CRMA - Certification in Risk Management Assurance Internal Audit's Consulting Role Questions and Answers

Question 1

Management has requested that the internal audit activity design the internal control procedures for a new payroll system and then lead the implementation project.
Which of the following is the most significant risk the Chief Audit Executive (CAE) must consider before accepting this dual role?

Accepted Answer

Accepting management's responsibility for implementation will impair internal audit's objectivity for future assurance reviews of the system.

Answer

The engagement may require specialized IT skills not present in the internal audit team.

Answer

Performing both design and implementation falls outside the scope of a typical internal audit charter.

Answer

The time required for the project will negatively impact the completion of the annual audit plan.

Question 2

According to The IIA's International Professional Practices Framework (IPPF), what is the primary objective of an internal audit consulting engagement?

Accepted Answer

To add value and improve an organization's governance, risk management, and control processes.

Answer

To provide an independent, objective opinion on the effectiveness of risk management processes.

Answer

To identify all instances of non-compliance and report them directly to the audit committee.

Answer

To perform operational duties for a department on a temporary basis to fill a resource gap.

Question 3

Six months ago, an internal auditor provided consulting services by advising on the development of a new travel and expense reimbursement process. The Chief Audit Executive (CAE) now needs to schedule an assurance review of this new process. According to IIA Standard 1130.A1, what is the presumed status of the auditor's objectivity?

Accepted Answer

Objectivity is presumed to be impaired.

Answer

Objectivity is enhanced because the auditor has deep knowledge of the process.

Answer

Objectivity is not affected as long as the consulting engagement was properly documented.

Answer

Objectivity can be assumed if the auditor signs a statement of impartiality before the new engagement.

Question 4

Which of the following activities is the most appropriate example of an internal audit consulting engagement?

Accepted Answer

Facilitating a management workshop to identify risks associated with a new product launch.

Answer

Performing the monthly reconciliation of key general ledger accounts to ensure accuracy.

Answer

Issuing a formal audit opinion on the adequacy of the company's cybersecurity framework.

Answer

Taking over the daily approval of procurement orders while the department manager is on extended leave.

Question 5

Which statement best describes a key distinction between internal audit's assurance and consulting services?

Accepted Answer

Assurance engagements typically involve three parties, whereas consulting engagements generally involve two.

Answer

Objectivity is required for assurance services but is optional for consulting services.

Answer

Consulting engagements do not require a documented scope, whereas assurance engagements do.

Answer

Only assurance engagement results are communicated to the board and senior management.

Question 6

Before accepting a significant consulting engagement that was not included in the annual audit plan, IIA Standard 2201.C1 requires the internal auditor to:

Accepted Answer

Establish a written understanding with the client regarding objectives, scope, and responsibilities.

Answer

Obtain formal approval from the external auditors to ensure coordination.

Answer

Guarantee that the engagement will result in a positive financial outcome for the organization.

Answer

Secure a budget increase to cover the additional resources required for the engagement.