IIA-CRMA-ADV by IIA Valid Free Exam Practice Test

Question 1

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 restrictively endorses checks received from customers prepares the bank's check deposit slips. C. The same employee who makes deposits at the bank prepares the monthly bank reconciliation. D. The same employee who receives cash from customers prepares a prelisting of cash receipts.

Correct Answer: C

Question 2

An organization has implemented a new automated payroll system that contains a table of pay rates that are matched to employee job classifications. Which control should an internal auditor suggest in order to ensure that the table is updated correctly, and is used only for valid pay changes?

A. Ensure that adequate edit and reasonableness checks are built into the automated system. B. Require a manager, who is independent of the system and who cannot change the table, to authorize and sign-off on any employee pay changes. C. Require a supervisor in the department, who has the ability to change the table, to compare the changes to a signed management authorization. D. Restrict data-table access from management and line supervisors who have the authority to determine pay rates.

Correct Answer: B

Question 3

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

A. A manager has bragged about multiple extravagant vacations taken within the last year, which are excessive relative to the manager's salary. B. Several recent, large expenditures to a new vendor have not been documented. C. New employees occasionally fail to meet established project deadlines due to staffing shortages. D. A weak control environment has been accepted by management to encourage creativity.

Correct Answer: C

Question 4

According to the COSO enterprise risk management (ERM) framework, which of the following is not part of the new paradigm in ERM?

A. Reducing operational surprises and losses. B. Aligning risk appetite and strategy. C. Enhancing risk response decisions. D. Assessing the risk factors.

Correct Answer: D

Question 5

Which of the following is the best way to detect fraud?

A. Implement process controls. B. Conduct anti-fraud training. C. Perform background investigations. D. Activate a whistleblower hotline.

Correct Answer: D

Question 6

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 utilizes an external third party to make an objective recommendation after each working paper review. B. The CAE prepares a memorandum discussing the results of the 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.

Correct Answer: A

Question 7

Management would like to self-assess the overall effectiveness of the controls in place for its 200-person manufacturing department. Which of the following client-facilitated approaches is likely to be the most efficient way to accomplish this objective?

A. Workshops. B. Surveys. C. Interviews. D. Observation.

Correct Answer: B

Question 8

An accounts receivable clerk receives cash payments, posts the payments to customer accounts, and prepares the daily cash deposit.
The clerk has been stealing some cash and manipulating the customer payments to hide the theft.
This fraud could be detected with which of the following controls?

A. Total cash deposits are compared with the bank reconciliation. B. Total cash deposits for the month are reconciled to the cash receipts journal. C. Names, amounts, and dates on remittance advices are reconciled with the names, amounts, and dates recorded in the cash receipts journal. D. Monthly bank reconciliations are performed by the clerk on a timely basis.

Correct Answer: C

Question 9

Faced with a complex, highly technical construction audit engagement, the chief audit executive (CAE) considered complementing the current internal audit resources by engaging the services of a civil engineer.
Which of the following should the CAE consider in determining whether the engineer possesses the necessary skills to perform the engagement?
1. Professional certification, license, or other recognition of the engineer's competence in the relevant discipline.
2. Experience of the engineer in the type of work being considered.
3. Compensation or other incentives that the engineer may receive.
4. The extent of other ongoing services that the engineer may be performing for the organization.

A. 2 and 3 only B. 1, 2, and 4 only C. 3 and 4 only D. 1 and 4 only

Correct Answer: B

Question 10

In the area of business acumen, which of the following competencies would be the sole responsibility of an internal audit staff member?

A. Assessing how IT contributes to organization objectives, risks, and relevance to audit. B. Maintaining industry-specific knowledge appropriate to the organization. C. Maintaining technical aspects of accounting standards and reporting processes. D. Understanding regulatory and legal framework and assessing its relevance.

Correct Answer: D

Question 11

An auditor identifies three errors in the sample of 25 entries selected for review (a 12 percent error rate).
Based on this result, the auditor assumes that approximately 59 of the total population of 492 entries are incorrect. To reach this assumption, the auditor has used a technique known as which of the following?

A. Acceptance sampling. B. Stratification. C. Ratio estimation. D. Variability tolerance.

Correct Answer: C

Question 12

Which of the following is not one of the 10 core competencies identified in the IIA Competency Framework?

A. Business acumen. B. Performance management. C. Governance, risk, and control. D. Internal audit delivery.

Correct Answer: B

Question 13

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. Demonstrated compliance with procedures. B. Due professional care. C. Engagement supervision. D. Employment of tools and techniques.

Correct Answer: C

IIA Certification in Risk Management Assurance - IIA-CRMA-ADV Exam Practice Test