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IIA Certification in Risk Management Assurance Sample Questions:

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

2. Which of the following best describes the assessment of risks?

A) Assess the likelihood and/or impact of risk on the achievement of organizational objectives.
B) Assess the amount of risk an organization can accept while pursuing its objectives.
C) Assess alternative strategies to reduce or eliminate major risks.
D) Assess the actions necessary to reduce the likelihood and/or impact of risk to tolerable levels.

3. If an engagement client disputes that a specific action or process is within the scope of the internal audit activity, what would be the most appropriate way for the internal audit activity (IAA) to respond?

A) Terminate only the specific action or process with which the client disagrees and work to determine a substitute function that will not impede further IAA or the client-audit relationship.
B) Refer the client to the IAA's charter and the approved yearly audit plan, which includes the areas designated for audit in the current time period.
C) Terminate the audit engagement in full because an operational audit will not be productive without the client's cooperation.
D) Seek the approval of senior management or the board in mediation, allowing an overseer to clarify the scope of the audit engagement for the client.

4. Why are preventative controls generally preferred to detective controls?

A) Because preventive controls include output procedures, which cover the full range of possible reviews, reconciliations and analysis.
B) Because preventive controls promote doing the right thing in the first place, and lessen the need for corrective action.
C) Because preventive controls are more sensitive and identify more exceptions than detective controls.
D) Because preventive controls identify exceptions after-the-fact, allowing them to be used after the entire review is complete and therefore finding exceptions that detective controls may have missed.

5. Which of the following techniques would provide the most compelling evidence that a safety hazard exists within a manufacturing facility?

A) Questioning of facility management, including the facility safety officer.
B) Observation of the facility during operations.
C) Review of records involving safety violations, filed by facility production employees.
D) Analysis of facility operating reports, focusing on instances when breakdowns occurred.

Solutions: