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IIA Certification in Risk Management Assurance Sample Questions:

1. When auditing the award of a major contract, which of the following should an internal auditor suspect as a red flag for a bidding fraud scheme?
1. Subsequent change orders increase requirements for low-bid items.
2. Material contract requirements are different on the actual contract than on the request for bids.
3. A high percentage of employees are charged to indirect accounts.
4. Losing bidders are hired as subcontractors.

A) 2 only
B) 2 and 4.
C) 1 and 3.
D) 1 only

2. Management of a publicly-held organization requires the internal audit activity to be involved with quarterly financial statements, which are made public and used internally. Which of the following explanations of management's decision is least plausible?

A) Management may perceive that having quarterly financial information examined by the internal auditors enhances the information's value to internal decision making.
B) Management may be concerned about potential penalties that could occur if quarterly financial statements are misstated.
C) Management is following best-practice protocol, as stipulated by the Standards, which states that internal auditors must review quarterly financial statements.
D) Management may be concerned about its reputation in the financial markets.

3. According to COSO, which of the following is not considered one of the components of an organization's internal environment?

A) Integrated responses to multiple risks.
B) Framework to plan, execute and monitor activities.
C) Knowledge and skills needed to perform activities.
D) Authority and responsibility to resolve issues.

4. Suspecting fraud, the chief financial officer (CFO) asked the internal audit activity to investigate a significant increase in travel related expenditures. Work was performed by a qualified internal auditor. Following the completion of the engagement, the chief audit executive (CAE) reported to the CFO that no violations were found and no fraud had occurred.
According to the Standards, which of the following principles did the CAE violate?

A) Due professional care.
B) Proficiency.
C) Individual objectivity.
D) Organizational independence.

5. In which of the following scenarios would the chief audit executive (CAE) be required to decline the assignment?

A) The CAE would need to procure external services to deliver the internal audit assurance program.
B) There is no expertise within the internal audit team for auditing an IT engagement.
C) There is no expertise within the internal audit team for detecting and investigating fraud.
D) There is no available expertise on the internal audit team to perform a consulting engagement.

Solutions: