IIA Certification in Risk Management Assurance : IIA-CRMA-ADV

Upon joining the internal audit activity, each new auditor receives a copy of the audit handbook. Which of the following handbook policies has the greatest risk of compromising audit objectivity?

• A. Internal auditors should undergo annual performance appraisals conducted by the chief audit executive, who reports administratively to the chief financial officer.
• B. Internal auditors should have direct and unrestricted access to personnel and information throughout the organization and the governing board.
• C. Internal auditors should rotate to other areas of the organization for nonaudit assignments to gain an understanding of the organization's operations.
• D. Internal auditors should obtain 80 hours of continuing professional education every two years, 20 of which should be audit-related, and the remainder may be operations-related.

An internal audit activity includes in its audit reports the assertion that its work is performed in conformance with the International Standards for the Professional Practice of Internal Auditing {Standards). A recent external quality assessment concluded that the internal audit activity had substantial deficiencies that impact its overall operations. According to IIA guidance, which of the following is the most appropriate action for issuing future audit reports?

• A. Refrain from indicating that the internal audit activity operates in conformance with the Standards until the chief audit executive confirms that the internal audit activity has addressed all areas of nonconformance and the audit committee has been notified.
• B. Update and reissue previous audit reports, removing the assertion that the internal audit activity operates in conformance with the Standards, and distribute them to all parties who received the original reports.
• C. Indicate that the internal audit activity operates in partial conformance with the Standards, as the internal audit activity has a quality assurance and improvement program in place to address deficiencies and has met the requirement for conducting an external assessment.
• D. Refrain from indicating that the internal audit activity operates in conformance with the Standards until another external assessment confirms that the significant areas of nonconformance have been addressed.

Which of the following statements is true with regard to conducting an effective quality assurance and improvement program?

• A. The IIA's Quality Assessment Manual for the Internal Audit Activity must be used as the basis for periodic assessments.
• B. Periodic internal assessments provide the most current and independent recommendations for improvement.
• C. Members of the internal audit activity are not permitted to perform quality assessments, as they would not be independent.
• D. The conclusions of periodic internal assessments are intended to assist in achieving conformity to the Standards.

An internal auditor is conducting an assessment of the organization's fraud prevention program using the COSO enterprise risk management framework. According to this framework, which of the following activities would fall under the control environment component for preventing fraud?
1. The organization uses an automated authority approval matrix to control payments.
2. The organization has a whistleblower hotline that is available to employees.
3. Annually, every manager completes a comprehensive fraud assessment of his or her department.
4. Annually, the organization reviews and communicates the code of expected behavior.

• A. 2 and 4.
• B. 2 and 3.
• C. 1 and 2.
• D. 1 and 3.

Which of the following are generally recognized as essential elements of a corporate social responsibility program?

• A. Fair operating practices and government regulation.
• B. Organizational governance and financial reporting.
• C. Consumer issues and return on investment.
• D. Human rights and the environment.