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IIA Certification in Risk Management Assurance Sample Questions:

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

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

2. Which of the following is a second line of defense in effective risk management and control?

A) Compliance department.
B) Credit department.
C) Internal audit department.
D) Purchasing department.

3. An internal auditor for a large retail chain suspects that a store manager has been stealing money from cash sales by listing the sales as accounts receivable and then writing off the accounts as bad debts. Which of the following irregularities is the most likely cause of the auditor's suspicion?

A) A much higher percentage of past-due accounts receivable than that of previous years.
B) A much higher percentage of past-due accounts receivable than that of other stores.
C) A much higher bad debt expense as a percentage of sales than that of previous years.
D) A much higher bad debt expense as a percentage of sales than that of other stores.

4. Faced with a complex, highly technical construction audit engagement, the chief audit executive (CAE) considered complementing the current internal audit resources by engaging the services of a civil engineer.
Which of the following should the CAE consider in determining whether the engineer possesses the necessary skills to perform the engagement?
1. Professional certification, license, or other recognition of the engineer's competence in the relevant discipline.
2. Experience of the engineer in the type of work being considered.
3. Compensation or other incentives that the engineer may receive.
4. The extent of other ongoing services that the engineer may be performing for the organization.

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

5. Which of the following is not an appropriate activity for internal auditors to perform?

A) Highlight matters that require management's attention.
B) Recommend management seek a consulting firm to advise on outsourcing.
C) Accumulate data, obtain varying views, and report information to senior management.
D) Implement solutions for specific organizational problems.

Solutions: