EMT Practice Test

1. Question Content...

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Question1: Which of the following best describes the details that must be included in the quality assurance and improvement program (QAIP) report to senior management and the board?

Question2: The chief audit executive (CAE) is planning to conduct an internal assessment of the internal audit activity (IAA). Part of this assessment will include benchmarking. According to IIA guidance, which of the following qualitative metrics would be appropriate for the CAE to use?
1. Average client customer satisfaction score for a given year.
2. Client survey comments on how to improve the IAA.
3. Auditor interviews once an audit has been completed.
4. Percentage of audits completed within 90 days.

Question3: Which of the following scenarios best illustrates the principle of due professional care?

Question4: According to IIA guidance, which of the following is an area in which the internal auditor should be proficient?

Question5: According to IIA guidance, the results of a formal quality assessment should be reported to which of the following groups?

Question6: An internal auditor in a small broadcasting organization was assigned to review the revenue collection process.
The auditor discovered that some checks from three customers were never recorded in the organization's financial records. Which of the following documents would be the least useful for the auditor to verify the finding?

Question7: According to The MA Code of Ethics, which of the following is one of the rules of conduct for objectivity?

Question8: Which of the following statements is true with regard to conducting an effective quality assurance and improvement program?

Question9: Which of the following responsibilities would fall under the role of the chief audit executive, rather than internal audit staff or the audit manager?

Question10: A multinational organization has asked the internal audit activity to assist in setting up the organization's risk management system. The chief audit executive (CAE) agrees to take on the engagement as a consultant.
Which of the following tasks is appropriate for the CAE to undertake?

Question11: Sometimes, internal audit staff may partner with operating managers to rank risks. Which of the following outcomes may be the most beneficial aspects of this strategy?
1. Reappraising risks levels.
2. Providing accurate information to management.
3. Marketing the internal audit activity.
4. Planning safeguards for assets in high-risk areas.

Question12: When developing the organization's first risk universe, which of the following would the chief audit executive be least likely to consider?

Question13: Which of the following behaviors could represent a significant ethical risk if exhibited by an organization's board?

Question14: Which of the following situations is most likely to impair internal audit objectivity?

Question15: An internal auditor is using a spreadsheet application to review a cash flow forecast prepared by management.
Which of the following correctly identifies the type of evidence this information represents?

Question16: Which of the following is the most common way that occupational fraud is detected?

Question17: A large sales organization maintains a system of internal control according to the COSO model and has updated its code of conduct. This change relates to which component of the COSO framework?

Question18: The internal audit activity is planning a procurement audit and needs to obtain a thorough understanding of the subcontracting process, which can involve multiple individuals in multiple countries.
Which of the following internal audit tools would be most effective to document the process and the key controls?

Question19: Which of the following is considered a violation of The IIA's Code of Ethics?

Question20: A new director was hired to lead the internal audit activity at a small start-up company. Which of the following assignments would impair the director's independence?

Question21: According to IIA guidance, which of the following statements describes one of the similarities between assurance and consulting services?

Question22: Which of the following documents is most appropriate in promoting the objectivity of the internal audit activity?

Question23: Which of the following actions should the audit committee take to promote organizational independence for the internal audit activity?

Question24: An internal auditor uses a predefined macro provided in a popular spreadsheet application to verify the present value of the organization's investments. Which of the following is the most appropriate course of action regarding the auditor's use of this functionality?

Question25: According to IIA guidance, which of the following is ultimately responsible for seeing that the internal control system of an organization's social responsibility program is effective?

Question26: In which of the following scenarios would the chief audit executive (CAE) be required to decline the assignment?

Question27: What should the internal auditor's role be in assessing the organization's ethical climate?

Question28: An internal auditor is evaluating techniques management uses to mitigate risks within a particular product division. Which of the following is an example of risk reduction?

Question29: Which of the following factors have the greatest influence on the independence of the internal audit activity?

Question30: According to IIA guidance, which of the following should be formally documented in the internal audit charter?

Question31: Which of the following statements is true about The IIA Global Internal Audit Competency Framework?

Question32: Which of the following is an example of a detective control?

Question33: Given the highly technical and legal nature of privacy issues, which of the following statements best describes the internal audit activity's responsibility with regard to assessing an organization's privacy framework?

Question34: A chief audit executive (CAE) is selecting an internal audit team to perform an audit engagement that requires a high level of knowledge in the areas of finance, investment portfolio management, and taxation. If neither the CAE nor the existing internal audit staff possess the required knowledge, which of the following actions should the CAE take?

Question35: An organization decides to take no action on one of its financial risks because the cost of implementing the control outweighs the value of the asset being protected. Which of the following best describes this risk strategy?

Question36: According to IIA guidance, which of the following is an area in which the internal auditor should be proficient?

Question37: A former line supervisor from the Financial Services Department has completed six months of a two-year development opportunity with the internal audit activity (IAA). She is assigned to a team that will audit the organization's payroll function, which is managed by the Human Resources Department. Which of the following statements is most relevant regarding her independence and objectivity with respect to the payroll audit?

Question38: According to the COSO enterprise risk management framework, which of the following best describes the activity that helps ensure risk responses are carried out effectively?

Question39: An internal auditor completed an audit of a bank's loan department and found all significant risks to be managed adequately through effective internal controls. Which of the following would be an appropriate conclusion to report to management?

Question40: Which of the following statements accurately describes an internal auditor's responsibility with regard to due professional care?

Question41: A snow removal company is conducting a scenario planning exercise where participating employees consider the potential impacts of a significant reduction in annua snowfall for the coming winter. Which of the following best describes this type of risk?

Question42: According to IIA guidance, which of the following statements is true when an internal auditor performs consulting services that improve an organization's operations?

Question43: Which of the following options is the most cost-effective and efficient way for internal auditors to keep current with the latest developments in the internal audit profession?

Question44: Which of the following is the best way to detect fraud?

Question45: Which of the following best describes the misdirection of payments on accounts receivable to an employee's bank account?

Question46: The management at a national consumer goods organization implements a fair work and pay practice as well as a policy to treat employees equitably and consistently. Which common characteristics of fraud will the practice and policy most likely reduce?

Question47: An organization invests its savings in a volatile stock with the potential for high gains rather than a mutual fund with a lower expected return and lower volatility. This best describes which of the following risk concepts?

Question48: Which of the following is an activity that an internal auditor must not perform?

Question49: According to The MA Global Internal Audit Competency Framework, which of the following areas of training would best assist the internal audit activity in improving its use of tools and techniques?

Question50: Reviewing prior audit reports and supporting workpapers before an engagement starts enables an internal auditor to do which of the following?
1. To understand better the activity and processes that will be audited.
2. To identify the audit procedures that will be used during the engagement.
3. To ensure that matters of greatest vulnerability will be addressed.
4. To use the information obtained as evidence in the current engagement.

Question51: Which of the following best demonstrates the authority of the internal audit activity?

Question52: Which of the following are core responsibilities to be included in the internal audit charter?
1. Review reliability and integrity of financial and operating information and the means used to identify, measure, classify, and report such information.
2. Determine the adequacy and effectiveness of the organization's systems of internal accounting and operating controls.
3. Participate in the planning and performance of audits of potential acquisitions with the organization's outside accountants and other members of the corporate staff.
4. Report to those members of management who should be informed of results of audit examinations, the audit opinions formed, and the recommendations made.

Question53: Which of the following statements describes impairment to the internal auditor's objectivity?

Question54: Which of the following best ensures the independence of the internal audit activity?
1. The CEO and audit committee review and endorse any changes to the approved audit plan on an annual basis.
2. The audit committee reviews the performance of the chief audit executive (CAE) periodically.
3. The internal audit charter requires the CAE to report functionally to the audit committee.

Question55: Which of the following factors should be considered when determining the appropriate combination of manual techniques and computer-assisted audit techniques (CAATs) to be used during an audit?
1. Acceptance of CAATs findings by entity management.
2. Computer knowledge and expertise of the auditor.
3. Time constraints.
4. Level of audit risk.

Question56: According to The IIA's Code of Ethics, which of the following statements is true?

Question57: According to COSO, which of the following describes a principle related to the control environment?

Question58: An internal audit charter should do which of the following?

Question59: Which of the following is true regarding the use of a formal risk management framework?
1. It facilitates a methodical approach to risk mitigation.
2. It defines and standardizes the terminology used in risk communication.
3. It establishes the risk tolerance levels to be accommodated in the strategy.
4. It facilitates the alignment of risk mitigation strategies with management priorities.

Question60: An organization is facing a financial downturn and needs to impose major budget reductions to all departments. According to MA guidance, which of the following actions is most appropriate for the board to take to evaluate the potential impact on the internal audit activity?

Question61: Which of the following is a requirement for an assurance engagement that may not be for a consulting engagement?

Question62: Which of the following describes a key characteristic related to effective organizational communication?

Question63: Which of the following statements accurately describes the responsibility of the internal audit activity regarding IT governance?
1. The internal audit activity does not have any responsibility because IT governance is the responsibility of the board and senior management of the organization.
2. The internal audit activity must assess whether the IT governance of the organization supports the organization's strategies and objectives.
3. The internal audit activity may assess whether the IT governance of the organization supports the organization's strategies and objectives.
4. The internal audit activity may accept requests from management to perform advisory services regarding how the IT governance of the organization supports the organization's strategies and objectives.

Question64: Which of the following techniques would provide the most compelling evidence that a safety hazard exists within a manufacturing facility?