IIA-CRMA Online Practice Questions and Answers

Why is it important for the chief audit executive to periodically review the audit charter and present the results to senior management and the board?

A. Because management requires the review to measure effectiveness of the internal audit activity.

B. So that the individual objectivity of the internal audit staff can be more clearly established.

C. So that there is assurance of the internal audit staff's proficiency to complete audit activities.

D. Because changes in the organization may impair the internal audit activity's ability to meet its objectives.

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. Regression analysis.

C. Benchmarking.

D. Trend analysis.

Allegations have been made that an organization's share price has been manipulated.

Which of the following would provide an internal auditor with the most objective evidence in this case?

A. Major shareholders of the organization.

B. Large customers of the organization.

C. Former members of management.

D. Former financial consultants.

Which of the following would not be a red flag for fraud?

A. Several recent, large expenditures to a new vendor have not been documented.

B. A manager has bragged about multiple extravagant vacations taken within the last year, which are excessive relative to the manager's salary.

C. A weak control environment has been accepted by management to encourage creativity.

D. New employees occasionally fail to meet established project deadlines due to staffing shortages.

A government agency's policy states that board members' travel and hospitality expenses must be audited annually. Which of following people or groups is most appropriate to perform this audit?

A. The government's independent auditor.

B. The external auditors from an accounting firm.

C. The internal audit activity.

D. The agency's chief compliance officer.

The audit committee is concerned that the small size of the internal audit activity (IAA) makes it impractical to achieve full conformance with the Standards. To address this concern, which of the following actions is most appropriate for the CAE to take?

A. The CAE should agree with the audit committee and implement only those standards appropriate to the size of the IAA.

B. The CAE should request the audit committee to review the Standards to identify specifically which are creating the greatest concern.

C. The CAE should seek sufficient funding to increase audit resources to meet the minimum requirements of the Standards.

D. The CAE should explain that conformance with the Standards is essential and not dependent upon the size of the IAA.

Which of the following audit techniques is used to evaluate control design while also embodying auditing's analytical process?

A. A risk and control matrix.

B. A flowchart.

C. A walk-through.

D. A process narrative.

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 sharing to reduction.

B. From acceptance to reduction.

C. From sharing to avoidance.

D. From acceptance to avoidance.

Which of the following is most likely to enhance an internal auditor's objectivity?

A. An auditor is appropriately able to communicate results.

B. An auditor performs his work free from interference.

C. An auditor is unrestricted in determination of scope.

D. An auditor avoids conflicts of interest.

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

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

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

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

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