IIA-CRMA-ADV Certification in Risk Management Assurance Dumps

Jonnie Karnath2023-10-26T06:44:52+00:00

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1. According to IIA guidance, which of the following individuals would best be considered independent for the purpose of participating in an external assessment of the quality assurance and improvement program for an internal audit activity (IAA)?

A former employee knowledgeable of the IAA who resigned three years earlier from the organization.

A competent employee of an independent external organization that provides co-sourcing services to the IA

An employee in an affiliated organization who has never worked directly with the IA

An employee in the parent organization who has not had any previous contact with the IA

2. The security department uncovered what appears to be a complex fraud in the accounting department. The CEO has requested the internal audit activity to investigate the fraud.

If the internal audit staff lacks the expertise to conduct the investigation, how should the chief audit executive proceed?

Disclose the deficiency, and request that the investigation be reassigned to the first line of defense.

Proceed with the investigation, as internal auditors are not required to have fraud expertise.

Outsource the sensitive investigation to a third-party consultant with fraud expertise.

Select a member of the accounting department who is not involved in the fraud to join the investigation team in a consulting capacity.

3. Which of the following is not an appropriate activity for internal auditors to perform?

Recommend management seek a consulting firm to advise on outsourcing.

Highlight matters that require management's attention.

Implement solutions for specific organizational problems.

Accumulate data, obtain varying views, and report information to senior management.

4. An internal audit activity is using the auditing-by-element approach to audit the organization's controls around corporate social responsibility.

Which of the following would be an element for the internal audit activity to consider?

Working conditions.

Employees' families.

Marketplace competition.

Shareholders and investors.

5. Which of the following is an example of a risk management avoidance response?

Exiting a marketplace.

Recalling a product.

Obtaining product insurance.

Outsourcing production.

6. According to The IIA's Code of Ethics, which of the following is true?

Confidentiality requires that auditors disclose all material facts known to them.

Integrity requires that auditors perform internal audit services in accordance with the Standards.

Objectivity requires that auditors perform their work with honesty, diligence, and responsibility.

Confidentiality requires that auditors be prudent in the use and protection of client information.

7. According to IIA guidance, which of the following statements is true when an internal auditor performs consulting services that improve an organization's operations?

The services must be aligned with those defined in the internal audit charter.

The services must not be performed by the same internal auditor who performed assurance services, in order to maintain objectivity.

The services may preclude assurance services from the consulting engagement.

The services impose no responsibility to communicate information other than to the engagement client.

8. According to IIA guidance, which of the following best describes processes and tools typically used in ongoing internal assessments?

Benchmarking of the internal audit activity's practices and performance.

Report of internal assessment results, response plans, and outcomes.

Analysis of performance metrics such as cycle times.

Self-assessments and surveys of stakeholder groups.

9. The audit committee is concerned that the small size of the internal audit activity (IAA) makes it impractical to achieve full conformance with the Standards.

To address this concern, which of the following actions is most appropriate for the CAE to take?

The CAE should agree with the audit committee and implement only those standards appropriate to the size of the IA

The CAE should request the audit committee to review the Standards to identify specifically which are creating the greatest concern.

The CAE should seek sufficient funding to increase audit resources to meet the minimum requirements of the Standards.

The CAE should explain that conformance with the Standards is essential and not dependent upon the size of the IA

10. A furniture manufacturer has installed a new fire sprinkler system at its central warehouse and canceled the existing fire insurance policy on that property.

What change of risk response strategy does this course of action most likely reflect?

From sharing to reduction.

From acceptance to reduction.

From sharing to avoidance.

From acceptance to avoidance.

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11. Which of the following are generally recognized as essential elements of a corporate social responsibility program?

Human rights and the environment.

Organizational governance and financial reporting.

Fair operating practices and government regulation.

Consumer issues and return on investment.

12. Perform assurance procedures with sufficient care to ensure that all risks are identified.

1 and 2 only

1 and 3 only

2 and 3 only

1, 2, and 3

13. According to the COSO enterprise risk management (ERM) framework, which of the following is not part of the new paradigm in ERM?

Assessing the risk factors.

Aligning risk appetite and strategy.

Enhancing risk response decisions.

Reducing operational surprises and losses.

14. An auditor in charge was reviewing the workpapers submitted by a newly hired internal auditor. She noted that the new auditor's analytical work did not include any rating or quantification of the risk assessment results, and she returned the workpapers for correction.

Which section of the workpapers will the new auditor need to modify?

Condition section.

Criteria section.

Effect section.

Cause section.

15. Which of the following is an example of a management control technique?

A budget.

A risk assessment.

The board of directors.

The control environment.

16. An internal auditor finds during an engagement that payment for the organization's general insurance policy is two months overdue. The issue is informally mentioned tothe finance department which immediately submits the invoice for payment. The auditor decides to exclude this finding from the final audit report as the oversight was immediately corrected and there were no consequences because of this late payment.

Which of the following rules of conduct as described in the IIA Code of Ethics, did the auditor fail to uphold?

Confidentiality.

Objectivity.

Integrity.

Competency.

17. A chief audit executive (CAE) is reviewing the internal audit activity's performance and is concerned that the average number of revisions to findings is steadily rising, making it increasingly difficult to trace the finding to the supporting evidence and workpapers.

According to MA guidance, which of the following elements of the internal audit activity's quality assurance and improvement program would provide the CAE with the most helpful insight into the cause of this problem?

The overall effectiveness of the internal audit activity's periodic self assessments.

The type of audit productivity and performance statistics reported.

The adequacy of the day-to-day supervision and review process.

The scope and frequency of external assessments.

18. The internal audit supervisor is reviewing the workpapers prepared by the staff.

According to the Standards, which of the following statements regarding workpaper supervision is not true?

Review notes of questions that arise during the review process must be retained.

Dating and initialing each workpaper provides evidence of review.

Workpaper review allows for staff training and development.

Workpapers may be amended during the review process.

19. According to IIA guidance, which of the following external groups is most likely to represent a liability risk, based on activities associated with the organization's corporate social responsibility program?

Consumers.

Activists.

Suppliers.

Investors.

20. According to IIA guidance, which of the following objectives of an assurance engagement for the organization's risk management process is valid?

All risks have been identified and mitigated.

Risks have been accurately analyzed and evaluated.

All controls are both adequate and efficient.

The board is appropriately addressing intolerable risks.

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21. An internal auditor notes that employees are able to download files from the internet. According to IIA guidance, which of the following strategies would best protect the organization from the risk of copyright infringement and licensing violations resulting from this practice?

Apply antivirus and patch management software.

Utilize dedicated and encrypted network connections.

Install a software inventory management application.

Utilize secure socket layer encryption.

22. What is the purpose of a secondary control?

It replaces primary controls that are either ineffective or cannot fully mitigate a risk.

It partially reduces the residual risk level when a key control does not operate effectively.

It combines with other controls to help reduce significant risk exposures to an acceptable level.

It helps to ensure the completeness and accuracy of automated controls in a system environment.

23. Which of the following is most likely to function as a directive control?

Security dogs.

Alert employees.

Insurance claims.

Cycle counts.

24. What is the additional advantage of facilitated workshops, in comparison with structured interviews, used when testing the effectiveness of entity-level controls?

During facilitated workshops, people more openly say things to internal auditors than during private interviews.

Internal auditors do not need other sources of information, as the data gathered during facilitated workshops is sufficient.

Facilitated workshops create a synergy of discussion that can bring multiple perspectives to the same issue.

The testimonial evidence obtained during facilitated workshops is generally considered more reliable.

25. Which of the following is not a role of the internal audit activity in facilitating risk identification and evaluation?

Evaluating risk management processes.

Recommending accountability for risk management.

Providing assurance that risks are evaluated correctly.

Supporting managers to identify ways to mitigate risks.

26. According to IIA guidance, which of the following best describes internal auditors' responsibility regarding fraud?

Internal auditors should take a leading role in investigating all fraud-related cases.

Internal auditors must have sufficient knowledge to evaluate the risk of fraud.

Internal auditors should report all fraud cases to law enforcement agents, in accordance with the Code of Ethics.

Internal auditors are responsible for ensuring that fraud does not occur.

27. Which of the following is the most common method of fraud detection?

Analytical reviews of high-risk areas.

Detective controls built into the daily processes.

Unannounced audits or reviews of programs or departments.

Tips received from employees or citizens.

28. An internal auditor for a large retail chain suspects that a store manager has been stealing money from cash sales by listing the sales as accounts receivable and then writing off the accounts as bad debts.

Which of the following irregularities is the most likely cause of the auditor's suspicion?

A much higher bad debt expense as a percentage of sales than that of previous years.

A much higher bad debt expense as a percentage of sales than that of other stores.

A much higher percentage of past-due accounts receivable than that of other stores.

A much higher percentage of past-due accounts receivable than that of previous years.

29. Which of the following statements is true regarding the use of non-statistical sampling in auditing control tests?

It considers tolerable deviation rate more effectively than does statistical sampling.

Sampling risk will be accurately quantified through non-statistical sampling.

Non-statistical sample results must be projected to the population.

Lesser evidence is required to support a conclusion than for statistical sampling.

30. Which of the following scenarios best illustrates the principle of due professional care?

An internal auditor evaluates the significant risks arising from a consulting engagement.

An internal auditor declares that he would have a conflict of interest in providing planned audit support.

An internal auditor has been given sufficient authority to access documents needed to make an appraisal of an issue.

An internal auditor uses technology-based audit techniques to ensure that all significant risks are identified.

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31. Why is a code of ethics for the internal audit profession necessary?

It ensures that all members of the profession possess the same level of competence.

It provides auditors with protection from lawsuits.

It guides internal auditors in their service to others.

It requires auditors to exhibit loyalty to their organizations.

32. Why are preventative controls generally preferred to detective controls?

Because preventive controls promote doing the right thing in the first place, and lessen the need for corrective action.

Because preventive controls are more sensitive and identify more exceptions than detective controls.

Because preventive controls include output procedures, which cover the full range of possible reviews, reconciliations and analysis.

Because preventive controls identify exceptions after-the-fact, allowing them to be used after the entire review is complete and therefore finding exceptions that detective controls may have missed.

33. An internal audit activity (IAA) provided assurance services for an activity it was responsible for during the preceding year.

As a result, which IIA Code of Ethics principle is presumed to be impaired?

Competence.

Flexibility.

Objectivity.

Independence.

34. Which of the following professional development approaches would offer internal auditors the most opportunities to broaden their engagement experiences?

Assign more experienced internal auditors to mentor the less experienced auditors.

Send internal auditors to external trainings in advanced internal audit topics.

Appraise internal auditors' performance and competencies at least annually and issue constructive feedback.

Rotate internal auditors among different engagement assignments.

35. In which of the following scenarios would the chief audit executive (CAE) be required to decline the assignment?

The CAE would need to procure external services to deliver the internal audit assurance program.

There is no expertise within the internal audit team for detecting and investigating fraud.

There is no expertise within the internal audit team for auditing an IT engagement.

There is no available expertise on the internal audit team to perform a consulting engagement.

36. To fill a critical vacancy, an internal auditor is assigned temporarily to a nonaudit role in the purchasing department, where she worked previously before joining the internal audit activity.

According to IIA guidance, which of the following statements is true regarding these circumstances?

The chief audit executive (CAE) should review all work performed by the auditor during her temporary assignment to ensure no impairments.

The CAE may conduct audits in the purchasing department during the auditor's temporary assignment.

The auditor should obtain the CAE's approval as to the nature and scope of the duties she is permitted to perform during her temporary assignment.

Any work performed by the auditor during her temporary assignment must conform to the internal audit charter.

37. The relative complexity and extent of work needed to achieve the engagement's objectives.

1, 2, and 3

1, 2, and 4

1, 3, and 4

2, 3, and 4

38. Which of the following must be in existence as a precondition to developing an effective system of internal controls?

A monitoring process.

A risk assessment process.

A strategic objective-setting process.

An information and communication process.

39. A former line supervisor from the Financial Services Department has completed six months of a two-year development opportunity with the internal audit activity (IAA). She is assigned to a team that will audit the organization's payroll function, which is managed by the Human Resources Department.

Which of the following statements is most relevant regarding her independence and objectivity with respect to the payroll audit?

She may participate, but only after she has completed one year with the IA

She may participate, because she did not previously work in the Human Resources Department.

She may participate, but she must be supervised by the auditor in charge.

She may participate for training purposes, to build her knowledge of the IA

40. An internal auditor wants to sample data to test an audit theory in a cost-effective way.

Which of the following sampling strategies should she use?

Statistical sampling only

Nonstatistical sampling only

A combination of both statistical and nonstatistical sampling.

Neither approach to testing the audit theory would be cost effective.

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41. Which of the following is considered a violation of The IIA's Code of Ethics?

An auditor conveys public information about an organization's financial condition.

An auditor reports a manager's illegal activity to senior management, rather than reporting the incident to the appropriate external authority.

An auditor receives allegations of fraud from a whistleblower and immediately reports the allegations to senior management.

An auditor reports material deficiencies, despite the fact that management is already aware of the defects.

42. Ensure that the entire data set is tested.

1 and 2.

1 and 3.

2 and 3.

2 and 4.

43. Which of the following would provide the best guidance to a chief audit executive who is setting internal audit staff requirements?

A review of audit staff education and training records.

Information about the audit staff size and composition of comparable organizations.

Results from discussions of audit needs with executive management and the audit committee.

The results of the audit staff's most recent performance reviews.

44. 1.A staff auditor, nearly finished with an audit engagement, discovers that the director of marketing has a gambling habit. The gambling issue is not directly related to the existing engagement, and there is pressure to complete the current engagement. The auditor notes the problem and forwards the information to the chief audit executive, but performs no further follow-up.

Which of the following statements is true about the auditor's actions?

They are in violation of the IIA Code of Ethics because the auditor withheld meaningful information.

They are in violation of the Standards because the auditor did not properly follow up on a red flag that might indicate the existence of fraud.

They are in violation of neither the IIA Code of Ethics nor the Standards.

They are not in violation of the Standards but are in violation of the IIA Code of Ethics.

45. According to IIA guidance, which of the following describes the primary reason to implement environmental and social safeguards within an organization?

To enable Triple Bottom Line reporting capability.

To facilitate the conduct of risk assessment.

To achieve and maintain sustainable development.

To fulfill regulatory and compliance requirements.

46. They can rely on evidence taken from the work of other assurance activities across the organization.

1 and 2.

1 and 3.

2 and 3.

3 and 4.

47. An internal auditor would like to identify the involvement of various organizational units in handling employee travel reimbursement claims.

Which of the following methods would be most effective and efficient in completing this task?

Process mapping.

Interviewing.

Monitoring.

Distributing questionnaires.

48. The results of an internal audit activity's (IAA) quality assurance and improvement program are favorable and an external assessment was completed within the last five years.

Which of the following statements may the IAA use to describe its work?

"Completed with the advance certification of the External Assessors Association for Auditing Review."

"Conforms with the International Standards for the Professional Practice of Internal Auditing."

"Certified 100% accuracy, per the International Standards of External Assessment."

"Compliant with all domestic and international legal statutes, and certified quality assured for ten years."

49. According to IIA guidance, which of the following is an area in which the internal auditor should be proficient?

Management principles.

Computerized information systems.

Internal audit standards, procedures, and techniques.

Fundamentals of accounting, economics, and finance.

50. End user security is inadvertently granted to an unauthorized individual by management.

1 and 3.

1 and 4.

2 and 3.

2 and 4.

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51. What is the primary purpose of a fishbone diagram?

To depict the areas of responsibility for departments in an organization.

To plan and control complex projects, such as internal audits.

To represent the frequencies of adverse conditions in a given process.

To identify the possible causes of adverse conditions.

52. The internal audit activity may accept requests from management to perform advisory services regarding how the IT governance of the organization supports the organization's strategies and objectives.

1 only.

4 only.

2 and 4.

3 and 4.

53. Which of the following would not be a red flag for fraud?

Several recent, large expenditures to a new vendor have not been documented.

A manager has bragged about multiple extravagant vacations taken within the last year, which are excessive relative to the manager's salary.

A weak control environment has been accepted by management to encourage creativity.

New employees occasionally fail to meet established project deadlines due to staffing shortages.

54. Click the Exhibit.

Internal auditors are asked to keep track of how many hours per day they spend planning the audit, conducting the engagement, and writing the audit report.

The data for two days has been collected as follows:

Day 1

Day 2

Planning the audit

2 hours

3 hours

Conducting the engagement

1 hour

1 hour

Writing the audit report

2 hours

4 hours

Which of the following graphs depicts the data accurately?

Graph A only

Graph B only

Both A and

Neither A nor

55. An organization has implemented a software system that requires a supervisor to approve transactions that would cause treasury dealers to exceed their authorized limit.

This is an example of which of the following types of controls?

Preventive controls.

Detective controls.

Soft controls.

Directive controls.

56. An internal audit activity includes in its audit reports the assertion that its work is performed in conformance with the International Standards for the Professional Practice of Internal Auditing {Standards). A recent external quality assessment concluded that the internal

audit activity had substantial deficiencies that impact its overall operations. According to IIA guidance, which of the following is the most appropriate action for issuing future audit reports?

Refrain from indicating that the internal audit activity operates in conformance with the Standards until the chief audit executive confirms that the internal audit activity has addressed all areas of nonconformance and the audit committee has been notified.

Refrain from indicating that the internal audit activity operates in conformance with the Standards until another external assessment confirms that the significant areas of nonconformance have been addressed.

Indicate that the internal audit activity operates in partial conformance with the Standards, as the internal audit activity has a quality assurance and improvement program in place to address deficiencies and has met the requirement for conducting an external assessment.

Update and reissue previous audit reports, removing the assertion that the internal audit activity operates in conformance with the Standards, and distribute them to all parties who received the original reports.

57. According to IIA guidance, which of the following statements about working papers is false?

They assist in the implementation of recommendations.

They provide support for communication to third parties.

They demonstrate compliance with auditing standards.

They contribute to development of the internal audit staff.

58. According to IIA guidance, which of the following statements is true?

Risks in IT processes are best mitigated by individual controls.

The overall focus of the framework is on significant controls in all critical IT applications.

IT risks and related controls are operational and best identified using a bottom-up approach.

Control process risks are found at multiple layers of the IT environment.

59. Which of the following best describes the details that must be included in the quality assurance and improvement program (QAIP) report to senior management and the board?

The scope and frequency of internal and external assessments as well as the qualifications and independence of the assessor.

The scope and cost of the QAI

frequency of internal and external assessments, and conclusions of the assessor.

The scope, findings, risks, recommendations, and agreed-upon improvement actions.

The number and types of people involved in the assessment, costs, and duration of the QAIP

60. Which of the following is a preventive control?

Creating an audit trail.

Placing controls on physical access to inventory.

Reconciling purchase orders with approvals.

Reviewing expense accounts for irregularities.

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61. According to IIA guidance, which of the following practices by the chief audit executive (CAE) best enhances the organizational independence of the internal audit activity?

CAE reviews and approves the annual audit plan.

CAE meets privately with The CEO at least annually.

CAE meets privately with The board at least annually.

CAE reports to the board regarding audit staff performance evaluation and compensation.

62. Who is responsible for setting the risk appetite?

External auditors.

Chief risk officer.

Operations management.

Board of directors.

63. Which of the following would be considered a preventive control?

A library control log.

A review of exception reports.

A password lock on a server.

A software scan of financial records for irregularities.

64. Which of the following activities should the chief audit executive perform to ensure compliance with an organization's code of conduct?

Act as an adviser to the committee responsible for reviewing violations of the code.

Review and adjudicate all violations of the code of conduct.

Lead the committee responsible for the oversight of the code.

Implement a system of procedures to inform all employees of the code.

65. A candidate has applied for an entry level internal audit position. The candidate holds a CISA (Certified Information Systems Auditor) designation, and has six months of audit experience, but limited knowledge of accounting principles and techniques. According to the IIA guidance, which of the following is the most relevant reason for the chief audit

executive to consider this candidate?

Other internal auditors possess sufficient knowledge of accounting principles and techniques.

The candidate's information systems knowledge and real-world experience in internal auditing.

Accounting skills can be learned over time with appropriate training.

An entry level position does not require expertise in any particular area.

66. The management at a national consumer goods organization implements a fair work and pay practice as well as a policy to treat employees equitably and consistently.

Which common characteristics of fraud will the practice and policy most likely reduce?

Pressure or incentive.

Opportunity.

Rationalization.

Commitment.

67. During an engagement, an internal auditor decided to use variance analysis as an auditing techniques.

Which of the following steps should the auditor pursue if he discovers unexpected deviations of actual results from budget?

Report the deviations immediately to the audit committee.

Gather additional information to determine the cause of the deviations.

Conclude that the budget was unreasonably set and accept the deviations.

Perform alternative forms of analytical procedures which provide no deviations.

68. Which of the following is a weakness of observation as audit evidence?

It cannot be used to test the completeness assertion.

It cannot be used to test the existence assertion.

It cannot be used to test the occurrence assertion.

It cannot be relied upon because the evidence is not persuasive.

69. A manufacturing line supervisor joins the internal audit activity for a two-year rotational job assignment and is assigned to an accounts receivable audit.

With regard to this assignment, which of the following should be the primary concern of the audit manager?

Due professional care.

Individual independence.

Individual objectivity.

Organizational independence.

70. An internal audit team is performing an audit of workplace accident claims.

Which of the following actions by the audit team best demonstrates due professional care?

Having an occupational health officer on the engagement team.

Determining that the claims have been classified properly.

Placing reliance on medical reports from the injured worker's doctor.

Reviewing claims to ensure all accidents actually occurred in the workplace.

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71. An internal auditor completed an audit of a bank's loan department and found all significant risks to be managed adequately through effective internal controls.

Which of the following would be an appropriate conclusion to report to management?

The residual risk is lower than or equal to the risk appetite.

The residual risk is higher than or equal to the risk appetite.

The inherent risk is lower than or equal to the risk tolerance.

The inherent risk is higher than or equal to the risk tolerance.

72. A credit card company detects potential errors in credit card numbers by checking whether all entered numbers contain the correct amount of digits.

This is an example of which of the following IT controls?

Logic test.

Check digits.

Data integrity tests.

Balancing control activities.

73. An organization decides to take no action on one of its financial risks because the cost of implementing the control outweighs the value of the asset being protected.

Which of the following best describes this risk strategy?

Risk avoidance.

Risk-benefit analysis.

Risk sharing.

Risk acceptance.

74. During an account receivables audit, an internal auditor found a significant number of input errors resulting in a $500, 000 balance understatement.

Which of the following is the most important question the internal auditor should ask to develop an appropriate recommendation for this finding?

Who?

How?

Why?

When?

75. Control activities.

1 and 3 only

1 and 4 only

2 and 3 only

2 and 4 only

76. Report to those members of management who should be informed of results of audit examinations, the audit opinions formed, and the recommendations made.

1 and 2.

1 and 4.

2 and 3.

2 and 4.

77. Cost of the engagement versus the potential benefits.

1 and 4 only

2 and 3 only

2, 3, and 4 only

1, 2, 3, and 4

78. Which of the following best demonstrates the authority of the internal audit activity?

Suggesting alternatives to decision makers.

Improving the integrity of information.

Determining the scope of internal audit services.

Achieving engagement objectives.

79. While reviewing the workpapers of a new auditor, the auditor in charge discovered that additional audit procedures might be necessary.

According to IIA guidance, which of the following would be most relevant for the auditor in charge to consider when making this decision?

Resource management.

Coordination.

Due professional care.

Engagement supervision.

80. Which of the following combinations of conditions is most likely a red flag for fraud?

The practice of surprise audits and the implementation of an employee support program.

Hiring an employee with a prior fraud conviction and yearly management review.

Occasional accounting department overrides and discontinuation of the anonymous fraud hotline due to infrequent use.

A veteran employee in upper management experiencing financial difficulties and recently implemented enhanced controls.

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81. A chief audit executive (CAE) of an international charity reports functionally to the audit committee of the board of directors and administratively to the charity's chief financial officer (CFO).

Which of the following would impair the internal audit function's independence?

The CFO determines the scope of internal audit work in the accounting department.

The CFO manages the accounting of the budget for the internal audit function.

The CFO administers the annual evaluation process for the internal auditors.

The CFO provides feedback on the CAE's audit reports.

82. According to the Standards, which of the following is not a consideration when exercising due professional care for an assurance engagement?

The relative complexity, materiality, or significance of matters to which assurance procedures are applied.

The extent of assurance services necessary to ensure that all risks are identified.

The cost of providing the assurance services in relation to potential benefits.

The probability of significant errors, irregularities or instances of noncompliance.

83. Probability of significant errors, fraud, or noncompliance.

1 and 2 only

1, 2, and 3 only

1, 2, and 4 only

2, 3, and 4 only

84. Identify fraud.

1 and 4.

1 and 3.

2 and 3.

3 and 4.

85. Why is it important for the chief audit executive to periodically review the audit charter and present the results to senior management and the board?

Because management requires the review to measure effectiveness of the internal audit activity.

So that the individual objectivity of the internal audit staff can be more clearly established.

So that there is assurance of the internal audit staff's proficiency to complete audit activities.

Because changes in the organization may impair the internal audit activity's ability to meet its objectives.

86. Which of the following best describes the assessment of risks?

Assess the actions necessary to reduce the likelihood and/or impact of risk to tolerable levels.

Assess the likelihood and/or impact of risk on the achievement of organizational objectives.

Assess the amount of risk an organization can accept while pursuing its objectives.

Assess alternative strategies to reduce or eliminate major risks.

87. Which of the following statements is true about The IIA Global Internal Audit Competency Framework?

The core competencies outlined in the framework are not expected of a person undertaking an entry-level position as an internal auditor.

The framework is designed to be used primarily by chief audit executives that are developing indicators to measure the performance of the internal audit activity for which they are responsible.

The framework lists the core competencies internal auditors should possess before attempting to attain The IIA's Certified Internal Auditor certification.

The framework describes competencies needed for individual internal auditors, but not those necessary at the chief audit executive level.

88. According to The IIA's Code of Ethics, which of the following statements is true?

When an internal auditor releases required information to a regulator, resulting in a significant loss through fines and penalties for the organization, he fails to add value.

When an internal auditor limits the scope of the audit engagement after learning that management is hiding relevant information, he demonstrates integrity.

When an internal auditor disagrees with the treatment received by workers in the organization's foreign subsidiary and alters the audit program to highlight the issue, he fails to demonstrate objectivity.

When an internal auditor continues with an audit engagement, despite the audit client's claims that the work performed is unnecessary and redundant he fails to demonstrate competency.

89. In which of the following scenarios would a customer service hotline receive a high volume of complaints regarding payments not being applied to customers’ accounts?

Invoices are not being mailed to customers.

An employee is tampering with customer checks.

Employees are submitting fraudulent expense reports.

The customer service department is not forwarding complaints to the accounts receivable department.

90. An IT contractor applied for an internal audit position at a bank. The contractor worked for the bank's IT security manager two years ago. If the audit manager interviewed the contractor and wants to extend a job offer, which of the following actions should the chief audit executive pursue?

Allow the audit manager to hire the contractor and state that the individual is free to perform IT audits, including security.

Not allow the audit manager to hire the contractor, as it would be a conflict of interest.

Allow the audit manager to hire the contractor, but state that the individual is not allowed to work on IT security audits for one year.

Not allow the audit manager to hire the contractor and ask the individual to apply again in one year.

Page 10 of 10

91. Which of the following techniques would provide the most compelling evidence that a safety hazard exists within a manufacturing facility?

Observation of the facility during operations.

Questioning of facility management, including the facility safety officer.

Analysis of facility operating reports, focusing on instances when breakdowns occurred.

Review of records involving safety violations, filed by facility production employees.

92. Which of the following statements describes impairment to the internal auditor's objectivity?

An internal auditor reviews a purchasing agent's contract drafts prior to their execution.

An internal auditor reduces the scope of an audit engagement due to budget restrictions.

An internal auditor receives a promotional gift that is available to the organization's employees.

An internal auditor performs an assessment of the operations for which he was recently responsible.

93. Documenting risk mitigation strategies and techniques.

4 and 5 only.

1.2, and 3 only.

1.2. 4. and 5 only.

2. 3. 4. and 5 only.

94. An auditor identifies three errors in the sample of 25 entries selected for review (a 12 percent error rate). Based on this result, the auditor assumes that approximately 59 of the total population of 492 entries are incorrect.

To reach this assumption, the auditor has used a technique known as which of the following?

Variability tolerance.

Ratio estimation.

Stratification.

Acceptance sampling.

95. The manager for an organization's accounts payable department resigned her post in that capacity. Three months later, she was recruited to the internal audit activity and has been working with the audit team for the last eight months.

Which of the following assignments would the newly hired internal auditor be able to execute without any impairments to independence or objectivity?

An operations audit of the accounts payable department.

A consulting engagement related to a new accounts payable optimization initiative.

A review of the employees' sports club finances, which are overseen by the chief audit executive.

An assurance review for a sales program on which she previously provided consultation.

96. According to IIA guidance, which of the following is least compliant with the requirements regarding an internal auditor's need for objectivity?

An internal auditor assessed the effectiveness of controls over payroll software, which he had helped implement with a previous employer.

An internal auditor participated in an audit of controls around absenteeism, despite providing some consultation on controls in this area earlier in the year.

An internal auditor performed an assurance engagement for the effectiveness of accounts payable access controls, one of which he previously helped to design.

An internal auditor, previously employed in the quality assurance operations area, performed a consulting engagement for the operations manager.

97. Allegations have been made that an organization's share price has been manipulated.

Which of the following would provide an internal auditor with the most objective evidence in this case?

Major shareholders of the organization.

Large customers of the organization.

Former members of management.

Former financial consultants.

98. Visual observations can assist an auditor in determining if a material observation should be communicated through informal means to the organization’s senior management.

1 and 2 only

1 and 4 only

2 and 3 only

3 and 4 only

99. Which of the following best ensures an internal audit activity has the ability to render impartial and unbiased assessments?

Organizational status and objectivity.

Supervision of the chief audit executive (CAE) by senior management.

Organizational knowledge and skills.

CAE certification.

By Jonnie Karnath IIA Free Dumps Certification in Risk Management Assurance, IIA-CRMA-ADV 0 Comments

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