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IIA Essentials of Internal Auditing Sample Questions (Q282-Q287):

NEW QUESTION # 282
Senior management has decided to adopt the key principles approach of the ISO 31000 risk management framework. According to IIA guidance, which of the following principles is most appropriate when implementing the risk management process in a dynamic agency?

A. Everyone in the agency has a primary responsibility for identifying and managing risks as part of the risk management process.
B. The risk management process, while evaluating risk, should develop a mechanism to rank the relative importance of each risk.
C. The risk management process should use a formal technique to consider the consequence and likelihood of each risk.
D. The risk management process should be regularly reviewed and respond to changes in the environment, to remain relevant.

Answer: D

NEW QUESTION # 283
Which of the following situations allows for the most objectivity on the part of an internal auditor?

A. Drawing conclusions from a sample of financial transactions.
B. Performing a risk assessment of a new financial instrument.
C. Comparing current environmental activities against legislation.
D. Assessing testing procedures in a new computer system.

Answer: C

NEW QUESTION # 284
A company produces a product that consists of materials X, Y, and
Z. The product is mixed so that:
* The quantity of material X used is one-third more than that of material Y.
* The quantity of material Y used is one-fourth less than that of material Z.
If the company used 24, 000 units of material Z during a period, what is a reasonable estimate of the amount of material X used?

A. 8, 000
B. 18, 000
C. 24, 000
D. 32, 000

Answer: C

Explanation:
Section: Volume C

NEW QUESTION # 285
Which of the following reporting relationships results in the greatest impairment to the
independence of the chief audit executive (CAE)?

A. The CAE reports administratively to the president and functionally to the board.
B. The CAE reports administratively and functionally to the president.
C. The CAE reports administratively to the chief financial officer and functionally to the president.
D. The CAE reports administratively to the audit committee and functionally to the chief operating officer.

Answer: B

NEW QUESTION # 286
An internal audit activity has made a preliminary determination that a division of the organization has employed improper accounting practices.
Upon being informed, the head of the organization instructs the chief audit executive (CAE) to cease the investigation and to withhold the information from external auditors.
Which course of action should the CAE follow?

A. Report the communication to the organization's general counsel.
B. Report the instruction to the chairperson of the audit committee.
C. Inform the head of the organization that the investigation will continue as planned.
D. Inform the external auditors of the findings and the mandate to stop investigating.

Answer: B

NEW QUESTION # 287
......

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