FREE CRMA Basic Questions and Answers

An internal auditor must suggest a policy aspect to be included in an organization's code of ethics. Which of the suggestions below would be the most effective?

Whistleblowing should be discouraged since it might create distrust among staff.

Ethical behavior should be included in performance evaluations.

Senior management should be given explicit exclusions from the code of ethics.

Ethics should differ according to local cultures in the organization's international activities.

Correct! Wrong!

Which of the following forms of fraud involves embezzlement?

Misappropriation of assets

Corruption

Fraudulent statements

Bribery

Correct! Wrong!

Which of these scenarios is an example of risk management avoidance action?

Getting product insurance

Exiting a marketplace

Outsourcing production

Recalling a product

Correct! Wrong!

Which of the following assertions, according to IIA advice, illustrates the similarities between assurance and consulting services?

Internal auditors shall not give assurance or consulting services for an activity for which they were responsible in the previous year.

Both assurance and consulting services often include the internal auditor, the area being reviewed, senior management, and the board.

Internal auditors establish the engagement objectives, scope, and work plan for assurance and consulting services.

Internal auditors must organize assurance and consulting engagements with the strategy and objectives of the activity under evaluation in mind.

Correct! Wrong!

What is the main use of a fishbone diagram?

To determine the potential causes of adverse circumstances.

To express the frequency of adverse circumstances in a certain process.

To represent the areas of responsibility for departments within an organization.

To design and manage difficult tasks like internal audits.

Correct! Wrong!

In which circumstance would a customer care hotline get a large amount of complaints about payments not applied to customers' accounts?

The customer service department does not convey concerns to the accounts receivable department.

Employees are filling out false expense reports.

A worker is tampering with customer checks.

Invoices are not being mailed to customers.

Correct! Wrong!

Which of the following would be the most helpful to a chief audit executive who is determining internal audit workforce requirements?

Discussions with top management and the audit committee on audit needs yielded results.

The most recent performance reviews conducted by the audit staff.

A check of audit personnel's education and training records.

Information on the size and makeup of comparable audit teams.

Correct! Wrong!

A manufacturing line supervisor joins the internal audit activity for a two-year cycle and is assigned to an accounts receivable audit. Which of the following should be the audit manager's major priority when working on this assignment?

Individual objectivity

Organizational independence

Individual independence

Due professional care

Correct! Wrong!

A snow removal firm is running a scenario planning exercise in which staff analyze the potential consequences of a major drop in annual snowfall for the upcoming winter. Which of the following accurately characterizes this sort of risk?

Accepted

Residual

Inherent

Net

Correct! Wrong!

Which of the following procedures would help an internal auditor evaluate the effectiveness of a wholesale food distributor's process for filling and packaging orders for shipping?

Decision trees compare actual performance to requirements.

A chart outlining program assessment and review techniques.

Queuing theory is used to identify possible bottlenecks in the process.

A Bedford review of orders filled and typical delivery times.

Correct! Wrong!

An internal auditor evaluates management's risk-mitigation procedures within a certain product division. Which of the following is an illustration of risk reduction?

Management adjusts the product division to reduce faults.

Management sells its product division to a rival.

Management permits the product division to remain unaltered.

Management sells the product line to a rival.

Correct! Wrong!