Sure Pass Exam IIA-CIA-Part1 PDF

The CAE acted appropriately, and the independence of the internal audit activity was not impaired by seeking input from senior management and the external auditor prior to submitting the annual audit plan for board approval. This practice aligns with the IIA's guidance, which encourages collaboration and communication to ensure that the audit plan addresses relevant risks and aligns with organizational goals.

The IIA’s International Standards for the Professional Practice of Internal Auditing regarding the development of the internal audit plan.

The correct statement regarding the role of the internal audit activity in the organization's risk management process is that the internal audit activity may coach management on risk response scenarios if appropriate safeguards have been implemented. This coaching role helps management understand and address risks effectively while maintaining the audit function's objectivity and independence.

The IIA's guidance on the role of internal auditing in risk management and the standards regarding objectivity and consulting.

An effective control to mitigate the risk of payments to ghost employees involves cross-verification and authorization by relevant departments. Reviewing the staff salary payment list by the head of payroll and its subsequent endorsement by the head of human resources ensures a double-check mechanism that can detect anomalies such as ghost employees. This control measure helps in verifying the legitimacy of the payroll and the accuracy of the payments made.

Best practices in internal controls for payroll and human resources departments

According to IIA guidance, the practice by the chief audit executive (CAE) that best enhances the organizational independence of the internal audit activity is meeting privately with the board at least annually. This practice ensures that the internal audit activity can operate independently of management and directly report and discuss significant matters with the board, which is critical for maintaining its independence and objectivity.

The Institute of Internal Auditors (IIA) - International Standards for the Professional Practice of Internal Auditing.

CQUESTION NO: 88

Which of the following statements is true regarding electronic funds transfer (EFT)?

A. EFT is a popular mechanism for improving efficiency, but results in less internal control.

B. EFT significantly reduces the risk of fraud by eliminating the need for authorizations.

C. EFT eliminates payment delays due mostly to the introduction of automated cash controls,

D. EFT makes use of numerous automated controls, but is still vulnerable to fraudulent accounting entries.

Answer: D

Electronic funds transfer (EFT) makes use of numerous automated controls, which improve efficiency and reduce the risk of some types of fraud. However, it is still vulnerable to fraudulent accounting entries, such as those arising from overriding existing controls or exploiting security weaknesses. Therefore, while EFT systems incorporate significant controls, they do not completely eliminate the risk of fraud.References: Best practices and guidelines on electronic funds transfer from financial management and information systems security sources.