NEW QUESTION 1

The leadership of an organization encourages employees to form voluntary problem-solving groups whereby several employees from the same work area meet regularity during work hours to discuss improvements and creative ways to reduce costs. Which of the following best describes this approach?

• A. Open-book management
• B. Quality control circles
• C. Self-managed teams
• D. Cross-functional teams

Answer: C

NEW QUESTION 2

According to IIA guidance, which of the following corporate social responsibility (CSR) activities is appropriate for the internal audit activity to perform?

• A. Determine the optimal amount of resources for the organization to invest in CSR.
• B. Align CSR program objectives with the organization's strategic plan.
• C. Integrate CSR activities into the organization's decision-making process.
• D. Determine whether the organization has an appropriate policy governing its CSR activities.

Answer: D

NEW QUESTION 3

When attempting to devise creative solutions to problems, team members initially should do which of the following?

• A. Suspend assumptions and negative feedback
• B. Weight suggestions based on the speaker's level of authority.
• C. Discuss the details of all options presented
• D. Provide documentation to support their positions

Answer: C

NEW QUESTION 4

Which of the following is not a barrier to effective communication?

• A. Filtering.
• B. Communication overload.
• C. Similar frames of reference.
• D. Lack of source credibility.

Answer: C

NEW QUESTION 5

Which is the least effective form of risk management?

• A. Systems-based preventive control.
• B. People-based preventive control.
• C. Systems-based detective control.
• D. People-based detective control.

Answer: D

NEW QUESTION 6

Which of the following price adjustment strategies encourages prompt payment?

• A. Cash discounts.
• B. Quantity discounts.
• C. Functional discounts.
• D. Seasonal discounts.

Answer: A

NEW QUESTION 7

Which of the following statements is correct regarding corporate compensation systems and related bonuses?
* 1. A bonus system should be considered part of the control environment of an organization and should be considered in formulating a report on internal control.
* 2. Compensation systems are not part of an organization's control system and should not be reported as such.
* 3. An audit of an organization's compensation system should be performed independently of an audit of the control system over other functions that impact corporate bonuses.

• A. 1 only
• B. 2 only
• C. 3 only
• D. 2 and 3 only

Answer: A

NEW QUESTION 8

Refer to the exhibit.

A company's financial balance sheet is presented below: The company has net working capital of:

• A. $160
• B. $210
• C. $350
• D. $490

Answer: B

NEW QUESTION 9

An organization's headquarters is centrally located and the organization runs numerous computer applications in multiple sites. Which of the following would be the most appropriate approach for conducting an audit of the mainframe computer'

• A. Conduct an individual audit of the mainframe general controls and separate application control audits of the individual applications in a phased manner
• B. Conduct a single consolidated audit of both the mainframe general controls and the application controls for all of the applications that use the mainframe
• C. Conduct individual audits of each application and include in each audit the general controls of the mainframe relevant to the individual application
• D. Conduct a series of location-based audits that cover both the general and application IT controls m an systems across the location

Answer: A

NEW QUESTION 10

An internal auditor is investigating a potential fraudulent activity. What is the first test the auditor should perform on the transaction data under scrutiny?

• A. Digital analysis for statistically unlikely occurrences that may indicate system tampering.
• B. Verification of the completeness and integrity of the obtained data.
• C. Detailed review of the data contents to strategize the best analytical techniques.
• D. Calculation of statistical parameters to identify outliers requiring further scrutiny.

Answer: B

NEW QUESTION 11

Which of the following best describes the purpose of disaster recovery planning?

• A. To reconstitute systems efficiently following a disruptive event.
• B. To define rules on how devices within the system should communicate after a disaster.
• C. To describe how data should move from one system to another system in case of an emergency.
• D. To establish a protected area of network that is accessible to the public after a disaster

Answer: A

NEW QUESTION 12

The first step in determining product price is:

• A. Determining the cost of the product.
• B. Developing pricing objectives.
• C. Evaluating prices set by the competitors.
• D. Selecting a pricing method.

Answer: B

NEW QUESTION 13

According to IIA guidance on IT auditing, which of the following would not be an area examined by the internal audit activity?

• A. Access system security.
• B. Policy development.
• C. Change management.
• D. Operations processes.

Answer: B

NEW QUESTION 14

According to IIA guidance, which of the following is a typical risk associated with the tender process and contracting stage of an organization's IT outsourcing life cycle?

• A. The process is not sustained and is not optimized as planned.
• B. There is a lack of alignment to organizational strategies.
• C. The operational quality is less than projected.
• D. There is increased potential for loss of assets.

Answer: D

NEW QUESTION 15

Which of the following principles is shared by both hierarchical and open organizational structures?
* 1. A superior can delegate the authority to make decisions but cannot delegate the ultimate responsibility for the results of those decisions
* 2. A supervisor's span of control should not exceed seven subordinates
* 3. Responsibility should be accompanied by adequate authority
* 4. Employees at all levels should be empowered to make decisions.

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

Answer: A

NEW QUESTION 16

According to the International Professional Practices Framework, internal auditors who are assessing the adequacy of organizational risk management processes should not:

• A. Recognize that organizations use different techniques for managing risk.
• B. Seek assurance that the key objectives of the risk management processes are being met.
• C. Determine and accept the level of risk for the organization.
• D. Treat the evaluation of risk management processes differently from the risk analysis used to plan audit engagements.

Answer: C

NEW QUESTION 17

Which of the following is a disadvantage of selecting a commercial software package rather than developing an application internally?

• A. Lack of flexibility.
• B. Incompatibility with client/server technology.
• C. Employee resistance to change.
• D. Inadequate technical support.

Answer: A

NEW QUESTION 18

If a just-in-time purchasing system is successful in reducing the total inventory costs of a manufacturing company, which of the following combinations of cost changes would be most likely to occur?

• A. 1
• B. 2
• C. 3
• D. 4

Answer: D

NEW QUESTION 19

An internal auditor was asked to review an equal equity partnership In one sampled transaction Partner A transferred equipment into the partnership with a self-declared value of $10,000 and Partner B contributed equipment with a self-declared value of $15 000 The capital accounts of each partner were subsequently credited with S12,500. Which of the following statements is true regarding this transaction?

• A. The capital accounts of the partners should be increased by the original cost of the contnbuted equipment.
• B. The capital accounts should be increased using a weighted average based on the current percentage of ownership
• C. No action is needed as the capital account of each partner was increased by the correct amount
• D. The capital accounts of the partners should be increased by the fair market value of their contribution

Answer: C

NEW QUESTION 20

As it relates to the data analytics process, which of the following best describes the purpose of an internal auditor who cleaned and normalized data?

• A. The auditor eliminated duplicate information.
• B. The auditor organized data to minimize useless information.
• C. The auditor made data usable for a specific purpose by ensuring that anomalies were identified and corrected.
• D. The auditor ensured data fields were consistent and that data could be used for a specific purpose.

Answer: C

NEW QUESTION 21
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