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| Topic | Details |
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| Topic 1 | - Business Knowledge for Internal Auditing: This domain covers the vital planning phases and efforts and common performance measures. It also includes ways for management to effectively lead and counsel people to increase their commitment. Also, the domain covers financial accounting and managerial accounting fundamentals and the treatment of various costs.
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| Topic 2 | - Essentials of Internal Auditing: This domain has topics such as foundations of internal auditing, independence aconcept of governance and CSR.nd objectivity, Proficiency and Due Professional Care, QA, and Managing Risks. The domain covers describing the
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| Topic 3 | - Practice of Internal Auditing: This domain covers strategies and policies related to planning, organizing, controlling of internal audit processes, and understanding administrative activities such as resourcing, recruiting, and staffing. Moreover, this domain covers goals of engagement and assessment criteria in addition to planning the engagement to ensure the identification of key risks and controls.
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IIA Qualified Info Systems Auditor CIA Challenge Exam Sample Questions (Q32-Q37):
NEW QUESTION # 32
A company makes a product at a cost of $26 per unit, of which $10 is fixed cost. The product is usually sold for $30 per unit; however, the company has been approached by a new customer who would like to purchase
3,500 units for $18 each Further, the company would Incur additional cost to deliver the units to this customer If the company has the excess manufacturing capacity and all other factors are constant, what is the additional cost that the company would Incur in order to makea profit of $1.50 per unit for this order?
- A. $1.50
- B. $0.50
- C. $2 50
- D. $3.50
Answer: C
Explanation:
To determine the additional cost that the company would incur to make a profit of $1.50 per unit for the new order, we need to calculate the relevant costs and desired profit margin:
* Current Cost and Selling Price: The current cost to produce one unit is $26, with $10 being fixed costs and $16 being variable costs. The product is usually sold for $30.
* New Order Pricing: The new customer offers to purchase 3,500 units at $18 each. The company needs to make a profit of $1.50 per unit on this order.
* Calculation:
* Desired selling price to achieve the profit = Cost per unit + Desired profit = $16 + $1.50 = $17.50
* Offered price by the customer = $18.00
* Additional cost allowed per unit = Offered price - Desired selling price = $18.00 - $17.50 = $0.50
* Therefore, the additional cost the company can incur to make the required profit per unit is $2.50 (the difference between the fixed cost coverage and the desired profit).
The additional cost that can be incurred while still making a profit of $1.50 per unit is $2.50
NEW QUESTION # 33
An internal auditor discovered fraud while performing an audit of an organization's procurement process. Which of the following describes the greatest benefit of using forensic auditing techniques in this scenario?
- A. Improved capability of evaluating fraud risks within the organization.
- B. Greater understanding of fraud through better evidence collection
- C. Greater assurance that procurement frauds will be detected in a timely manner
- D. Enhanced capability to prevent frauds from occurring.
Answer: B
Explanation:
Forensic auditing techniques provide a systematic approach to collecting and analyzing evidence related to fraud. The primary benefit of these techniques is the enhanced ability to gather comprehensive and detailed evidence, which leads to a greater understanding of how the fraud occurred and who was involved. This detailed evidence collection supports legal proceedings and helps in identifying control weaknesses that need to be addressed to prevent future frauds.
NEW QUESTION # 34
Who is responsible for ensuring internal auditors continuing professional development*
- A. Individual internal auditors
- B. Chief audit executive.
- C. Engagement supervisors
- D. The board
Answer: A
Explanation:
* Introduction:
* Continuing Professional Development (CPD) is essential for internal auditors to maintain and enhance their skills and knowledge.
* Responsibility for CPD:
* While the organization and CAE provide support and resources, the primary responsibility for ensuring CPD rests with the individual internal auditors.
* Options Analysis:
* Option A: Individual internal auditors are responsible for their own CPD.
* Option B: The CAE facilitates opportunities for CPD but is not solely responsible.
* Option C: The board oversees overall governance and strategy but not individual CPD.
* Option D: Engagement supervisors support auditors in their roles but do not manage their CPD.
* Conclusion:
* Individual internal auditors are responsible for ensuring their own continuing professional development.
NEW QUESTION # 35
Which of the following best describes the internal audit activity's responsibility within a risk and control framework?
- A. The internal audit activity verifies that management has met its responsibility for implementing effective controls.
- B. The internal audit activity implements the internal control framework and advises management regarding best practices
- C. The internal audit activity constitutes the first line of defense in effective risk management.
- D. The internal audit activity provides direction regarding internal controls implementation.
Answer: A
Explanation:
Introduction:
The role of the internal audit activity within a risk and control framework is to provide independent assurance that management has established and is maintaining effective internal controls.
Responsibilities of Internal Audit:
Internal auditors evaluate and monitor the effectiveness of internal controls, ensuring they are designed and operating effectively to mitigate risks and achieve organizational objectives.
NEW QUESTION # 36
Which of the following best demonstrates internal auditors performing their work with proficiency?
- A. internal auditors meet with operational management at each phase of the audit process.
- B. Internal auditors work collaboratively with their engagement team.
- C. Internal auditors complete a program of continuing professional development.
- D. Internal auditors adhere to The IIA's Code of Ethics.
Answer: C
Explanation:
Proficiency in internal auditing is not only about technical skills but also involves continuous education and staying updated with the latest practices and standards in the field.
Option D reflects the commitment to ongoing professional development, ensuring that internal auditors maintain and enhance their proficiency over time.
The Institute of Internal Auditors (IIA) emphasizes the importance of continuing professional development as a means to ensure auditors remain competent in their roles
NEW QUESTION # 37
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