CERTIFIED INTERNAL CERTIFIED INTERNAL CERTIFIED INTERNAL CERTIFIED INTERNAL

AUDITOR EXAM AUDITOR EXAM AUDITOR EXAM AUDITOR EXAM

OVERVIEW OVERVIEW OVERVIEW OVERVIEW
Glenn E. Sumners
December 2012
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Glenn Sumners, DBA, CIA, CFE is on the faculty of
Louisiana State University where he is the director of the
Louisiana State University Center for Internal Auditing
(LSUCIA). He was named Educator of the Year in 1987 by
the IIA and received the LCPA Lifetime Achievement in
AccountingEducationAward in 1999 In 2006 Professor
{Su foto}
Accounting Education Award in 1999. In 2006, Professor
Sumners received the Bradford Cadmus Memorial Award
from the IIA. He is a member of the IIA Society Emeritus. In
2012, he was inducted into the IIA American Hall of
Distinguished Audit Practitioners. Three LSUCIA students
have placed first in the international manuscript
competition. Eighteen students from the LSUCIA Program
have won international award for the highest score on the
CIA exam. In 2012, The CIA Award for the highest student
score was namedthe Dr. GlennE. Sumners Award. score was named the Dr. Glenn E. Sumners Award.
He provides quality assurance reviews, consulting, and
training to internal audit groups and audit committees. He
has made over 1200 presentations in the last 25 years. He
has been invited to speak in 25 countries.
Glenn E. Sumners
Director
Louisiana State University
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Center for Internal Auditing
It is important to note that the CIA Examis really four exams not one
Exam Overview
It is important to note that the CIA Exam is really four exams not one.
Accordingly, the knowledge required and preparation process will vary.
Please note that my comments are my personal opinions and may or
may not reflect the position of The IIA. may not reflect the position of The IIA.
Part I
The internal audit activitys role in governance, risk, and control.
P t 2 Part 2
Conducting the internal audit engagement.
Part 3
Business analysis and information technology.
Part 4
Business management skills
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Business management skills.
1 2 3 4
Exam Overview
Questions 90 90 90 90
Time Adequate Adequate Adequate Adequate
Hours 2 2 2 2 Hours 2 2 2 2
Impact of
Experience
Beneficial Beneficial Not Relevant Not Relevant
Suggested Suggested
hours of
preparation
30 30 60
30
MBA
Recommended
1 2 4
3 Recommended
order
1 2 4
3
Variability
Calculations None None Typically 5 to 10 None
Type Questions
Literature (IPPF) Literature Knowledge Knowledge
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Type Questions
Literature (IPPF)
Logic
(application)
Literature
Logic
Knowledge
(textbook)
Knowledge
(textbook)
Grade Distribution:
Comments
Grade Distribution:
The grades are typically much more compressed on parts
1 and 2 than a normal distribution.
This is due to the fact that everyone is studying the same
material and the more candidates study, the more similar
the scores. the scores.
This does not hold for part 4 since the educational
backgrounds of the candidates may vary.
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Status
Comments
Status
Computer-Based Testing
Model Exam Model Exam
Resource Materials
Waiver Waiver
Future Changes
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The examis primarily a preparation process
Passing the Exam
The exam is primarily a preparation process.
Three primary reasons that candidates do not pass Three primary reasons that candidates do not pass
the exam:
Knowledge of the exam coverage and content. g g
Insufficient preparation.
Preparation not focused.
Note:
Parts 1 & 2
Figure it out.
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Parts 3 & 4
Walk in knowledge.
Model Exam
Keys to Passing the Exam
Model Exam
Candidates should purchase the Model Exam and read as
the first step in the preparation process.
The Model Exam provides a quick overview of the content
and difficulty level of each part.
International Professional Practices Framework (IPPF)
Knowledge of the IPPF is critical to success on parts 1 and 2. g p
Studying the IPPF, as opposed to reading the IPPF, is the
most efficient and effective way to increase your score.
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Question Recognition
Keys to Passing the Exam
Question Recognition
The more questions that you review from all of the
available sources, the more questions you will recognize
on the exam.
Reviewas many questions as possible and make sure that Review as many questions as possible and make sure that
you understand any questions you miss.
Many successful candidates indicate that their primary
approach was to focus on learning by reviewing questions.
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Test Taking Techniques
Keys to Passing the Exam
Test-Taking Techniques
Parts 1 and 2 to some extent is a reading comprehension
process.
You can not pass the Exam with just good test-taking
techniques but it might improve your score by 3 to 5 techniques but it might improve your score by 3 to 5
questions.
Typically, there are about 5 questions on each exam that
are critical to success. Test-taking techniques can impact
your success on these questions.
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Order Model Exam.
Work CIA Exams.
Study Plan
Read the Model Exam.
Study IPPF:
Definition
C d f E hi
Work Model Exam.
Status Analysis.
Code of Ethics
Standards
Glossary
Practice Advisories
30-Hour Wrap-up.
Study Efficiency:
10
Practice Advisories
Study Handout:
Topic by Topic
Work all multiple choice
10
8
Literature (Study IPPF first).
Read and Remember.
Work all multiple choice
questions.
Work sample exams (LIT).
4
Logic
Question Recognition
Test Taking Techniques
E perience
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Experience
Read and Think
1
Model Exam Part 1
1 Ch t (LIT) 21 Q lit A (LOG) 41 I d d (LIT) 1. Charter (LIT)
2. Audit Plan (LIT)
3. Internal Audit Function (LOG)
4. Audit Committee (LIT)
5. Independence (LIT)
21. Quality Assurance (LOG)
22. Risk Audit Plans (LOG)
23. Engagement Planning Risk (LOG)
24. Risk Map (LOG)
25. Risk Technique (LOG)
41. Independence (LIT)
42. Governance (LIT)
43. Reporting (LOG)
44. Risk Management (LIT)
45. Governance (LOG)
6. Independence (LIT)
7. Independence (LIT)
8. Objectivity (LOG)
9. Ethics (LIT)
10.Ethics (LIT)
26. Strategic Plan (LOG)
27. Risk (LOG)
28. Activity Risk (LIT)
29. Risk (LOG)
30. Risk (LOG)
46. Objectivity (LOG)
47. Goals and Objectives (LIT)
48. Governance (LIT)
49. External Auditors (LIT)
50. Conflict of Interest (LIT) ( )
11.Skills (LIT)
12.Knowledge (LIT)
13.Due Professional Care (LIT)
14.Assurance (LOG)
15 Assurance (LOG)
( )
31. Work of Others (LIT)
32. Coordination (LIT)
33. Coordination (LOG)
34. Planning Risk (LIT)
35 Risk (LOG)
( )
51. Code of Conduct (LOG)
52. Coordination (LIT)
53. Compliance Function (LOG)
54. CRO (LOG)
55 Prevention (LOG) 15.Assurance (LOG)
16. Knowledge (LIT)
17. Ethics (LOG)
18. Staffing (LIT)
19. Quality Assessment (LIT)
35. Risk (LOG)
36. Planning (LOG)
37. Coordination (LIT)
38. Resources (LOG)
39. Annual Audit Plan (LOG)
55. Prevention (LOG)
56. Compensation System (LOG)
57. Corporate Governance (LOG)
58. Finance Risk (KNOW)
59. ERM (LIT)
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20. Staffing (LIT) 40. Risk (LOG) 60. Residual Risk (LIT)
Model Exam Part 1
61 Controls (LOG) 81 Risk (LOG) 61. Controls (LOG)
62. Controls (LOG)
63. Controls (LOG)
64. Risks (LOG)
65. Risks (LOG)
81. Risk (LOG)
82. Competent (LOG)
83. Engagement Objective (LOG)
84. Scope (LOG)
85. Criteria (LOG)
RECAP:
2 Knowledge
34 Literature
64 Logic
66. Organization (LOG)
67. Controls (LOG)
68. Quality Process (KNOW)
69. Participation (LOG)
70. Conflict Resolution (LOG)
86. Controls (LOG)
87. Controls Fraud (LOG)
88. TIPS (LOG)
89. Scope Limitation (LIT)
90. Analyze Effectiveness (LOG)
64 Logic
Important to Know:
Standards
Risk
71. Controls (LOG
72. Controls (LOG)
73. Controls (LOG)
74. Controls (LOG)
75 Controls (LOG)
91. Fraud (LOG)
92. Controls (LOG)
93. Analytics (LOG)
94. Audit Procedures (LOG)
95 Audit Procedures (LOG)
Risk
Controls
75. Controls (LOG)
76. Controls (LIT)
77. Controls (LOG)
78. Preliminary Survey (LIT)
79. Preliminary Survey (LOG)
80 P li i R i (LOG)
95. Audit Procedures (LOG)
96. Risks (LOG)
97. Budgets (LOG)
98. Engagement Objectives (LIT)
99. Audit Program (LOG)
100 C t l (LOG)
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80. Preliminary Review (LOG) 100. Controls (LOG)
Model Exam Part 2
1. Standards (LIT)
Reliability and Compliance
22. Activity Report (LOG)
Operations
41. Due Diligence (LOG)
42 Audit Procedures (LOG) Reliability and Compliance
2. Ethics (LIT)
3. Ethics (LIT)
4. Fraud (LIT)
5. Data Gathering (LIT)
Operations
23. Activity Report (LOG)
Operations
24. Full Reliance (LOG)
Evidence
42. Audit Procedures (LOG)
43. Software (LOG)
44. Database (LOG)
45. Systems Development (LOG)
46. Systems Development (LOG)
6. Fraud Indicators (LIT)
7. Evidence (LOG)
8. Sufficient Evidence (LOG)
9. Persuasive Evidence (LOG)
10. Competent Evidence (LIT)
25. Recommendations (LIT)
26. Reporting (LIT)
27. Exit Conference (LITI)
28. Audit Review (LOG)
29. Audit Report (LIT)
47. Disaster Recovery (LOG)
48. EFT (LOG)
49. Operational Ratio (LOG)
50. EDI (LOG)
51. Benchmarking (KNOW)
11. Competent Evidence (LOG)
12. Account Analysis (LOG)
13. Account Analysis (LOG)
14. Analysis (LOG)
15 Scattergram(KNOW)
30. Auditee Feedback (LIT)
31. Performance Evaluation (LOG)
32. Outsourced Activities (LOG)
33. Management Fraud (LIT)
34 Fraud Prevention (LOG)
52. Audit Procedures (LOG)
53. Process Evaluation (LOG)
54. Engagement Agreement (LOG)
55. Consulting (LOG)
56 Audit Procedure (LOG) 15. Scattergram(KNOW)
16. Working Papers (LIT)
17. Working Papers (LIT)
18. Supervisory Review (LIT)
19. Working Papers (LIT)
20 I t i R t (LOG)
34. Fraud Prevention (LOG)
35. Fraud Interview (LOG)
36. CSA (LIT)
37. Audit Engagement (LOG)
38. Questionnaire (LOG)
39 P f A dit (LIT)
56. Audit Procedure (LOG)
57. Performance Scorecard (LOG)
58. Audit Procedures (LOG)
59. Audit Scope (LOG)
60. Benchmarking (KNOW)
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20. Interim Report (LOG)
21. Activity Report (LOG)
Operations
39. Performance Audit (LIT)
40. Audit Procedure (LOG)
Model Exam Part 2
61. Evidence Procedures (LOG)
62. Follow-up (LOG)
81. Sampling (KNOW)
Statistical vs. Non-statistical
63. Audit Monitoring (LOG)
64. Follow-up (LOG)
65. EHS Audit (LOG)
66. Follow-up (LIT)
67 Followup (LIT)
83. Sampling (KNOW)
Mean per Unit
84. Normal Variation (KNOW)
85. Sampling (KNOW)
StandardError
Recap:
12 Knowledge
22 Literature
66 Logic
67. Follow-up (LIT)
68. Follow-up (LOG)
69. Follow-up (LOG)
70. Audit Committee (LOG)
71. Interrogation (LOG)
Standard Error
86. Sample Selection (LOG)
87. Control Questionnaire (LOG)
88. Sampling (KNOW)
Standard Deviation
Major Areas:
17 Evidence
10 Fraud
10 IT
72. Audit Evidence (LOG)
73. Evidence (LOG)
74. Fraud Interviewing (LOG)
75. Fraud Indicator (LOG)
76 CAAT (LOG)
89. Analytics (LOG)
90. Analytics (LOG)
91. Analytics (LOG)
92. Evidence (LOG)
93 FraudEvidence (LOG)
10 IT
8 Reporting
7 Sampling
6 Follow-up
3 Ethics
76. CAAT (LOG)
77. Fraud (LOG)
78. Fraud (LOG)
79. Fraud (LOG)
80. Discovery Sampling (KNOW)
93. Fraud Evidence (LOG)
94. Decision Making (LOG)
95. Flowchart (LOG)
96. CSA Workshop (LOG)
97. MRP (LOG)
3 Working Papers
3 CSA
31 - Other
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81. Generalized Audit Software (LOG) 98. Generalized Audit Software (LOG)
99. Narrative Flowchart (LOG)
100. Horizontal Flowchart (KNOW)
Overview Part 2
Topics Coverage Type Level Preparation Topics Coverage Type Level Preparation
Working Paper Light Lit Easy IPPF
Reporting Moderate Lit Easy IPPF
Communications Moderate Lit Easy IPPF
Analytics Light Lit Easy IPPF
Evidence Heavy Logic Difficult TTT, Experience, Handout
CSA Light Lit Moderate IPPF
Sampling Heavy Knowledge Moderate Handout
IT Heavy Knowledge Moderate Handout, Manual
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Fraud Heavy Logic Difficult TTT, Experience, Handout
Test-Taking Techniques
1. Singular or Plural g

Wrong answer
Not relevant
Best
Most
Least
Primary
Major

1. Singular Question 2. Plural Question (Ranking process)

a. Right
b. Wrong Not relevant
c. Wrong Not relevant
d. Wrong Not relevant
a. Right
b. Right
c. Right
d. Right
or
More than one right
answer
Ranking Process Ranking Process

2. Literature - Logic - Knowledge

IPPF Application
Experience
Textbooks
Buzz Words (Glossary)
- IT

IT
- MIS
- Operations Management
- Sampling

3. Underline Key Words

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4. Format

Read the question
Testing Approach
Read the question.
Is the question:
Singular
Plural
Is the question Reverse Logic?
Least
Not
Except
Inappropriate
Beyond
Identify the Key Words Identify the Key Words.
Re-read the last sentence.
What is the format of the question?
Eli i t th di t t (E i t fi d )
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Eliminate the distractors. (Easier to find wrong answer.)
Differential Coverage (Parts 1 & 2)
CAE
LIT Low Frequency
Manager
AIC AIC
Staff
LOG High Frequency
Staff
LOG High Frequency
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Differential Coverage (Parts 1 & 2)
CAE
Topic Questions Part Type
AC
Coordination
QAR
2
2
2
1
1
1
Lit
Lit
Lit
Manager
AIC
Risk 15 1 Log
AIC
Staff
Risk
Controls
Evidence
Fraud
Reporting
15
20
17
13
12
1
1
2
2
2
Log
Log
Log
Log
Lit
Staff
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Logic Knowledge
Overview of Exam
1 Overlap 2 3 & 4
Start Execution - End
Lit t T l Literature
IPPF
Tools:
IT
Sampling


Part 1 Part 2 Part 3 Part 4
Typical Exam
Part 1 Part 2 Part 3 Part 4
Literature 30 25 0 0
Logic 60 55 0 0
Read and Remember
Read and Think
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Knowledge 0 10 90 90

Parts 1 and 2
Preparation Approach
Parts 1 and 2
The exam will have many questions that you have
never seen before The key is to use your never seen before. The key is to use your
experience and logic to derive an answer.
Part 3
You should know the material when you walk in
the door of the test site. Unlike parts 1 and 2, you
ill t b bl t d i d i th will not be able to derive many answers during the
testing process. You either understand the
material and knowthe answer or you do not
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material and know the answer or you do not.
1 According to the Standards the normal course of work of an
Sample Questions
1. According to the Standards, the normal course of work of an
internal audit activity is to do all of the following except:
a. Provide an independent appraisal.
b Pro ide an e amination b. Provide an examination.
c. Prevent fraudulent activities.
d. Evaluate an organizations activities as a service to the
organization.
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1. According to the Standards, the normal course of work of an internal audit
ti it i t d ll f th f ll i t
Sample Questions
activity is to do all of the following except:
a. Provide an independent appraisal.
b. Provide an examination.
c Prevent fraudulent activities c. Prevent fraudulent activities.
d. Evaluate an organizations activities as a service to the organization.
Question Answer
Si l Pl l Si l Singular Plural Singular
Lit Log - Know Literature
Straight Reverse Reverse
Key word(s) Prevent
Format F, T, T, T
Answer C
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NOTE: Management is responsible for controls to prevent fraud. Internal auditors
evaluate controls. Internal auditors are not responsible for prevention activities.
Answer C
2 An internal auditor suspects fraud Which of the following
Sample Questions
2. An internal auditor suspects fraud. Which of the following
sample plans should be used if the purpose is to select a
sample with a given probability of containing at least one
example of the irregularity? example of the irregularity?
a. Attributes.
b. Discovery.
c Stop or go c. Stop-or-go.
d. Probability proportional to size.
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2. An internal auditor suspects fraud. Which of the following sample plans
should be used if the purpose is to select a sample with a given probability of
Sample Questions
should be used if the purpose is to select a sample with a given probability of
containing at least one example of the irregularity?
a. Attributes. (Attribute) (Compliance) (Parent)
b. Discovery. (Attribute) (Compliance) (At least one) (Fraud)
c. Stop-or-go. (Attribute) (Compliance) (Low error rate)
d. Probability proportional to size. (Variables) ( Overstatement)
Question Answer
Singular Plural Singular
Lit Log - Know Knowledge
Straight Reverse Straight g g
Key word(s) Fraud
At least one
Format T, F, F, F
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Answer B
3 Which of the substantive fieldwork procedures presented
Sample Questions
3. Which of the substantive fieldwork procedures presented
below provides the best evidence about the completeness of
recorded revenues?
a Reconciling the sales journal to the general ledger control a. Reconciling the sales journal to the general ledger control
account.
b. Vouching charges made to the accounts receivable subsidiary
ledger to supporting shipping records ledger to supporting shipping records.
c. Vouching the shipping records to the customer order file.
d. Reconciling shipping records to recorded sales.
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3. Which of the substantive fieldwork procedures presented below provides the
b t id b t th l t f d d ?
Sample Questions
best evidence about the completeness of recorded revenues?
a. Reconciling the sales journal to the general ledger control account.
b. Vouchingcharges made to the accounts receivable subsidiary ledger to
supporting shipping records. pp g pp g
c. Vouchingthe shipping records to the customer order file.
d. Reconciling shipping records to recorded sales.
Question Answer Notes: Question Answer
S P Plural
L L K Logic
Notes:
Validity
Completeness
Key word(s) Completeness
Answer D
Incorrect Inclusion
Vouch
Incorrect Exclusion
Trace
Trace
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Vouch
SD
4 Confirmations are a highly regarded form of evidence
Sample Questions
4. Confirmations are a highly regarded form of evidence.
Confirmation would be most effective in addressing the
existence assertion for the:
a Addition of a mailing machine to a machine shop a. Addition of a mailing machine to a machine shop.
b. Sale of merchandise during regular course of business.
c. Inventory held on consignment.
d. Granting of a patent for a special process developed by the
organization.
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4. Confirmations are a highly regarded form of evidence. Confirmation would be
t ff ti i dd i th i t ti f th
Sample Questions
most effective in addressing the existence assertion for the:
a. Addition of a mailing machine to a machine shop.
b. Sale of merchandise during regular course of business.
c Inventory held on consignment c. Inventory held on consignment.
d. Granting of a patent for a special process developed by the organization.
Question Answer Question Answer
S P Plural
L L K Logic
Key word(s) Confirmations
Answer C
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NOTE: Confirmations are external.
5 Adequate internal controls are most likely to be present if:
Sample Questions
5. Adequate internal controls are most likely to be present if:
a. Management has planned and organized in a manner, which
provides reasonable assurance, that the organizations
objectives and goals will be achieved efficiently and objectives and goals will be achieved efficiently and
economically.
b. Management has exercised due professional care in the
design of operating and functional systems design of operating and functional systems.
c. Operating and functional systems are designed, installed and
implemented in compliance with law.
d Management has designed installed and implemented d. Management has designed, installed and implemented
efficient operating and functional systems.
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5. Adequate internal controls are most likely to be present if:
a Management has planned and organized in a manner whichprovides
Sample Questions
a. Management has planned and organized in a manner, which provides
reasonable assurance, that the organizations objectives and goals will be
achieved efficiently and economically.
b. Management has exercised due professional care in the design of operating
f and functional systems.
c. Operating and functional systems are designed, installed and implemented in
compliance with law.
d. Management has designed, installed and implemented efficient operating and g g , p p g
functional systems.
Question Answer
S P Plural
NOTE:
Pie vs. Slice
L L K Lit
Key word(s) Planned, Organized
A A
Glossary
G & O G & O
R
C
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Answer A
P & O
C
I
M
6 Which of the following is the most appropriate use of an oral
Sample Questions
6. Which of the following is the most appropriate use of an oral
audit report?
a. To communicate sensitive matters to management that the
auditor does not want to reduce to writing auditor does not want to reduce to writing.
b. To communicate to operating management matters that are
too complex to be reduced to writing.
c To communicate conditions that demand immediate action c. To communicate conditions that demand immediate action
before a written report can be prepared.
d. To communicate matters that are not material in nature.
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6. Which of the following is the most appropriate use of an oral audit report?
Sample Questions
6. Which of the following is the most appropriate use of an oral audit report?
a. To communicate sensitive matters to management that the auditor does not
want to reduce to writing.
b. To communicate to operating management matters that are too complex to be
d d t iti reduced to writing.
c. To communicate conditions that demand immediate action before a written
report can be prepared.
d. To communicate matters that are not material in nature.
Question Answer
S P Plural
NOTE:
Interim Report
L L K Lit
Key word(s) Oral
A C
(Immediate Action)
Oral
Written
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Answer C
Word Association
7. The best descriptions of the principal purpose for retaining
Sample Questions
working papers is to:
a. Help perform the audit in an orderly fashion.
b. Maintain audit program for reuse in the next audit. p g
c. Provide a support for the audit report.
d. Provide a basis for supervisory review.
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7. The best descriptions of the principal purpose for retaining working papers is
Sample Questions
7. The best descriptions of the principal purpose for retaining working papers is
to:
a. Help perform the audit in an orderly fashion.
b. Maintain audit program for reuse in the next audit.
c. Provide a support for the audit report.
d. Provide a basis for supervisory review.
Question Answer
S P Plural
L L K Lit
K d( ) S t Key word(s) Support
Answer C
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8 Which of the following tests provides the least significant
Sample Questions
8. Which of the following tests provides the least significant
evidence when testing for suspected fraudulent sales?
a. Tracing a sample of inventory removal slips from inventory
through billing to the sales journal through billing to the sales journal.
b. Performing an analytical test of sales by comparing sales and
gross margins over time.
c Performing an analysis of write offs and sales returns and c. Performing an analysis of write-offs and sales returns and
comparing the amounts over the past several years.
d. Confirming sales transactions with customers and investigating
nonresponse nonresponse.
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8. Which of the following tests provides the least significant evidence when
testing for suspected fraudulent sales?
Sample Questions
testing for suspected fraudulent sales?
a. Tracing a sample of inventory removal slips from inventory through billing to
the sales journal.
b. Performing an analytical test of sales by comparing sales and gross margins
over time.
c. Performing an analysis of write-offs and sales returns and comparing the
amounts over the past several years.
d. Confirming sales transactions with customers and investigating nonresponse. g g g p
Question Answer
S P Plural
L L K L i
NOTE:
Directional Question
L L K Logic
Key word(s) Fraudulent Sales
Answer A
Slips Sales
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9 Management has requested an audit of promotional
Sample Questions
9. Management has requested an audit of promotional
expenses. The sales department has been giving away
expensive items in conjunction with new product sales to
stimulate demand. The promotion seems successful, but
t b li th t b t hi h Whi h f th management believes the cost may be too high. Which of the
following audit procedures would be the least useful to
determine the effectiveness of the promotion?
a A comparison of product sales during the promotion period a. A comparison of product sales during the promotion period
with sales during a similar non-promotion period.
b. A comparison of the unit cost of the products sold before and
during the promotion period. g p p
c. An analysis of marginal revenue and marginal cost for the
promotion period before the promotion.
d. A review of the sales departments reasons for believing that
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the promotion has been successful.
9. Management has requested an audit of promotional expenses. The sales department has
been giving away expensive items in conjunction with new product sales to stimulate
Sample Questions
g g y p j p
demand. The promotion seems successful, but management believes the cost may be too
high. Which of the following audit procedures would be the least useful to determine the
effectiveness of the promotion?
a. A comparison of product sales during the promotion period with sales during a similar non-
promotion period.
b. A comparison of the unit cost of the products sold before and during the promotion period.
c. An analysis of marginal revenue and marginal cost for the promotion period before the
promotion.
d. A review of the sales departments reasons for believing that the promotion has been
successful.
Question Answer
S P Plural
NOTE:
WIP FG IS
S P Plural
L L K Logic
Straight - Reverse Reverse
WIP FG IS
Product
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Key words Promotion Expense
Answer
oduc
G&A
10 Discovery sampling is generally inappropriate if the objective
Sample Questions
10. Discovery sampling is generally inappropriate if the objective
is to:
a. Evaluate a qualitative characteristic associated with each
sampling unit sampling unit.
b. Observe at least one sample occurrence.
c. Perform a substantive test.
d. Control the risk of an erroneous decision.
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10. Discovery sampling is generally inappropriate if the objective is to:
Sample Questions
10. Discovery sampling is generally inappropriate if the objective is to:
a. Evaluate a qualitative characteristic associated with each sampling unit.
b. Observe at least one sample occurrence.
c. Perform a substantive test.
d. Control the risk of an erroneous decision.
Question Answer
S P Singular g
L L K Knowledge
Straight - Reverse Reverse
Ke ords Disco er Key words Discovery
Format F, T, T, T
Answer C
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NOTE: Reverse word association.
11 In order to identify the amount of obsolete inventory which
Sample Questions
11. In order to identify the amount of obsolete inventory which
may exist in an organization, the internal auditor probably
would collect evidence using all of the following procedures
except? except?
a. Confirmation.
b. Scanning.
c Recomputation c. Recomputation.
d. Analytical review.
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11. In order to identify the amount of obsolete inventory which may exist in an
organization the internal auditor probably would collect evidence using all of
Sample Questions
organization, the internal auditor probably would collect evidence using all of
the following procedures except?
a. Confirmation.
b. Scanning.
c. Recomputation.
d. Analytical review.
Question Answer
S P Singular
L L K Logic
St i ht R R Straight - Reverse Reverse
Key words Obsolete Inventory
Format F, T, T, T
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Answer A
12 An internal auditor would be concerned about he possibility
Sample Questions
12. An internal auditor would be concerned about he possibility
of fraud if:
a. Cash receipts, net of the amounts used to pay petty cash-type
expenditures are deposited in the bank expenditures, are deposited in the bank.
b. The monthly bank statement reconciliation is performed by the
same employee who maintains the perpetual inventory
records records.
c. The accounts receivables subsidiary ledger and accounts
payable subsidiary ledger are maintained by the same person.
d One person acting alone has sole access to the pettycash d. One person, acting alone, has sole access to the petty cash
fund (except for a provision for occasional surprise counts by a
supervisor or auditor).
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12. An internal auditor would be concerned about he possibility of fraud if:
a Cashreceipts net of the amounts used to pay petty cash type expenditures
Sample Questions
a. Cash receipts, net of the amounts used to pay petty cash-type expenditures,
are deposited in the bank.
b. The monthly bank statement reconciliation is performed by the same
employee who maintains the perpetual inventory records.
c. The accounts receivables subsidiary ledger and accounts payable subsidiary
ledger are maintained by the same person.
d. One person, acting alone, has sole access to the petty cash fund (except for a
provision for occasional surprise counts by a supervisor or auditor). p p y p )
Question Answer
S P Singular
L L K Logic
Key words Fraud
Format T, F, F, F
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Answer A
13 An operational audit report that deals with the scrap disposal
Sample Questions
13. An operational audit report that deals with the scrap disposal
function in a manufacturing company should address:
a. The efficiency and effectiveness of the scrap disposal function
and include any findings requiring action and include any findings requiring action.
b. Whether the scrap material inventory is reported as a current
asset.
c Whether the physical inventory count of the scrap material c. Whether the physical inventory count of the scrap material
agrees with the recorded amount.
d. Whether the scrap material inventory is valued at the lower of
cost or market cost or market.
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13. An operational audit report that deals with the scrap disposal function in a
Sample Questions
13. An operational audit report that deals with the scrap disposal function in a
manufacturing company should address:
a. The efficiency and effectiveness of the scrap disposal function and include any
findings requiring action.
b Wh th th t i l i t i t d t t b. Whether the scrap material inventory is reported as a current asset.
c. Whether the physical inventory count of the scrap material agrees with the
recorded amount.
d. Whether the scrap material inventory is valued at the lower of cost or market. p y
Question Answer
S P Singular
L L K Logic
Key words Operational
Answer A
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NOTE: Word association.
1 Howdo I knowwhen I amready to take the exam?
Questions
1. How do I know when I am ready to take the exam?
2. I did not pass the first time, how should I prepare for the second attempt?
3. Are the exams similar from one attempt to the next?
4 Will my CPA and CISA help me on the CIA? 4. Will my CPA and CISA help me on the CIA?
5. How do your students pass the exam?
6. Do auditors in certain industries have an advantage?
7 Do you recommend taking Parts 1 and 2 the same day? 7. Do you recommend taking Parts 1 and 2 the same day?
8. Do most organizations pay for resource materials and the cost of the
exam?
9. Do candidates ever start with Part 3 and Part 4? 9. Do candidates ever start with Part 3 and Part 4?
10. I am a CPA and have been thinking about the CIA --- why would I need
another certification?
11. If I learn all of the material in this resource packets will I pass?
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p p