Practice Test GeeksCIA - Certified Internal Accountant Practice Test
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Auditing & Internal Controls Flashcards

7 cards from real CIA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Auditing & Internal Controls flashcards as text

  1. An internal auditor finds that the same employee can create a new vendor in the master file and approve payments to that vendor. Which control weakness does this represent?

    Answer: Lack of segregation of duties

    Combining vendor setup with payment approval lets one person create a fictitious vendor and pay it, which is a segregation of duties failure.

  2. Under the COSO Internal Control–Integrated Framework (2013), which component includes the board's oversight responsibility and management's commitment to integrity and ethical values?

    Answer: Control environment

    The control environment sets the tone at the top and includes integrity, ethical values, and board oversight.

  3. Which type of control is a monthly bank reconciliation performed by someone independent of cash handling?

    Answer: Detective control

    A bank reconciliation identifies errors or irregularities after they occur, which makes it a detective control.

  4. An auditor wants to test whether all shipments were billed. Which direction of testing is most appropriate?

    Answer: Select shipping documents and trace to sales invoices

    Testing completeness means starting from the source event (shipment) and tracing forward to the recorded invoice.

  5. Which statement best describes inherent risk?

    Answer: The susceptibility of an assertion to misstatement before considering related controls

    Inherent risk is the level of risk that exists before any internal controls are considered.

  6. When control risk is assessed as high, how should an auditor generally adjust substantive testing to keep audit risk acceptable?

    Answer: Increase the extent of substantive testing

    Higher control risk requires lower detection risk, which is achieved by performing more or stronger substantive procedures.

  7. A compensating control is best described as:

    Answer: A control that offsets a weakness in another control by reducing the same risk

    Compensating controls reduce the same risk when a primary control is missing or not feasible, such as close supervisory review in a small department.