IIA IIA-CRMA-ADV Certification Exam Dumps with 285 Practice Test Questions
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NEW QUESTION # 30
According to COSO, which of the following is not considered one of the components of an organization's internal environment?
- A. Knowledge and skills needed to perform activities.
- B. Authority and responsibility to resolve issues.
- C. Framework to plan, execute and monitor activities.
- D. Integrated responses to multiple risks.
Answer: D
NEW QUESTION # 31
According to the Standards, which of the following is not a consideration when exercising due professional care for an assurance engagement?
- A. The probability of significant errors, irregularities or instances of noncompliance.
- B. The cost of providing the assurance services in relation to potential benefits.
- C. The relative complexity, materiality, or significance of matters to which assurance procedures are applied.
- D. The extent of assurance services necessary to ensure that all risks are identified.
Answer: D
NEW QUESTION # 32
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?
- A. Resource management.
- B. Engagement supervision.
- C. Due professional care.
- D. Coordination.
Answer: C
NEW QUESTION # 33
Which of the following types of fraud includes embezzlement?
- A. Corruption.
- B. Misappropriation of assets.
- C. Fraudulent statements.
- D. Bribery.
Answer: B
NEW QUESTION # 34
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?
- A. When?
- B. Who?
- C. How?
- D. Why?
Answer: D
NEW QUESTION # 35
Which of the following does not need to be defined in the internal audit charter?
- A. The scope of internal audit activities.
- B. The internal audit activity's position within the organization.
- C. Management and the board of directors' agreement regarding the roles and responsibilities of the internal audit activity.
- D. The audit engagements to be performed during the upcoming year.
Answer: D
NEW QUESTION # 36
Upon joining the internal audit activity, each new auditor receives a copy of the audit handbook. Which of the following handbook policies has the greatest risk of compromising audit objectivity?
- A. Internal auditors should have direct and unrestricted access to personnel and information throughout the organization and the governing board.
- B. Internal auditors should obtain 80 hours of continuing professional education every two years, 20 of which should be audit-related, and the remainder may be operations-related.
- C. Internal auditors should rotate to other areas of the organization for nonaudit assignments to gain an understanding of the organization's operations.
- D. Internal auditors should undergo annual performance appraisals conducted by the chief audit executive, who reports administratively to the chief financial officer.
Answer: C
NEW QUESTION # 37
Given the highly technical and legal nature of privacy issues, which of the following statements best describes the internal audit activity's responsibility with regard to assessing an organization's privacy framework?
- A. The internal audit activity should have appropriate knowledge and competence to conduct an asses
.......framework. - B. The internal audit activity may delegate to nonaudit IT specialists the responsibility of determining whether personal information has been secured adequately and data protection controls are sufficient.
- C. If an organization does not have a mature privacy framework, the internal audit activity should assist in developing and implementing an appropriate privacy framework.
- D. Because the audit committee is ultimately responsible for ensuring that appropriate control processes are in place to mitigate risks associated with personal information, the internal audit activity is C. required to conduct privacy assessments.
Answer: A
NEW QUESTION # 38
What type of risk management strategy is being employed when an organization installs two firewalls to provide protection from unauthorized access to the network?
- A. Sharing the risk that either firewall could be compromised by hackers.
- B. Diversifying the risk that network access will not be available to legitimate, authorized users.
- C. Avoiding the risk of having a direct network connection to un-trusted networks.
- D. Accepting the risk that there may be attempts at unauthorized access to the network.
Answer: B
NEW QUESTION # 39
Which of the following is a detective control strategy against fraud?
- A. Performing a surprise audit.
- B. Implementing a control self-assessment.
- C. Requiring employees to attend ethics training.
- D. Performing background checks on employees.
Answer: A
NEW QUESTION # 40
The chief audit executive (CAE) has assigned an internal auditor to an upcoming engagement. Which of the following requirements would most likely indicate that the internal auditor was assigned to an assurance engagement?
- A. The assigned internal auditor must maintain objectivity while performing the engagement.
- B. The assigned internal auditor must determine the objectives, scope, and techniques of the engagement.
- C. The CAE must personally obtain the needed skills, knowledge, or other competencies if the internal auditor does not have them.
- D. The assigned internal auditor must not assume management responsibilities while performing the engagement.
Answer: B
NEW QUESTION # 41
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?
- A. Any work performed by the auditor during her temporary assignment must conform to the internal audit charter.
- B. The CAE may conduct audits in the purchasing department during the auditor's temporary assignment.
- C. The chief audit executive (CAE) should review all work performed by the auditor during her temporary assignment to ensure no impairments.
- D. 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.
Answer: D
NEW QUESTION # 42
A chief audit executive (CAE) reports functionally to the CEO and administratively to the chief financial officer, both of whom serve on the company's board of directors. According to IIA guidance, which of the following would offer the greatest protection for the independence of the internal audit activity?
- A. Obtain full board approval of the internal audit activity's annual audit plan.
- B. Move the CAE's functional reporting to an executive who is not on the board.
- C. Appoint the CAE as a member of the board.
- D. Move the CAE's functional reporting to the audit committee.
Answer: D
NEW QUESTION # 43
Which of the following is most likely to enhance an internal auditor's objectivity?
- A. An auditor avoids conflicts of interest.
- B. An auditor is appropriately able to communicate results.
- C. An auditor performs his work free from interference.
- D. An auditor is unrestricted in determination of scope.
Answer: A
NEW QUESTION # 44
Forty-five percent of an organization's customer payments are submitted online. Eight percent of online payments are rejected. Executive management decides to outsource its online payment services to a contractor that will assume 75 percent of the total value of rejected payments. The organization estimates $1.25 million customer payments due during the contract period.
Which of the following represents the organization's residual risk for online customer payments due?
- A. $25, 000
- B. $11, 250
- C. $45, 000
- D. $33, 750
Answer: B
NEW QUESTION # 45
What is the primary benefit to the internal audit activity for undertaking an internal quality assessment?
- A. To identify inefficiencies within the internal audit team.
- B. To identify key risks and areas of concern within the organization.
- C. To help improve the overall quality of the internal audit activity's work.
- D. To help the internal audit activity complete its annual assurance plan.
Answer: C
NEW QUESTION # 46
According to IIA guidance, which of the following is ultimately responsible for seeing that the internal control system of an organization's social responsibility program is effective?
- A. Board of directors.
- B. Senior management.
- C. Internal audit activity.
- D. All employees.
Answer: A
NEW QUESTION # 47
Which of the following combinations of conditions is most likely a red flag for fraud?
- A. Hiring an employee with a prior fraud conviction and yearly management review.
- B. The practice of surprise audits and the implementation of an employee support program.
- C. A veteran employee in upper management experiencing financial difficulties and recently implemented enhanced controls.
- D. Occasional accounting department overrides and discontinuation of the anonymous fraud hotline due to infrequent use.
Answer: D
NEW QUESTION # 48
Which of the following is the most effective strategy to manage the risk of foreign exchange losses due to sales to foreign customers?
- A. Insist that customers only pay in a stable currency.
- B. Maintain a large foreign currency balance.
- C. Hire a risk consultant.
- D. Implement a hedging strategy.
Answer: D
NEW QUESTION # 49
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?
- A. The residual risk is lower than or equal to the risk appetite.
- B. The inherent risk is lower than or equal to the risk tolerance.
- C. The residual risk is higher than or equal to the risk appetite.
- D. The inherent risk is higher than or equal to the risk tolerance.
Answer: A
NEW QUESTION # 50
What is the purpose of a secondary control?
- A. lt combines with other controls to help reduce significant risk exposures to an acceptable level.
- B. It helps to ensure the completeness and accuracy of automated controls in a system environment.
- C. It partially reduces the residual risk level when a key control does not operate effectively.
- D. It replaces primary controls that are either ineffective or cannot fully mitigate a risk.
Answer: A
NEW QUESTION # 51
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