[Aug-2021] Updated CRMA Certification IIA-CRMA Exam Questions BUNDLE PACK
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NEW QUESTION 134
According to IIA guidance, which of the following scenarios demonstrates an internal auditor exercising due professional care?
When auditing investments, the auditor identified instruments with which he was unfamiliar.
- A. He decided not to select that type of investment in his sample, as he did not have the knowledge needed to perform a proper assessment.
- B. An auditor visited a plant that produces a significant portion of the organization's inventory. The day he arrived, the plant manager was out sick, so the auditor issued the report without interviewing the manager.
- C. An auditor was reviewing inventory counts conducted by the warehouse staff. One truck containing an immaterial amount of inventory was off-site and wasn't verified by the auditor.
- D. An auditor in charge needed to have testing completed by the end of the month, but was behind schedule. He identified a junior auditor to conduct the work for him on a complex area of the organization.
Answer: A
NEW QUESTION 135
According to the IIA guidance, who is responsible for periodically assessing the internal audit activity?
- A. The board.
- B. Senior management.
- C. The chief audit executive.
- D. The external auditors.
Answer: C
NEW QUESTION 136
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. Objective setting.
- B. Event identification.
- C. Information and communication.
- D. Control activities.
Answer: D
NEW QUESTION 137
A new director was hired to lead the internal audit activity at a small start-up company. Which of the following assignments would impair the director's independence?
- A. Performing a pre-implementation review of the company's payroll application.
- B. Reviewing the company's policy for foreign currency translation adjustments for compliance with accounting standards.
- C. Preparing the financial statements for the company's defined contribution plan.
- D. Providing the COBIT framework as a possible IT management tool.
Answer: C
NEW QUESTION 138
Which of the following must be in existence as a precondition to developing an effective system of internal controls?
- A. A risk assessment process.
- B. A strategic objective-setting process.
- C. An information and communication process.
- D. A monitoring process.
Answer: A
NEW QUESTION 139
According to IIA guidance, which of the following must internal auditors consider to conform with the requirements for due professional care during a consulting engagement?
1. The cost of the engagement, as it pertains to audit time and expenses in relation to the potential benefits.
2. The needs and expectation of clients, including the nature, timing, and communication of engagement results.
3. The application of technology-based audit and other data analysis techniques, where appropriate.
4. The relative complexity and extent of work needed to achieve the engagement's objectives.
- A. 1, 2, and 3
- B. 1, 2, and 4
- C. 1, 3, and 4
- D. 2, 3, and 4
Answer: B
NEW QUESTION 140
Which of the following describes a key characteristic related to effective organizational communication?
- A. Unique operating environments with varying complexity.
- B. A culture of integrity and transparency.
- C. A well-designed system of internal controls.
- D. Comprehensive supervisory and verification procedures.
Answer: C
NEW QUESTION 141
The results of an internal audit activity's (IAA) quality assurance and improvement program are favorable and an external assessment was completed within the last five years. Which of the following statements may the IAA use to describe its work?
- A. "Compliant with all domestic and international legal statutes, and certified quality assured for ten years."
- B. "Conforms with the International Standards for the Professional Practice of Internal Auditing."
- C. "Completed with the advance certification of the External Assessors Association for Auditing Review."
- D. "Certified 100% accuracy, per the International Standards of External Assessment."
Answer: B
NEW QUESTION 142
A medical insurance provider uses an electronic claims-submission process and suspects that a number of physicians have submitted claims for treatments that were not performed. Which of the following control procedures would be most effective to detect this type of fraud?
- A. Develop an integrated test facility and submit false claims to verify that the system is detecting such claims on a consistent basis.
- B. Use computer software to identify abnormal claims based on the insured's age and medical history.
- C. Require the physician to submit a signed statement attesting that the treatments had been performed.
- D. Send confirmations to the physicians, requesting them to verify the exact nature of the claims submitted to the insurance provider.
Answer: B
NEW QUESTION 143
A chief audit executive (CAE) learns that the brother-in-law of a senior auditor who audits the procurement process was hired as the head of the procurement department six months prior. Which of the following is the most appropriate action for the CAE to take?
- A. The CAE should change the senior auditor's assignment and take corrective action for the auditor's failure to disclose the conflict of interest.
- B. The CAE should remind the senior auditor of his obligation to be objective and impartial.
- C. The CAE should require the senior auditor to disclose the relationship in writing before continuing his responsibility for monitoring procurement.
- D. The CAE should not interfere because there is no evidence that a conflict of interest has occurred.
Answer: A
NEW QUESTION 144
According to the COSO internal control framework, which of the following best describes the use of continuous auditing programs by the internal audit activity?
- A. Control environment.
- B. Control activities.
- C. Risk assessment.
- D. Monitoring.
Answer: D
NEW QUESTION 145
An organization is facing a financial downturn and needs to impose major budget reductions to all departments. According to MA guidance, which of the following actions is most appropriate for the board to take to evaluate the potential impact on the internal audit activity?
- A. Ask the chief audit executive to determine whether budgetary limitations impede the ability of the internal audit activity to execute its responsibilities.
- B. Ask management to determine which internal audit engagements are lower risk and could be considered for removal from the annual audit plan.
- C. Ask The human resources department to determine how the annual compensation and salary of the audit staff could be adjusted to achieve savings.
- D. Ask appropriate stakeholders for their opinion on the potential impacts of reducing the scope of the internal audit plan.
Answer: A
NEW QUESTION 146
The last quality assessment of the internal audit activity identified three areas for improvement: the achievement of audit engagement objectives, quality of work, and staff development. According to IIA guidance, which of the following should be the chief audit executive's primary focus to achieve these recommended improvements?
- A. Employment of tools and techniques.
- B. Engagement supervision.
- C. Due professional care.
- D. Demonstrated compliance with procedures.
Answer: B
NEW QUESTION 147
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 is required to demonstrate that effective engagement supervision has occurred.
- B. It helps ensure that appropriate professional judgments and conclusions are made.
- C. It increases the likelihood of obtaining the audit client's agreement with the results.
- D. It ensures that an appropriate chain of evidence is maintained through the workpapers.
Answer: B
NEW QUESTION 148
An IT contractor applied for an internal audit position at a bank. The contractor worked for the bank's IT security manager two years ago. If the audit manager interviewed the contractor and wants to extend a job offer, which of the following actions should the chief audit executive pursue?
- A. Allow the audit manager to hire the contractor, but state that the individual is not allowed to work on IT security audits for one year.
- B. Allow the audit manager to hire the contractor and state that the individual is free to perform IT audits, including security.
- C. Not allow the audit manager to hire the contractor, as it would be a conflict of interest.
- D. Not allow the audit manager to hire the contractor and ask the individual to apply again in one year.
Answer: B
NEW QUESTION 149
Which of the following conditions is the most likely indicator of fraud?
- A. Commissions are paid based on verified increases to sales.
- B. Departmental reports are consistently issued in an untimely manner.
- C. Lower earnings occur during the industry's down cycle.
- D. A manager regularly assumes subordinates' duties.
Answer: D
NEW QUESTION 150
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. Employing audit tests to detect fraud.
- C. Completing a process review to improve controls to prevent fraud.
- D. Planning an engagement of the area in which fraud is suspected.
Answer: B
NEW QUESTION 151
Which of the following best describes the assessment of risks?
- A. Assess the actions necessary to reduce the likelihood and/or impact of risk to tolerable levels.
- B. Assess the amount of risk an organization can accept while pursuing its objectives.
- C. Assess alternative strategies to reduce or eliminate major risks.
- D. Assess the likelihood and/or impact of risk on the achievement of organizational objectives.
Answer: D
NEW QUESTION 152
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