IIA-CRMA Exam Info and Free Practice Test Professional Quiz Study Materials

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NEW QUESTION # 137
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?

• A. The number and types of people involved in the assessment, costs, and duration of the QAIP
• B. The scope and cost of the QAIP. frequency of internal and external assessments, and conclusions of the assessor.
• C. The scope and frequency of internal and external assessments as well as the qualifications and independence of the assessor.
• D. The scope, findings, risks, recommendations, and agreed-upon improvement actions.

Answer: D

NEW QUESTION # 138
As a matter of policy, the chief audit executive routinely rotates internal audit staff assignments and periodically interviews the staff to discuss the potential for conflicts of interest. These actions help fulfill which of the following internal audit mandates?

• A. Organizational independence.
• B. Professional objectivity.
• C. Due professional care.
• D. Individual proficiency.

Answer: B

NEW QUESTION # 139
According to The IIA's Code of Ethics, which of the following is true?

• A. Objectivity requires that auditors perform their work with honesty, diligence, and responsibility.
• B. Confidentiality requires that auditors be prudent in the use and protection of client information.
• C. Integrity requires that auditors perform internal audit services in accordance with the Standards.
• D. Confidentiality requires that auditors disclose all material facts known to them.

Answer: B

NEW QUESTION # 140
Which of the following is the most significant disadvantage of using checklists to evaluate internal controls?

• A. They do not capture all controls that may exist.
• B. They serve as a reminder of what controls should exist in a process.
• C. They require yes/no responses to specific questions, not open-ended responses.
• D. They are useful in assessing risk.

Answer: A

NEW QUESTION # 141
Which of the following does not need to be defined in the internal audit charter?

• A. Management and the board of directors' agreement regarding the roles and responsibilities of the internal audit activity.
• B. The internal audit activity's position within the organization.
• C. The scope of internal audit activities.
• D. The audit engagements to be performed during the upcoming year.

Answer: D

NEW QUESTION # 142
Which of the following is most likely to function as a directive control?

• A. Security dogs.
• B. Cycle counts.
• C. Alert employees.
• D. Insurance claims.

Answer: C

NEW QUESTION # 143
Which of the following factors should be considered when determining the appropriate combination of manual techniques and computer-assisted audit techniques (CAATs) to be used during an audit?
1. Acceptance of CAATs findings by entity management.
2. Computer knowledge and expertise of the auditor.
3. Time constraints.
4. Level of audit risk.

• A. 2 and 3 only
• B. 1, 2, and 3
• C. 1 and 4
• D. 2, 3, and 4

Answer: D

NEW QUESTION # 144
Which of the following types of fraud includes embezzlement?

• A. Misappropriation of assets.
• B. Fraudulent statements.
• C. Corruption.
• D. Bribery.

Answer: A

NEW QUESTION # 145
According to the Standards, for how long should internal auditors who have previously performed or had management responsibility for an operation wait to become involved in future internal audit activity with that same operation?

• A. One year.
• B. Three months.
• C. Six months.
• D. Two years.

Answer: A

NEW QUESTION # 146
When developing the organization's first risk universe, which of the following would the chief audit executive be least likely to consider?

• A. The amount of risk that an organization is willing to seek or accept.
• B. The boundaries established to manage the amount of risk taken.
• C. The extent and degree of interdependency for identified key risks.
• D. The exposure to risks following management's risk responses.

Answer: D

NEW QUESTION # 147
According to IIA guidance, the results of a formal quality assessment should be reported to which of the following groups?

• A. The audit committee and senior management.
• B. Senior management and the external auditors.
• C. The audit committee and the external auditors.
• D. Senior management and management of the audited area.

Answer: A

NEW QUESTION # 148
When auditing the award of a major contract, which of the following should an internal auditor suspect as a red flag for a bidding fraud scheme?
1. Subsequent change orders increase requirements for low-bid items.
2. Material contract requirements are different on the actual contract than on the request for bids.
3. A high percentage of employees are charged to indirect accounts.
4. Losing bidders are hired as subcontractors.

• A. 1 and 3.
• B. 2 and 4.
• C. 2 only
• D. 1 only

Answer: B

NEW QUESTION # 149
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?

• A. 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.
• B. 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.
• C. 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.
• D. 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.

Answer: B

NEW QUESTION # 150
The chief audit executive (CAE) is planning to conduct an internal assessment of the internal audit activity (IAA). Part of this assessment will include benchmarking. According to IIA guidance, which of the following qualitative metrics would be appropriate for the CAE to use?
1. Average client customer satisfaction score for a given year.
2. Client survey comments on how to improve the IAA.
3. Auditor interviews once an audit has been completed.
4. Percentage of audits completed within 90 days.

• A. 3 and 4.
• B. 1 and 3.
• C. 2 and 3.
• D. 1 and 2.

Answer: C

NEW QUESTION # 151
According to IIA guidance, which of the following statements is true regarding periodic internal assessments of the internal audit activity?

• A. Internal assessments must be performed at least once every five years by a qualified assessor.
• B. Follow-up to ensure appropriate improvements are implemented is a recommended, but not mandatory, element of internal assessments.
• C. Internal assessments are conducted to benchmark the internal audit activity's performance against industry best practices.
• D. An internal auditor may perform a peer review of a colleague's workpapers, as long as the auditor wasn't involved in the audit under review.

Answer: D

NEW QUESTION # 152
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?

• A. The overall effectiveness of the internal audit activity's periodic self assessments.
• B. The scope and frequency of external assessments.
• C. The type of audit productivity and performance statistics reported.
• D. The adequacy of the day-to-day supervision and review process.

Answer: D

NEW QUESTION # 153
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 replaces primary controls that are either ineffective or cannot fully mitigate a risk.
• C. It helps to ensure the completeness and accuracy of automated controls in a system environment.
• D. It partially reduces the residual risk level when a key control does not operate effectively.

Answer: A

NEW QUESTION # 154
Which of the following is an example of a transaction-level control?

• A. Tone at the top.
• B. Human resource policies.
• C. Reconciliations of primary accounts.
• D. Inventory counts.

Answer: C

NEW QUESTION # 155
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?

• A. She may participate, but she must be supervised by the auditor in charge.
• B. She may participate, but only after she has completed one year with the IAA.
• C. She may participate, because she did not previously work in the Human Resources Department.
• D. She may participate for training purposes, to build her knowledge of the IAA.

Answer: C

NEW QUESTION # 156
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?

• A. Apply antivirus and patch management software.
• B. Utilize dedicated and encrypted network connections.
• C. Utilize secure socket layer encryption.
• D. Install a software inventory management application.

Answer: D

NEW QUESTION # 157
Which of the following statements is true about The IIA Global Internal Audit Competency Framework?

• A. The framework describes competencies needed for individual internal auditors, but not those necessary at the chief audit executive level.
• B. The core competencies outlined in the framework are not expected of a person undertaking an entry-level position as an internal auditor.
• C. The framework lists the core competencies internal auditors should possess before attempting to attain The IIA's Certified Internal Auditor certification.
• D. 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.

Answer: D

NEW QUESTION # 158
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