, the primary focus of successful internal audit activities (IAA) has been the service branches and the six regional division headquarters, which support the branches. These division headquarters are the primary targets for possible elimination. The support functions such as human resources, accounting, and purchasing will be brought into the national headquarters, and technology will be enhanced to enable and augment these operations.

Branch managers view the IAA as a watchdog for senior management. What is the best way for internal auditing to change this view to one that is more cooperative?
A.  
B.  
C.  
D.  

Question 6 of 10

7. Question ID: CIA.P1.A.SPAR.02.08

In some cultures and organizations, managers insist that an internal audit activity (IAA) is not needed to provide a critical assessment of the organization’s operations. This kind of management attitude will most probably have an adverse effect on the internal audit activity’s
A.  
B.  
C.  
D.  

Question 7 of 10

8. Question ID: CIA.P1.A.SPAR.02.06

A written charter approved by the board that formally defines the internal audit activity’s purpose, authority, and responsibility enhances its
A.  
B.  
C.  
D.  

Question 8 of 10

9. Question ID: CIA.P1.A.SPAR.02.01

The reporting structure that is most likely to allow the internal audit activity (IAA) to accomplish its responsibilities is to report administratively to the
A.  
B.  
C.  
D.  

Question 9 of 10

10. Question ID: CIA.P1.A.SPAR.02.04

To avoid being the apparent cause of conflict between an organization’s senior management and the audit committee, the chief audit executive (CAE) should
A.  
B.  
C.  
D.  

Question 10 of 10


 

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