CIA Governance & Corporate Structure 2

Question 1

The concept of 'tone at the top' in corporate governance refers to:

Accepted Answer

The ethical climate and commitment to integrity demonstrated by senior leadership

Answer

The highest salary band in the organization

Answer

The top-tier risk categories identified during an audit

Answer

The first section of the annual report filed with regulators

Question 2

According to IIA Standards, organizational independence for the internal audit function is achieved when the CAE reports to a level that allows the function to:

Accepted Answer

Fulfill its responsibilities without interference

Answer

Maximize the number of audits completed per year

Answer

Report directly to the external auditors

Answer

Operate without a formal charter

Question 3

Which of the following best describes dual reporting for the Chief Audit Executive?

Accepted Answer

The CAE has administrative reporting to management and functional reporting to the board/audit committee

Answer

The CAE reports to two external audit firms simultaneously

Answer

The CAE submits reports in both written and oral formats

Answer

The CAE reports to both the CFO and the CEO

Question 4

The audit committee's oversight responsibilities typically include all of the following EXCEPT:

Accepted Answer

Setting executive compensation packages

Answer

Reviewing and approving the internal audit plan

Answer

Overseeing the external auditor relationship

Answer

Monitoring the effectiveness of internal controls

Question 5

Under the IIA's International Professional Practices Framework (IPPF), which document establishes the purpose, authority, and responsibility of the internal audit activity?

Accepted Answer

The internal audit charter

Answer

The annual audit report

Answer

The risk assessment matrix

Answer

The engagement work program

Question 6

A board of directors fulfills its governance responsibilities primarily through which of the following activities?

Accepted Answer

Setting strategic direction, overseeing management, and ensuring accountability

Answer

Managing day-to-day operations and approving all expenditures

Answer

Performing operational audits of business units

Answer

Preparing financial statements for external reporting

Question 7

Which governance principle emphasizes that those making decisions on behalf of the organization must be answerable for their actions and outcomes?

Accepted Answer

Accountability

Answer

Transparency

Answer

Stewardship

Answer

Sustainability