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NEW QUESTION 178
Which of the following is an appropriate responsibility for the internal audit activity with regard to the organization's risk management program?
- A. Identifying and ensuring that appropriate controls exist to mitigate risks.
- B. Identifying and managing risks in line with the entity's risk appetite.
- C. Ensuring that a proper and effective risk management process exists.
- D. Attaining an adequate understanding of the entity's key mitigation strategies.
Answer: D
NEW QUESTION 179
According to IIA guidance, which of the following external groups is most likely to represent a liability risk, based on activities associated with the organization's corporate social responsibility program?
- A. Activists.
- B. Consumers.
- C. Suppliers.
- D. Investors.
Answer: A
NEW QUESTION 180
When developing the organization's first risk universe, which of the following would the chief audit executive be least likely to consider?
- A. The amount of risk that an organization is willing to seek or accept.
- B. The exposure to risks following management's risk responses.
- C. The extent and degree of interdependency for identified key risks.
- D. The boundaries established to manage the amount of risk taken.
Answer: B
NEW QUESTION 181
Which of the following should be included in a privacy audit engagement?
1. Assess the appropriateness of the information gathered.
2. Review the methods used to collect information.
3. Consider whether the information collected is in compliance with applicable laws.
4. Determine how the information is stored.
- A. 1, 2, 3, and 4
- B. 2 and 4 only
- C. 1 and 3 only
- D. 1, 3, and 4 only
Answer: A
NEW QUESTION 182
Which of the following must be adjusted to index a progressive tax system to inflation?
- A. Tax brackets, tax deductions, and tax payments.
- B. Tax deductions, exemptions, and tax filings.
- C. Tax brackets, exemptions, and nominal tax receipts.
- D. Tax deductions, exemptions, and tax brackets.
Answer: D
NEW QUESTION 183
According to IIA guidance, which of the following is least compliant with the requirements regarding an internal auditor's need for objectivity?
- A. An internal auditor participated in an audit of controls around absenteeism, despite providing some consultation on controls in this area earlier in the year.
- B. An internal auditor, previously employed in the quality assurance operations area, performed a consulting engagement for the operations manager.
- C. An internal auditor performed an assurance engagement for the effectiveness of accounts payable access controls, one of which he previously helped to design.
- D. An internal auditor assessed the effectiveness of controls over payroll software, which he had helped implement with a previous employer.
Answer: C
NEW QUESTION 184
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 185
An employee in the sales department completes a purchase requisition and forwards it to the purchaser. The purchaser places competitive bids and orders the requested items using approved purchase orders. When the employee receives the ordered items, she forwards the packing slips to the accounts payable department. The invoice for the ordered items is sent directly to the sales department, and an administrative assistant in the sales department forwards the invoices to the accounts payable department for payment. Which of the following audit steps best addresses the risk of fraud in the cash receipts process?
- A. Observe whether the purchase orders are sequentially numbered.
- B. Determine whether the accounts payable department reconciles all purchasing documents prior to payment.
- C. Verify that approvals of purchasing documents comply with the authority matrix.
- D. Examine whether the sales department supervisor approves invoices for payment.
Answer: D
NEW QUESTION 186
For which of the following fraud engagement activities would it be most appropriate to involve a forensic auditor?
- A. Assessing contracts for relevant terms and conditions.
- B. Performing statistical analysis for data anomalies.
- C. Preparing evidentiary documentation.
- D. Independently evaluating conflicts of interests.
Answer: C
NEW QUESTION 187
International marketing activities often begin with:
- A. Global marketing.
- B. Standardization.
- C. Limited exporting.
- D. Domestic marketing.
Answer: C
NEW QUESTION 188
Which of the following best demonstrates an organization's ability to recover from a disaster?
- A. Regular testing of the disaster plan
- B. Hot site
- C. Cold site
- D. Redundant data center
Answer: A
NEW QUESTION 189
During the last year, an organization had an opening inventory of $300,000, purchases of $980,000, sales of
$1,850,000, and a gross margin of 40 percent. What is the closing inventory if the periodic inventory system is used?
- A. $280,000
- B. $170,000
- C. $300,000
- D. $540,000
Answer: B
NEW QUESTION 190
According to IIA guidance on IT. which of the following plans would pair the identification of critical business processes with recovery time objectives?
- A. The business case for business continuity planning
- B. The business continuity risk assessment plan
- C. The business impact analysis plan
- D. The business continuity management charter.
Answer: C
NEW QUESTION 191
According to MA guidance on IT. which of the following controls the routing of data packets to link computers?
- A. Control environment.
- B. Operating system.
- C. Application program code.
- D. Network.
Answer: D
NEW QUESTION 192
Which of the following is the first step an internal audit activity should undertake when executing a data analytics process'?
- A. Define the purpose and the anticipated value
- B. Conduct a risk assessment regarding the effectiveness of the data analytics process.
- C. Select data for cleaning and normalization procedures.
- D. Analyze possible and available sources of raw data
Answer: D
NEW QUESTION 193
A credit card company detects potential errors in credit card numbers by checking whether all entered numbers contain the correct amount of digits. This is an example of which of the following IT controls?
- A. Data integrity tests.
- B. Logic test.
- C. Balancing control activities.
- D. Check digits.
Answer: B
NEW QUESTION 194
In mergers and acquisitions, which of the following is an example of a horizontal combination?
- A. Dairy manufacturing company taking over a large dairy farm.
- B. A petroleum processing company acquires an agro-processing firm.
- C. A baker taking over a competitor.
- D. A movie producer acquires movie theaters.
Answer: C
NEW QUESTION 195
Which of the following factors would the auditor in charge be least likely to consider when assigning tasks to audit team members for an engagement?
- A. Whether outside resources will be needed, and their availability.
- B. The amount of experience the auditors have conducting audits in the specific area of the organization.
- C. Whether the budgeted hours are sufficient to complete the audit within the current scope.
- D. The availability of the auditors in relation to the availability of key client staff.
Answer: C
NEW QUESTION 196
According to IIA guidance, which of the following is least likely to be a key financial control in an organization's accounts payable process?
- A. Monitor customer quality complaints compared to the prior period to identify vendor issues.
- B. Compare employee addresses to vendor addresses to identify potential employee fraud.
- C. Require the approval of additions and changes to the vendor master listing, where the inherent risk of false vendors is high.
- D. Monitor amounts paid each period and compare them to the budget to identify potential issues.
Answer: A
NEW QUESTION 197
Which of the following statements regarding program change management is not correct?
- A. The degree of risk associated with a proposed change determines if the change request requires authorization.
- B. The goal of the change management process is to sustain and improve organizational operations.
- C. In order to protect the production environment, changes must be managed in a repeatable, defined, and predictable manner.
- D. All changes should be tested in a non-production environment before migrating to the production environment.
Answer: A
NEW QUESTION 198
An internal auditor performed a review of IT outsourcing and found that the service provider was failing to meet the terms of the service level agreement. Which of the following approaches is most appropriate to address this concern?
- A. The organization should review the skill requirements and ensure that the service provider is maintaining sufficient expertise and retaining skilled resources.
- B. The organization should ensure that there is a clear management communication strategy and path for evaluating and reporting on all outsourced services concerns.
- C. The organization should work with the service provider to review the current agreement and expectations relating to objectives, processes, and overall performance.
- D. The organization should proactively monitor the performance of the service provider, escalate concerns, and use penalty clauses in the contract where necessary.
Answer: D
NEW QUESTION 199
Which of the following statements accurately describes one of the characteristics that distinguishes a multinational company from a domestic company?
- A. A multinational company operates outside of its country of origin.
- B. A multinational company exports its products to other countries.
- C. A multinational company uses raw materials and components from more than one country.
- D. A multinational company has stockholders in other countries.
Answer: A
NEW QUESTION 200
Which of the following is most likely to function as a directive control?
- A. Cycle counts.
- B. Alert employees.
- C. Insurance claims.
- D. Security dogs.
Answer: B
NEW QUESTION 201
Which of the following is least likely to help ensure that risk is considered in a work program?
- A. Prior risk assessments are considered.
- B. All available information from the risk-based plan is used.
- C. Client efforts to affect risk management are considered.
- D. Risks are discussed with audit client.
Answer: A
NEW QUESTION 202
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