Free Access IIA.IIA-CIA-Part1.v2023-02-14.q152 Practice Test (Page 4)

Question 11

According to IIA guidance, which of the following statements is true regarding risk management in an organization?

A.The risk management function has the sole responsibility for identifying and managing risks in all departments

B.The internal audit activity may use a risk management or control framework to assist in risk identification

C.The internal audit activity should consider the organization's maturity, structure, and the competitive environment to establish the organization's risk appetite

D.Risk management is a core responsibility of the internal audit activity

Question 12

Management has implemented a segregation-of-duties policy for handling inventory. Which of the following fraud risks would be more concerning to an internal auditor following the implementation of this new policy?

A.The risk of collusion between parties.

B.The risk of low-liquidity inventory.

C.The risk of damages to the inventory.

D.The risk of falsified reconciliations.

Question 13

Which of the following scenarios best illustrates a rationalization as the root cause of potential fraud?

A.The organization is slowly phasing out three mature products that produce the highest commissions for the sales staff

B.Security cameras that monitor cash handling at the register are not functioning.

C.The controller at a nationwide manufacturing company recently opted to no longer require two-week mandatory vacations for accounting staff.

D.Managers who have been with the organization for several decades become aware that newly hired, younger managers are being moved more quickly into senior positions.

Question 14

Which of the following is the best example of a risk appetite statement concerning an investment portfolio?

A.We will hedge 95 percent of our U S. currency exposure and 100 percent of our European currency exposure.

B.We have a moderate tolerance for investment earnings volatility with a target value at risk of S50 million.

C.We will report to the risk committee all credit losses greater than S10 million and all market value losses greater than S20 million.

D.We will request CEO approval for investments greater than S20 million and board approval for investments greater than $50 million.

Question 15

Which of the following disclosures must the chief audit executive (CAE) include when communicating the results of the quality assurance and improvement program to senior management and the board?

A.Hours and sources of continuing professional education

B.independence and objectivity impairments of the CAE

C.Scope and frequency of both the internal and external assessments

D.Authority and responsibility of the internal audit activity

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Question 11

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