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NEW QUESTION # 17
Which of the following best demonstrates the authority of the internal audit activity?
- A. Determining the scope of internal audit services.
- B. Suggesting alternatives to decision makers.
- C. Achieving engagement objectives.
- D. Improving the integrity of information.
Answer: A
NEW QUESTION # 18
Which of the following scenarios best illustrates a rationalization as the root cause of potential fraud?
- A. 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.
- B. The organization is slowly phasing out three mature products that produce the highest commissions for the sales staff.
- C. The controller at a nationwide manufacturing company recently opted to no longer require two-week mandatory vacations for accounting staff.
- D. Security cameras that monitor cash handling at the register are not functioning.
Answer: C
NEW QUESTION # 19
Which of the following statements is true with regard to conducting an effective quality assurance and improvement program?
- A. Members of the internal audit activity are not permitted to perform quality assessments, as they would not be independent.
- B. Periodic internal assessments provide the most current and independent recommendations for improvement.
- C. The conclusions of periodic internal assessments are intended to assist in achieving conformity to the Standards.
- D. The IIA's Quality Assessment Manual for the Internal Audit Activity must be used as the basis for periodic assessments.
Answer: C
NEW QUESTION # 20
According to IIA guidance, which of the following statements is false regarding continuing professional education for the internal audit activity (IAA)?
- A. Specialized education that meets unique organizational needs cannot qualify as IAA professional development.
- B. Employers are responsible for ensuring that the continuing professional education needs of the IAA are met.
- C. Continuing professional education can be obtained through IAA involvement in research projects.
- D. Completion of self-study courses fulfills IAA continuing professional education requirements.
Answer: B
NEW QUESTION # 21
What is the primary purpose of a fishbone diagram?
- A. To depict the areas of responsibility for departments in an organization.
- B. To identify the possible causes of adverse conditions.
- C. To represent the frequencies of adverse conditions in a given process.
- D. To plan and control complex projects, such as internal audits.
Answer: B
NEW QUESTION # 22
Which of the following factors have the greatest influence on the independence of the internal audit activity?
- A. Quality assessments and cultural biases of the internal audit activity.
- B. Organizational positioning and scope control of the internal audit activity.
- C. Rotational assignments and familiarity of the internal audit activity.
- D. Employee incentives and self review of the internal audit activity.
Answer: B
NEW QUESTION # 23
Which of the following is not a standard technique that the chief audit executive (CAE) would use to provide evidence of supervisory review of working papers?
- A. The CAE prepares a memorandum discussing the results of the working paper review.
- B. The CAE utilizes an external third party to make an objective recommendation after each working paper review.
- C. The CAE initials and dates every working paper after it has been reviewed.
- D. The CAE completes an engagement working paper checklist.
Answer: B
NEW QUESTION # 24
Which of the following is the best way to detect fraud?
- A. Implement process controls.
- B. Conduct anti-fraud training.
- C. Activate a whistleblower hotline.
- D. Perform background investigations.
Answer: C
NEW QUESTION # 25
This chief audit executive (CAE) engaged an internal auditor to consult on an organization's complex information technology system. Shortly after beginning the engagement, the auditor unexpectedly resigned.
Unfortunately, this auditor was the only available auditor with the necessary expertise. The CAE will not be able to hire someone with similar expertise in time to meet a regulatory deadline.
Which of the following would be the best course of action for the CAE to take?
- A. Delay the engagement and inform the board of the situation, asking them to provide acceptable alternatives for completing the engagement.
- B. Remove the planned engagement from the audit plan and explain to senior management the problems with moving forward without an auditor with the necessary expertise.
- C. Continue with the engagement in order to meet the regulatory deadline, but highlight areas in the final report that might need to be revised in the future.
- D. Ask that a senior member of the organization's IT department with the required systems expertise join the audit team to assist in completing the engagement.
Answer: A
NEW QUESTION # 26
Which two of the following are preventive controls in a check disbursement process?
1. Daily reconciliation of the bank account used for check disbursements and prompt follow-up of un-reconciled items.
2. Segregation of the following duties: establishing new vendors, approving checks, and reconciling the bank account.
3. An activity report detailing who accesses the check disbursement system and the nature of any action taken in the system.
4. Evidence of strong access controls ensuring that authorized individuals have access only to the functions related to their responsibilities.
- A. 1 and 4.
- B. 1 and 3.
- C. 2 and 3.
- D. 2 and 4.
Answer: D
NEW QUESTION # 27
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. Information and communication.
- B. Objective setting.
- C. Event identification.
- D. Control activities.
Answer: D
NEW QUESTION # 28
Which of the following statements is true regarding the use of non-statistical sampling in auditing control tests?
- A. It considers tolerable deviation rate more effectively than does statistical sampling.
- B. Non-statistical sample results must be projected to the population.
- C. Lesser evidence is required to support a conclusion than for statistical sampling.
- D. Sampling risk will be accurately quantified through non-statistical sampling.
Answer: B
NEW QUESTION # 29
According to IIA guidance, which of the following should be included in the internal audit charter?
- A. Assigned responsibilities for designing and implementing controls.
- B. Identification of the organizational units where engagements are to be performed.
- C. The minimum resources and competencies needed for the internal audit activity.
- D. Organizational relationships and reporting lines.
Answer: D
NEW QUESTION # 30
Which of the following is not an appropriate activity for internal auditors to perform?
- A. Recommend management seek a consulting firm to advise on outsourcing.
- B. Implement solutions for specific organizational problems.
- C. Accumulate data, obtain varying views, and report information to senior management.
- D. Highlight matters that require management's attention.
Answer: B
NEW QUESTION # 31
A candidate has applied for an entry level internal audit position. The candidate holds a CISA (Certified Information Systems Auditor) designation, and has six months of audit experience, but limited knowledge of accounting principles and techniques. According to the IIA guidance, which of the following is the most relevant reason for the chief audit executive to consider this candidate?
- A. Accounting skills can be learned over time with appropriate training.
- B. Other internal auditors possess sufficient knowledge of accounting principles and techniques.
- C. The candidate's information systems knowledge and real-world experience in internal auditing.
- D. An entry level position does not require expertise in any particular area.
Answer: C
NEW QUESTION # 32
Which of the following responsibilities would fall under the role of the chief audit executive, rather than internal audit staff or the audit manager?
- A. Manage and support a quality assurance and improvement program.
- B. Apply problem-solving techniques for routine situations.
- C. Maintain industry-specific knowledge appropriate to the audit engagements
- D. Set clear performance standards for internal auditors and the internal audit activity.
Answer: D
NEW QUESTION # 33
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. Individual proficiency.
- C. Due professional care.
- D. Professional objectivity.
Answer: D
NEW QUESTION # 34
During an account receivables audit, an internal auditor found a significant number of input errors resulting in a $500, 000 balance understatement.
Which of the following is the most important question the internal auditor should ask to develop an appropriate recommendation for this finding?
- A. When?
- B. How?
- C. Why?
- D. Who?
Answer: C
NEW QUESTION # 35
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IIA-CRMA (Certification in Risk Management Assurance) is a certification exam offered by the Institute of Internal Auditors (IIA). Certification in Risk Management Assurance (CRMA) Exam certification is designed for individuals who want to demonstrate their knowledge and expertise in risk management assurance. The IIA-CRMA exam covers a wide range of topics related to risk management, including risk assessment, risk response, risk monitoring, and risk reporting.
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