Pass IIA-CRMA Exam Latest Practice Questions Updated on May 09, 2025
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NEW QUESTION # 51
The results of an internal audit activity's (IAA) quality assurance and improvement program are favorable and an external assessment was completed within the last five years. Which of the following statements may the IAA use to describe its work?
- A. "Completed with the advance certification of the External Assessors Association for Auditing Review."
- B. "Compliant with all domestic and international legal statutes, and certified quality assured for ten years."
- C. "Conforms with the International Standards for the Professional Practice of Internal Auditing."
- D. "Certified 100% accuracy, per the International Standards of External Assessment."
Answer: C
NEW QUESTION # 52
Which of the following is the primary engagement responsibility of an entry-level internal auditor?
- A. Leadership.
- B. Documentation.
- C. Analysis.
- D. Reporting.
Answer: C
NEW QUESTION # 53
Which of the following decisions made during the testing phase of a compliance audit requires the most judgment by an internal auditor?
- A. What level of noncompliance is acceptable.
- B. Which fields to examine on each invoice.
- C. Whether an individual expenditure is allowable.
- D. Which sampling methodology to select for testing.
Answer: A
NEW QUESTION # 54
An organization invests its savings in a volatile stock with the potential for high gains rather than a mutual fund with a lower expected return and lower volatility. This best describes which of the following risk concepts?
- A. Risk appetite.
- B. Risk capacity.
- C. Risk tolerance.
- D. Risk identification.
Answer: C
NEW QUESTION # 55
Click the Exhibit.
Internal auditors are asked to keep track of how many hours per day they spend planning the audit, conducting the engagement, and writing the audit report. The data for two days has been collected as follows:
Day 1
Day 2
Planning the audit
2 hours
3 hours
Conducting the engagement
1 hour
1 hour
Writing the audit report
2 hours
4 hours
Which of the following graphs depicts the data accurately?
- A. Graph B only
- B. Both A and B.
- C. Graph A only
- D. Neither A nor B.
Answer: B
NEW QUESTION # 56
Which of the following enhances the independence of the internal audit activity?
- A. The audit committee approves the CAE's annual salary increase.
- B. The CAE administratively reports to the board.
- C. The chief audit executive (CAE) approves the annual internal audit plan.
- D. The chief executive officer approves the internal audit charter.
Answer: A
NEW QUESTION # 57
Internal auditors must exercise due professional care by considering which of the following?
1. Cost of assurance in relation to potential benefits.
2. Adequacy and effectiveness of governance, risk management, and control processes.
3. Management's competency level in the area being evaluated.
4. Probability of significant errors, fraud, or noncompliance.
- A. 1, 2, and 3 only
- B. 2, 3, and 4 only
- C. 1 and 2 only
- D. 1, 2, and 4 only
Answer: D
NEW QUESTION # 58
During an account receivables audit, an internal auditor found a significant number of input errors resulting in a $500, 000 balance understatement.
Which of the following is the most important question the internal auditor should ask to develop an appropriate recommendation for this finding?
- A. Why?
- B. How?
- C. When?
- D. Who?
Answer: A
NEW QUESTION # 59
Which of the following is not one of the 10 core competencies identified in the IIA Competency Framework?
- A. Internal audit delivery.
- B. Business acumen.
- C. Performance management.
- D. Governance, risk, and control.
Answer: C
NEW QUESTION # 60
Which of the following is most likely to enhance an internal auditor's objectivity?
- A. An auditor is appropriately able to communicate results.
- B. An auditor performs his work free from interference.
- C. An auditor avoids conflicts of interest.
- D. An auditor is unrestricted in determination of scope.
Answer: C
NEW QUESTION # 61
Which of the following best describes the assessment of risks?
- A. Assess the actions necessary to reduce the likelihood and/or impact of risk to tolerable levels.
- B. Assess alternative strategies to reduce or eliminate major risks.
- C. Assess the likelihood and/or impact of risk on the achievement of organizational objectives.
- D. Assess the amount of risk an organization can accept while pursuing its objectives.
Answer: C
NEW QUESTION # 62
Sometimes, internal audit staff may partner with operating managers to rank risks. Which of the following outcomes may be the most beneficial aspects of this strategy?
1. Reappraising risks levels.
2. Providing accurate information to management.
3. Marketing the internal audit activity.
4. Planning safeguards for assets in high-risk areas.
- A. 3 and 4.
- B. 2 and 3.
- C. 1 and 2.
- D. 1 and 3.
Answer: D
NEW QUESTION # 63
Faced with a complex, highly technical construction audit engagement, the chief audit executive (CAE) considered complementing the current internal audit resources by engaging the services of a civil engineer.
Which of the following should the CAE consider in determining whether the engineer possesses the necessary skills to perform the engagement?
1. Professional certification, license, or other recognition of the engineer's competence in the relevant discipline.
2. Experience of the engineer in the type of work being considered.
3. Compensation or other incentives that the engineer may receive.
4. The extent of other ongoing services that the engineer may be performing for the organization.
- A. 3 and 4 only
- B. 1 and 4 only
- C. 2 and 3 only
- D. 1, 2, and 4 only
Answer: D
NEW QUESTION # 64
An organization is facing a financial downturn and needs to impose major budget reductions to all departments. According to MA guidance, which of the following actions is most appropriate for the board to take to evaluate the potential impact on the internal audit activity?
- A. Ask the chief audit executive to determine whether budgetary limitations impede the ability of the internal audit activity to execute its responsibilities.
- B. Ask appropriate stakeholders for their opinion on the potential impacts of reducing the scope of the internal audit plan.
- C. Ask management to determine which internal audit engagements are lower risk and could be considered for removal from the annual audit plan.
- D. Ask The human resources department to determine how the annual compensation and salary of the audit staff could be adjusted to achieve savings.
Answer: A
NEW QUESTION # 65
Given the highly technical and legal nature of privacy issues, which of the following statements best describes the internal audit activity's responsibility with regard to assessing an organization's privacy framework?
- A. The internal audit activity may delegate to nonaudit IT specialists the responsibility of determining whether personal information has been secured adequately and data protection controls are sufficient.
- B. Because the audit committee is ultimately responsible for ensuring that appropriate control processes are in place to mitigate risks associated with personal information, the internal audit activity is C. required to conduct privacy assessments.
- C. If an organization does not have a mature privacy framework, the internal audit activity should assist in developing and implementing an appropriate privacy framework.
- D. The internal audit activity should have appropriate knowledge and competence to conduct an asses .......framework.
Answer: D
NEW QUESTION # 66
An internal auditor makes a series of observations when performing an analytical review of division operations. The auditor notes the following things: the current ratio is increasing and the quick ratio is decreasing, sales and current liabilities have remained constant, and the number of day sales in inventory is increasing. Which conclusion should the auditor draw from this data?
- A. The division produced fewer items this year than in prior years.
- B. Cash or accounts receivable has decreased.
- C. The gross margin has increased.
- D. The gross margin has decreased.
Answer: B
NEW QUESTION # 67
An assurance mapping exercise helps an organization do which of the following?
1. Provide assurance to stakeholders that risks are managed and reported, and regulatory and legal obligations are met.
2. Fulfill best practices in the industry.
3. Identify and address any gaps in the risk management process.
4. Identify fraud.
- A. 3 and 4.
- B. 2 and 3.
- C. 1 and 4.
- D. 1 and 3.
Answer: D
NEW QUESTION # 68
Which of the following scenarios exemplifies a potential internal control weakness?
- A. The same employee who receives cash from customers prepares a prelisting of cash receipts.
- B. The same employee who makes deposits at the bank prepares the monthly bank reconciliation.
- C. The same employee who records cash receipts in the accounts receivable subsidiary ledger ensures that the ledger automatically updates the information.
- D. The same employee who restrictively endorses checks received from customers prepares the bank's check deposit slips.
Answer: B
NEW QUESTION # 69
In which of the following functions would fraud be most likely to occur?
- A. Approving changes to employee records.
- B. Collecting payments on accounts.
- C. Preparing customer statements.
- D. Maintaining custody of inventory records.
Answer: B
NEW QUESTION # 70
Which of the following is most likely to be considered a control weakness?
- A. Vendor invoice payment requests are accompanied by a purchase order and receiving report.
- B. Department managers initiate purchase requests that must be approved by the plant superintendent.
- C. Purchase orders are typed by the purchasing department using prenumbered forms.
- D. Buyers promptly update the official vendor listing as new supplier sources become known.
Answer: D
NEW QUESTION # 71
According to IIA guidance, which of the following are macro-level audit activities performed for an assurance engagement of the purchasing department?
1. Obtain and review all purchasing-related audit reports issued within the past year.
2. Meet with the quality assurance group to discuss its previous reports of any purchasing-related findings.
3. Review a memo written by the purchasing manager that outlines ongoing problems with the purchasing software.
4. Request a copy of the report from a purchasing audit conducted last year by an external service provider.
- A. 3 and 4.
- B. 1 and 3.
- C. 1 and 2.
- D. 2 and 4.
Answer: C
NEW QUESTION # 72
According to the COSO enterprise risk management (ERM) framework, which of the following is not part of the new paradigm in ERM?
- A. Reducing operational surprises and losses.
- B. Assessing the risk factors.
- C. Aligning risk appetite and strategy.
- D. Enhancing risk response decisions.
Answer: B
NEW QUESTION # 73
What is the primary benefit to the internal audit activity for undertaking an internal quality assessment?
- A. To help improve the overall quality of the internal audit activity's work.
- B. To help the internal audit activity complete its annual assurance plan.
- C. To identify key risks and areas of concern within the organization.
- D. To identify inefficiencies within the internal audit team.
Answer: A
NEW QUESTION # 74
An internal audit manager of a furniture manufacturing organization is planning an audit of the procurement process for kiln-dried wood. The procurement department maintains six procurement officers to manage 24 different suppliers used by the organization.
Which of the following controls would best mitigate the risk of employees receiving kickbacks from suppliers?
- A. The periodic rotation of procurement officers' assignments to supplier accounts.
- B. Periodic inventories of kiln-dried wood at the organization's warehouse.
- C. A pre-award financial capacity analysis of suppliers.
- D. An automated computer report, organized by supplier, of any invoices for the same amount.
Answer: A
NEW QUESTION # 75
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