CIA Part I, unit 2 quiz

Student Name:

1. Due professional care implies reasonable care and competence, not infallibility or extraordinary
performance. Thus, which of the following is unnecessary?

A. The conduct of examinations and verifications to a reasonable extent.

B. The conduct of extensive examinations.

C. The reasonable assurance that compliance does exist.

D. The consideration of the possibility of material irregularities.

2. An internal auditor judged an item to be immaterial when planning an assurance engagement.

However, the assurance engagement may still include the item if it is subsequently determined that

A. Sufficient staff is available.

B. Adverse effects related to the item are likely to occur.

C. Related information is reliable.

D. Miscellaneous income is affected.

3. The internal audit activity can perform an important role in preventing and detecting significant fraud
by being assigned all but which one of the following tasks?

A. Review large, abnormal, or unexplained expenditures.

B. Review sensitive expenses, such as legal fees, consultant fees, and foreign sales commissions.

C. Review every control feature pertaining to petty cash receipts.

D. Review contributions by the organization that appear to be unusual.

CIA Part I, unit 2 quiz

4. A certified internal auditor performed an assurance engagement to review a department store’s cash
function. Which of the following actions will be deemed lacking in due professional care?

A. Organizational records were reviewed to determine whether all employees who handle cash receipts
and disbursements were bonded.

B.A flowchart of the entire cash function was developed, but only a sample of transactions was tested.

C. The final engagement communication included a well-supported recommendation for the reduction
in staff, although it was known that such a reduction would adversely affect morale.

D. Because of a highly developed system of internal control over the cash function, the final engagement
communication assured senior management that no irregularities existed.

5. Due professional care calls for

A. Detailed reviews of all transactions related to a particular function.

B. Infallibility and extraordinary performance when the system of internal control is known to be weak.

C. Consideration of the possibility of material irregularities during every engagement.

D. Testing in sufficient detail to give absolute assurance that noncompliance does not exist.

6. While auditing accounts receivable using analytical procedures, the internal auditors discovered the
actual accounts receivable numbers were not within the limits of their projected results. Which of the
following describes the best response in exercising due professional care under this situation?

A. Revise the limits of the projected results according to the needs and expectations of the client.

B. Confirm that all results of the analytical procedures are documented in the audit workpapers.

C. Notify the CAE that the analytical procedures have uncovered fraud in the organization.

D. Investigate unexpected results from the analytical procedures and make sure that they are
adequately explained.

7. Assessment of a quality assurance and improvement program should include evaluation of all of the
following except

A. Adequacy of the oversight of the work of external auditors.

B. Conformance with the Standards and Code of Ethics.

C. Adequacy of the internal audit activity’s charter.

D. Contribution to the organization’s governance processes.

CIA Part I, unit 2 quiz
8. Which of the following is responsible for developing and maintaining a quality assurance and
improvement program that covers all aspects of the internal audit activity and continuously monitors its
effectiveness?

A. Senior management.

B. Chief audit executive.

C. The board of directors.

D. Audit committee.

9. According to The IIA’s International Professional Practices Framework, when may a self-assessment be
performed in lieu of a full external assessment?

A. When the self-assessment has been validated by a qualified, independent, competent, and
professional external assessor.

B. When the internal audit activity has conducted an external assessment within the past two years.

C. When ongoing monitoring of the internal audit activity has not identified any weaknesses or areas in
need of improvement.

D. A self-assessment may not be performed in lieu of a full external assessment of the internal audit
activity’s conformance with the Standards.

10. As a part of a quality program, internal assessment teams most likely will examine which of the
following to evaluate the quality of engagement planning and documentation for individual
engagements?

A. Measures of project budgets and audit plan completion.

B. Project assignment documentation.

C. Weekly status reports.

D. The long-range engagement work schedule.

11. Quality program assessments may be performed internally or externally. A distinguishing feature of
an external assessment is its objective to

A. Identify tasks that can be performed better.

B. Determine whether internal audit services meet professional standards.

C. Set forth the recommendations for improvement.

D. Provide independent assurance.

CIA Part I, unit 2 quiz

12. The interpretation related to quality assurance given by the Standards is that

A. External assessments can provide senior management and the board with independent assurance
about the quality of the internal audit activity.

B. Appropriate follow-up to an external assessment is the responsibility of the chief audit executive’s
immediate supervisor.

C. The internal audit activity is primarily measured against The IIA’s Code of Ethics.

D. Supervision is limited to the planning, examination, evaluation, communication, and follow-up

process.

13. Which of the following is not true of quality assessments that are implemented according to IIA
guidance?

A. The results of a quality assessment can be shared with senior management and the board.

B. A quality assessment team would be expected to review the internal audit activity’s efficiency and
effectiveness.

C. Company managers or members of the board may be members of the external quality assessment
team if they are qualified, since they are independent of the internal audit activity.

D. The quality assessment process may include feedback from engagement clients through interviews
and questionnaires or surveys.

14. Which of the following is only part of an internal audit activity’s quality assurance program rather
than being included as part of other responsibilities of the chief audit executive (CAE)?

A. The CAE provides information about and access to internal audit working papers to the external
auditors to enable them to understand and determine the degree to which they may rely on the internal
auditors’ work.

B. Management approves a formal charter establishing the purpose, authority, and responsibility of the
internal audit activity.

C. Each individual internal auditor’s performance is appraised at least annually.

D. Supervision of an internal auditor’s work is performed throughout each audit engagement.

CIA Part I, unit 2 quiz

15. Internal auditors may include in their audit report that their activities conform with The IIA
Standards. They may use this statement only if

A. It is supported by the results of the quality program.

B. An independent external assessment of the internal audit activity is conducted annually.

C. Senior management or the board is accountable for implementing a quality program.

D. External assessments of the internal audit activity are made by external auditors.