2022 Valid IIA-CRMA Exam Updates - 2022 Study Guide
IIA-CRMA Certification - The Ultimate Guide [Updated 2022]
NEW QUESTION 34
According to The IIA's Code of Ethics, which of the following statements is true?
- A. When an internal auditor limits the scope of the audit engagement after learning that management is hiding relevant information, he demonstrates integrity.
- B. 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.
- C. 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.
- D. 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.
Answer: B
NEW QUESTION 35
Management is developing and implementing a risk and control framework for use throughout the organization. Which of the following elements should be included in the organization's control framework?
1. Appropriate levels of authority and responsibility.
2. Supervision of staff and appropriate review of work.
3. The seniority of management in the organization.
4. The ability to trace each transaction to an accountable and responsible individual.
- A. 1.3, and 4.
- B. 1.2, and 4.
- C. 2, 3, and 4.
- D. 1,2, and 3.
Answer: C
NEW QUESTION 36
With regard To IT governance, which of the following is the most effective and appropriate role for the internal audit activity?
- A. Assist management in interpreting complex IT-related privacy and security risk exposures and evaluating potential mitigation strategies.
- B. Assess whether governance activities are aligned with the organization's risk appetite and take into consideration emerging risks.
- C. Independently evaluate the skills and experience of potential chief information officer candidates to assess the best fit based on the organization's risk appetite.
- D. Evaluate the organization's governance standards and assess IT-related activities to identify gaps and develop policies, ensuring alignment with the organization's risk appetite.
Answer: B
NEW QUESTION 37
Which of the following activities is most likely to require a fraud specialist to supplement the knowledge and skills of the internal audit activity?
- A. Interrogating a suspected fraudster.
- B. Planning an engagement of the area in which fraud is suspected.
- C. Completing a process review to improve controls to prevent fraud.
- D. Employing audit tests to detect fraud.
Answer: D
NEW QUESTION 38
Which of the following statements is true regarding assurance services provided to clients outside of the organization?
- A. The nature of assurance services for outside clients is the same as for internal clients.
- B. Assurance services for outside clients must be approved on a case-by-case basis by the board of directors.
- C. Assurance services for outside clients are not covered under the internal audit charter.
- D. The nature of assurance services for outside clients should be defined in the internal audit charter.
Answer: D
NEW QUESTION 39
Which of the following statements is true with regard to conducting an effective quality assurance and improvement program?
- A. Periodic internal assessments provide the most current and independent recommendations for improvement.
- B. The conclusions of periodic internal assessments are intended to assist in achieving conformity to the Standards.
- C. Members of the internal audit activity are not permitted to perform quality assessments, as they would not be independent.
- D. The IIA's Quality Assessment Manual for the Internal Audit Activity must be used as the basis for periodic assessments.
Answer: B
NEW QUESTION 40
When developing the organization's first risk universe, which of the following would the chief audit executive be least likely to consider?
- A. The exposure to risks following management's risk responses.
- B. The amount of risk that an organization is willing to seek or accept.
- C. The extent and degree of interdependency for identified key risks.
- D. The boundaries established to manage the amount of risk taken.
Answer: A
NEW QUESTION 41
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?
- A. Risk acceptance.
- B. Risk-benefit analysis.
- C. Risk sharing.
- D. Risk avoidance.
Answer: A
NEW QUESTION 42
An internal audit charter describes the mission and scope of the internal audit activity (IAA), responsibilities of the IAA, accountability of the chief audit executive, independence of the IAA, and standards followed by the IAA. Which of the following also should be included in the charter?
- A. A detailed audit plan or program for the year.
- B. The IAA's right to have unrestricted access to functions, records, personnel, and physical property.
- C. The job specifications and descriptions of the internal audit staff.
- D. The purpose of the IAA.
Answer: B
NEW QUESTION 43
According to IIA guidance, which of the following statements is true?
- A. Risks in IT processes are best mitigated by individual controls.
- B. Control process risks are found at multiple layers of the IT environment.
- C. IT risks and related controls are operational and best identified using a bottom-up approach.
- D. The overall focus of the framework is on significant controls in all critical IT applications.
Answer: B
NEW QUESTION 44
According to IIA guidance, which of the following statements describes one of the similarities between assurance and consulting services?
- A. Internal auditors must not provide assurance or consulting services for an activity for which they had responsibility within the previous year.
- B. Internal auditors determine the engagement objectives, scope, and work program for both assurance and consulting services.
- C. When planning assurance and consulting engagements, internal auditors must consider the strategies and objectives of the activity being reviewed.
- D. Both assurance and consulting services generally involve the internal auditor, the area under review, senior management, and the board.
Answer: C
NEW QUESTION 45
Which of the following is an example of a risk management avoidance response?
- A. Obtaining product insurance.
- B. Recalling a product.
- C. Exiting a marketplace.
- D. Outsourcing production.
Answer: C
NEW QUESTION 46
According to COSO, which of the following is not considered one of the components of an organization's internal environment?
- A. Framework to plan, execute and monitor activities.
- B. Integrated responses to multiple risks.
- C. Authority and responsibility to resolve issues.
- D. Knowledge and skills needed to perform activities.
Answer: B
NEW QUESTION 47
Which of the following is true regarding the use of a formal risk management framework?
1. It facilitates a methodical approach to risk mitigation.
2. It defines and standardizes the terminology used in risk communication.
3. It establishes the risk tolerance levels to be accommodated in the strategy.
4. It facilitates the alignment of risk mitigation strategies with management priorities.
- A. 1.3, and 4.
- B. 1,2, and 4.
- C. 2. 3, and 4.
- D. 1.2, and 3.
Answer: B
NEW QUESTION 48
According to the Standards, which of the following best describes why initial audit test results should be reported to the auditor-in-charge prior to advising management?
- A. It helps ensure that appropriate professional judgments and conclusions are made.
- B. It increases the likelihood of obtaining the audit client's agreement with the results.
- C. It is required to demonstrate that effective engagement supervision has occurred.
- D. It ensures that an appropriate chain of evidence is maintained through the workpapers.
Answer: A
NEW QUESTION 49
Which of the following are components of the COSO enterprise risk management framework?
1. Objective setting.
2. External environment.
3. Data collection.
4. Control activities.
- A. 2 and 4 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1 and 4 only
Answer: D
NEW QUESTION 50
Which of the following statements accurately describes an internal auditor's responsibility with regard to due professional care?
- A. An internal auditor's opinion should be based on factual evidence.
- B. An internal auditor's opinion should be based on experience and free of all bias.
- C. An internal auditor's opinion should be limited to the effectiveness of internal controls.
- D. An internal auditor should express an opinion only when consensus with top management has been achieved.
Answer: A
NEW QUESTION 51
According to IIA guidance, which of the following statements is true when an internal auditor performs consulting services that improve an organization's operations?
- A. The services must not be performed by the same internal auditor who performed assurance services, in order to maintain objectivity.
- B. The services impose no responsibility to communicate information other than to the engagement client.
- C. The services may preclude assurance services from the consulting engagement.
- D. The services must be aligned with those defined in the internal audit charter.
Answer: A
NEW QUESTION 52
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?
- A. From acceptance to avoidance.
- B. From acceptance to reduction.
- C. From sharing to avoidance.
- D. From sharing to reduction.
Answer: D
NEW QUESTION 53
An internal auditor needs to recommend a policy element to be included in an organization's code of ethics.
Which of the following recommendations would be most effective?
- A. Ethics should vary with local customs in the organization's foreign operations.
- B. Whistleblowing should be discouraged because it can cause distrust among employees.
- C. Ethical behavior should be incorporated into performance evaluations.
- D. Senior management should be granted specific exemptions to the code of ethics.
Answer: C
NEW QUESTION 54
During an internal audit, the internal auditor compares the employee turnover rate in the area being audited with the employee turnover rate in the organization as a whole.
This is an example of which of the following analytical auditing procedures?
- A. Reasonableness test.
- B. Benchmarking.
- C. Trend analysis.
- D. Regression analysis.
Answer: B
NEW QUESTION 55
Which of the following scenarios best illustrates a rationalization as the root cause of potential fraud?
- A. The organization is slowly phasing out three mature products that produce the highest commissions for the sales staff.
- B. The controller at a nationwide manufacturing company recently opted to no longer require two-week mandatory vacations for accounting staff.
- C. Managers who have been with the organization for several decades become aware that newly hired, younger managers are being moved more quickly into senior positions.
- D. Security cameras that monitor cash handling at the register are not functioning.
Answer: B
NEW QUESTION 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?
- 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 57
An internal audit charter should do which of the following?
- A. Communicate the internal audit activity's goals.
- B. Establish the size of the internal audit activity.
- C. Define the scope of internal audit activities.
- D. Outline the schedule of future audits.
Answer: C
NEW QUESTION 58
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 management of the audited area.
- C. Senior management and the external auditors.
- D. The audit committee and the external auditors.
Answer: A
NEW QUESTION 59
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