Latest IIA IIA-CRMA-ADV Actual Free Exam Questions & Community Discussion, Page 1

Question #1

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 rotate to other areas of the organization for nonaudit assignments to gain an understanding of the organization's operations.

B. Internal auditors should have direct and unrestricted access to personnel and information throughout the organization and the governing board.

C. Internal auditors should undergo annual performance appraisals conducted by the chief audit executive, who reports administratively to the chief financial officer.

D. 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.

Discussion 0

Correct Answer: A Vote an answer

Question #2

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

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

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

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

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

Discussion 0

Correct Answer: D Vote an answer

Question #3

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. 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.

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. 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.

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.

Discussion 0

Correct Answer: B Vote an answer

Question #4

Which of the following is an example of a risk avoidance strategy?

A. Selling a nonstrategic business unit.

B. Hedging against exchange rate variations.

C. Limiting access to an organization's data center.

D. Outsourcing a high-risk activity.

Discussion 0

Correct Answer: A Vote an answer

Question #5

According to the International Professional Practices Framework, which of the following are allowable activities for an internal auditor?
1. Advocating the establishment of a risk management function.
2. Identifying and evaluating significant risk exposures during audit engagements.
3. Developing a risk response for the organization if there is no chief risk officer.
4. Benchmarking risk management activities with other organizations.
5. Documenting risk mitigation strategies and techniques.

A. 1.2, and 3 only.

B. 4 and 5 only.

C. 1.2. 4. and 5 only.

D. 2. 3. 4. and 5 only.

Discussion 0

Correct Answer: C Vote an answer

Question #6

According to IIA guidance, which of the following is not a responsibility of the chief audit executive pertaining to documenting information to support internal audit engagement results and conclusions?

A. Developing retention requirements for engagement records that are consistent with organizational guidelines.

B. Controlling access to engagement records, including access by senior management.

C. Rating each engagement record to assess its relevance and accessibility for the organization's board.

D. Forming policies governing the custody and retention of consulting engagement records before their release to other parties.

Discussion 0

Correct Answer: C Vote an answer

Question #7

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

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

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

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

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

Discussion 0

Correct Answer: A Vote an answer

Question #8

In which of the following functions would fraud be most likely to occur?

A. Preparing customer statements.

B. Maintaining custody of inventory records.

C. Collecting payments on accounts.

D. Approving changes to employee records.

Discussion 0

Correct Answer: C Vote an answer

Question #9

While auditing an organization's credit approval process, an internal auditor learns that the organization has made a large loan to another auditor's relative. Which course of action should the auditor take?

A. Have the chief audit executive and management determine whether the auditor should continue with the audit engagement.

B. Disclose in the engagement final communication that the relative is a customer.

C. Proceed with the audit engagement, but do not include the relative's information.

D. Immediately withdraw from the audit engagement.

Discussion 0

Correct Answer: A Vote an answer

Question #10

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

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

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

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

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

Discussion 0

Correct Answer: B Vote an answer

Question #11

According to The MA Code of Ethics, which of the following is one of the rules of conduct for objectivity?

A. Internal auditors shall be prudent in the use and protection of information acquired in the course of their duties.

B. Internal auditors shall continually improve their proficiency and effectiveness and quality of their services.

C. Internal auditors shall not accept anything that may impair or be presumed to impair their professional judgment.

D. Internal auditors shall respect and contribute to legitimate and ethical objectives of the organization.

Discussion 0

Correct Answer: C Vote an answer

Question #12

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

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

B. Rotate internal auditors among different engagement assignments.

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

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

Discussion 0

Correct Answer: B Vote an answer

Question #13

Which of the following is the primary engagement responsibility of an entry-level internal auditor?

A. Documentation.

B. Leadership.

C. Analysis.

D. Reporting.

Discussion 0

Correct Answer: C Vote an answer

Question #14

Which of the following conditions is the most likely indicator of fraud?

A. Lower earnings occur during the industry's down cycle.

B. Departmental reports are consistently issued in an untimely manner.

C. Commissions are paid based on verified increases to sales.

D. A manager regularly assumes subordinates' duties.

Discussion 0

Correct Answer: D Vote an answer

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