CIA CIA Internal Controls & Audit

Question 1

Which internal control component in the COSO framework establishes the tone at the top and influences the control consciousness of employees?

Accepted Answer

Control Environment

Answer

Risk Assessment

Answer

Control Activities

Answer

Monitoring Activities

Question 2

In an internal audit, what is the primary purpose of a 'walkthrough'?

Accepted Answer

To verify that controls are designed and operating as documented

Answer

To test a large sample of transactions statistically

Answer

To interview external auditors about findings

Answer

To assess the organization's strategic objectives

Question 3

Which type of control is designed to detect errors or fraud AFTER they have occurred?

Accepted Answer

Detective control

Answer

Preventive control

Answer

Corrective control

Answer

Directive control

Question 4

Segregation of duties in internal controls primarily aims to prevent which risk?

Accepted Answer

Collusion and fraud through unauthorized access and concealment

Answer

Excessive employee overtime and workload

Answer

Regulatory non-compliance with tax filings

Answer

Inaccurate financial forecasting

Question 5

An auditor identifies that management consistently overrides established internal controls. According to IIA standards, this should be reported as:

Accepted Answer

A significant deficiency or material weakness requiring escalation to the board

Answer

A minor observation in the next annual report

Answer

An acceptable practice if done infrequently

Answer

A compliance issue handled only by external auditors

Question 6

Which audit sampling method gives every item in the population an equal chance of being selected?

Accepted Answer

Random sampling

Answer

Judgmental sampling

Answer

Stratified sampling

Answer

Cluster sampling