CIA Governance & Corporate Structure

Question 1

According to the IIA Standards, the Chief Audit Executive (CAE) should report functionally to which body to ensure organizational independence?

Accepted Answer

The Board or Audit Committee

Answer

The Chief Financial Officer

Answer

The Chief Executive Officer

Answer

The External Auditor

Question 2

The Three Lines of Defense model assigns internal audit to which line?

Accepted Answer

Third line

Answer

First line

Answer

Second line

Answer

Fourth line

Question 3

Which committee of the board of directors bears primary responsibility for overseeing the internal audit function?

Accepted Answer

Audit Committee

Answer

Compensation Committee

Answer

Nominating Committee

Answer

Risk Committee

Question 4

Under the Sarbanes-Oxley Act Section 301, audit committee members must be:

Accepted Answer

Independent directors with no material relationship to the company

Answer

Employed by the company for at least two years

Answer

Certified Public Accountants

Answer

Appointed by the CEO

Question 5

An internal audit charter must be approved by:

Accepted Answer

The Board or its delegated audit committee

Answer

The Chief Financial Officer only

Answer

The senior management team collectively

Answer

The external auditors

Question 6

Corporate governance is best described as:

Accepted Answer

The system of rules, practices, and processes by which a company is directed and controlled

Answer

The process of preparing financial statements for shareholders

Answer

The internal audit methodology used to assess operational risks

Answer

The regulatory filing requirements imposed by the SEC

Question 7

Which COSO component focuses on the attitudes and actions of leadership that set the ethical tone for an organization?

Accepted Answer

Control Environment

Answer

Risk Assessment

Answer

Control Activities

Answer

Monitoring Activities