[Jan 21, 2022] IIA-CRMA Practice Exam Dumps - 99% Marks In IIA Exam
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IIA IIA-CRMA Exam Syllabus Topics:
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NEW QUESTION 79
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. 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.
- C. 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.
- D. 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.
Answer: C
NEW QUESTION 80
Which of the following documents is most appropriate in promoting the objectivity of the internal audit activity?
- A. Personal responsibility policy.
- B. Usage of IT system policy.
- C. Acceptance of gifts policy.
- D. Risk management framework.
Answer: C
NEW QUESTION 81
According to IIA guidance, when preparing the charter for the internal audit activity, the chief audit executive (CAE), board, and senior management should agree on which of the following?
1. The standards to be used by the internal audit activity.
2. The internal audit activity's code of ethics.
3. The CAE's reporting line.
4. The internal audit activity's responsibilities.
- A. 4 only.
- B. 1 and 2 only.
- C. 3 and 4.
- D. 1,2, and 3.
Answer: C
NEW QUESTION 82
Why are preventative controls generally preferred to detective controls?
- A. Because preventive controls include output procedures, which cover the full range of possible reviews, reconciliations and analysis.
- B. Because preventive controls are more sensitive and identify more exceptions than detective controls.
- C. 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.
- D. Because preventive controls promote doing the right thing in the first place, and lessen the need for corrective action.
Answer: D
NEW QUESTION 83
Which of the following is the most common way that occupational fraud is detected?
- A. External audits.
- B. Key controls.
- C. Internal audits.
- D. Whistleblower hotline.
Answer: D
NEW QUESTION 84
According to The IIA's Code of Ethics, which of the following is true?
- A. Confidentiality requires that auditors be prudent in the use and protection of client information.
- B. Confidentiality requires that auditors disclose all material facts known to them.
- C. Objectivity requires that auditors perform their work with honesty, diligence, and responsibility.
- D. Integrity requires that auditors perform internal audit services in accordance with the Standards.
Answer: A
NEW QUESTION 85
Which of the following is an example of collusion?
- A. A vendor inflates the price of an item and remits a portion of the excess to the purchasing manager.
- B. A vendor sends a duplicate invoice with a new invoice number, and the accounts payable system fails to detect the duplication.
- C. An employee works with the IT manager to develop a program for identifying duplicate invoice payments.
- D. An employee includes a faked receipt in his expense claim, and the claim is signed by the employee's manager.
Answer: A
NEW QUESTION 86
An internal auditor uses a predefined macro provided in a popular spreadsheet application to verify the present value of the organization's investments. Which of the following is the most appropriate course of action regarding the auditor's use of this functionality?
- A. The auditor should accept the calculations generated by the function, as any further work or documentation would be inefficient.
- B. The auditor should tabulate the results in the spreadsheet to ensure the macro has generated the correct results for all calculations.
- C. The auditor should perform a manual recalculation of several results to validate and document the results.
- D. The auditor should review the programming of the macro before its use to ensure that it is appropriate for the required calculations.
Answer: C
NEW QUESTION 87
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?
- A. Commitment.
- B. Pressure or incentive.
- C. Opportunity.
- D. Rationalization.
Answer: B
NEW QUESTION 88
Which of the following actions indicates a lack of due professional care by an internal auditor performing an audit of a store's cash function?
- A. The auditor discovered an instance of potential fraud and reported it immediately to management, but did not alert authorities outside the organization.
- B. The auditor tested samples of transactions to test the cash function's process flows.
- C. The audit report included a well-supported recommendation for a reduction in staff even though such a reduction might adversely impact morale.
- D. After determining that the cash function internal controls were strong, the audit report assured senior management that fraud was not present.
Answer: D
NEW QUESTION 89
A manufacturing organization discovers that the waste water released has failed to meet permitted limits.
Which control function will be least effective in correcting the issue?
- A. Establishing a preventive maintenance program for the pretreatment system.
- B. Posting signs that tell employees which substances may be disposed of via sinks and floor drains within the facility.
- C. Diluting pollutants by flushing sinks and floor drains daily with large volumes of clean water.
- D. Performing a chemical analysis of the water, prior to discharge, for components specified in the permit.
Answer: C
NEW QUESTION 90
According to the COSO enterprise risk management framework, which of the following best describes the activity that helps ensure risk responses are carried out effectively?
- A. Control activities.
- B. Information and communication.
- C. Objective setting.
- D. Event identification.
Answer: A
NEW QUESTION 91
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?
- A. Condition section.
- B. Cause section.
- C. Criteria section.
- D. Effect section.
Answer: D
NEW QUESTION 92
While preparing for an audit of senior management expenses, the chief audit executive (CAE) learns that management is unable to locate a number of original expense claims to support the related disbursements. She decides to defer the engagement until they can be located. Which of the following principles likely guided the CAE's decision?
- A. Independence.
- B. Due professional care.
- C. Proficiency.
- D. Objectivity.
Answer: B
NEW QUESTION 93
Which of the following scenarios exemplifies a potential internal control weakness?
- A. The same employee who records cash receipts in the accounts receivable subsidiary ledger ensures that the ledger automatically updates the information.
- B. The same employee who makes deposits at the bank prepares the monthly bank reconciliation.
- C. The same employee who restrictively endorses checks received from customers prepares the bank's check deposit slips.
- D. The same employee who receives cash from customers prepares a prelisting of cash receipts.
Answer: B
NEW QUESTION 94
Which of the following is a weakness of observation as audit evidence?
- A. It cannot be used to test the occurrence assertion.
- B. It cannot be used to test the completeness assertion.
- C. It cannot be used to test the existence assertion.
- D. It cannot be relied upon because the evidence is not persuasive.
Answer: B
NEW QUESTION 95
After being terminated due to downsizing, an internal auditor finds a different job with an organization in the same industry. Which of the following actions would violate the IIA Code of Ethics?
- A. In preparing for an audit at the previous organization, the auditor had conducted a great deal of research on the Internet at home to identify best practices for the management of a treasury function. The auditor has retained much of the research and uses it to conduct an audit of the new employer's treasury function.
- B. To determine audit priorities in the new job, the auditor uses the audit risk approach that the auditor's previous employer used, without receiving permission to do so.
- C. At the new organization, the auditor is asked to develop forms to implement probability-proportional-to-size sampling. Although unsure of how to perform this type of sampling, the auditor proceeds without asking for assistance.
- D. In the first week at the new organization, the auditor discovers a high fraud risk surrounding the organization's database and suggests that the information technology department implement a new password system to prevent fraudulent actions before they occur.
Answer: C
NEW QUESTION 96
If an engagement client disputes that a specific action or process is within the scope of the internal audit activity, what would be the most appropriate way for the internal audit activity (IAA) to respond?
- A. Refer the client to the IAA's charter and the approved yearly audit plan, which includes the areas designated for audit in the current time period.
- B. Terminate the audit engagement in full because an operational audit will not be productive without the client's cooperation.
- C. Terminate only the specific action or process with which the client disagrees and work to determine a substitute function that will not impede further IAA or the client-audit relationship.
- D. Seek the approval of senior management or the board in mediation, allowing an overseer to clarify the scope of the audit engagement for the client.
Answer: A
NEW QUESTION 97
Which of the following is an example of a risk avoidance strategy?
- A. Hedging against exchange rate variations.
- B. Limiting access to an organization's data center.
- C. Selling a nonstrategic business unit.
- D. Outsourcing a high-risk activity.
Answer: C
NEW QUESTION 98
According to IIA guidance, which of the following statements is false regarding continuing professional education for the internal audit activity (IAA)?
- A. Continuing professional education can be obtained through IAA involvement in research projects.
- B. Completion of self-study courses fulfills IAA continuing professional education requirements.
- C. Employers are responsible for ensuring that the continuing professional education needs of the IAA are met.
- D. Specialized education that meets unique organizational needs cannot qualify as IAA professional development.
Answer: C
NEW QUESTION 99
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