IIA-CHAL-QISA Actual Questions Answers Pass With Real IIA-CHAL-QISA Exam Dumps
IIA-CHAL-QISA Dumps Prepare Your Exam With 152 Questions
IIA IIA-CHAL-QISA Exam Syllabus Topics:
| Topic | Details |
|---|---|
| Topic 1 |
|
| Topic 2 |
|
| Topic 3 |
|
NEW QUESTION # 71
If the skills and competencies are not present within the internal audit activity to complete an ad-hoc assurance engagement, which of the following is an acceptable resolution?
- A. Change the scope of the testing to ensure that only available staff proficiencies are used
- B. Complete the engagement as requested, with the best of the current staff's abilities.
- C. Politely decline the engagement due to a lack of qualified staff available at the time.
- D. Consider using employees from other departments in the organization on the audit team.
Answer: D
Explanation:
* Introduction:
* When the internal audit team lacks necessary skills for an ad-hoc assurance engagement, leveraging internal resources can be a practical solution.
* Resolving Skill Gaps:
* Using employees from other departments can provide the needed expertise while maintaining the engagement's integrity.
* Options Analysis:
* Option A: Declining the engagement may not be feasible and does not address the need.
* Option B: Completing the engagement without the required skills can compromise quality.
* Option C: Using employees from other departments brings in the necessary competencies and supports cross-functional collaboration.
* Option D: Changing the scope may limit the effectiveness of the engagement.
* Conclusion:
* The acceptable resolution is to consider using employees from other departments in the organization to bring in the required skills for the engagement.
NEW QUESTION # 72
An internal auditor believes that the internal audit activity's independence is impaired Which of the following actions should the internal auditor take first?
- A. Decide on the extent of impact of the impairment
- B. Ascertain the best approach to disclose the impairment.
- C. Discuss the impairment with the audit manager.
- D. Report the impairment to senior management
Answer: C
Explanation:
The board manages several key processes to ensure adequate governance within an organization, one of which is the development, approval, and execution of the strategic plan. This process is critical because it defines the organization's direction, goals, and the actions required to achieve these goals.
* Strategic Planning: The board plays a pivotal role in setting the organization's strategic direction, which includes establishing long-term goals and defining the means to achieve them.
* Performance Measurement: While the board may establish and measure performance objectives for the internal audit activity, this is part of a broader governance framework.
* Risk Management: The board also develops strategies to mitigate risks, ensuring that the organization can achieve its objectives effectively.
Thus, the most comprehensive governance-related process managed by the board involves strategic planning
NEW QUESTION # 73
Which of the following statements is true regarding the management-by-objectives method?
- A. Management by objectives helps organizations to keep employees motivated.
- B. Management by objectives is most helpful in organizations that have rapid changes
- C. Management by objectives is most helpful in mechanistic organizations with rigidly defined tasks.
- D. Management by objectives helps organizations to distinguish clearly strategic goals from operational goals
Answer: A
Explanation:
Definition of Management by Objectives (MBO): Management by Objectives is a performance management approach where managers and employees work together to identify, plan, organize, and communicate objectives. This method involves setting clear, measurable goals with defined timelines.
Key Benefits:
* Employee Motivation: MBO aligns individual goals with organizational objectives, fostering a sense of ownership and engagement among employees. By participating in goal-setting, employees are more motivated to achieve these objectives, as they see a direct link between their efforts and organizational success.
* Performance Measurement: Clear objectives allow for effective performance measurement and provide a basis for performance appraisals and feedback.
Comparison with Other Options:
* Rapid Changes: Option A is incorrect because MBO is not necessarily best suited for environments with rapid changes, as it relies on predefined objectives that may quickly become outdated.
* Mechanistic Organizations: Option B is incorrect because MBO is more effective in flexible, dynamic organizations rather than rigid, mechanistic ones.
* Strategic vs. Operational Goals: Option D is incorrect because MBO does not inherently distinguish between strategic and operational goals; it focuses on achieving specific measurable objectives.
References:
* MBO helps in increasing employee motivation by involving them in the goal-setting process and aligning their objectives with the organization's goals, which enhances engagement and performance.
NEW QUESTION # 74
An internal audit activity has to confirm the validity of the activities reported by a grantee that received a chantable contribution from the organization Which of the following methods would best help meet this objective?
- A. Reconciling general ledger accounts used by management of the area under review for reflecting expenses on charitable contributions
- B. Interviewing employees of the corporate affairs department, which is responsible for charitable activities
- C. Verifying that the grantee's final report is in line with what was depicted in the initial budget request.
- D. Visiting the grantee to assess whether the execution of the project was in line with the defined grant scope.
Answer: D
Explanation:
* Introduction:
* When verifying the validity of activities reported by a grantee, it is essential to gather evidence that the project was executed as intended and within the defined scope.
* Effective Verification Methods:
* A site visit allows the auditor to observe firsthand the activities and projects funded by the grant, ensuring they align with the grant's objectives and scope.
* Options Analysis:
* Option A: Visiting the grantee provides direct evidence of the project execution and alignment with the grant scope.
* Option B: Verifying the final report against the initial budget request ensures financial compliance but does not confirm actual project activities.
* Option C: Reconciling general ledger accounts verifies financial records but not the execution of activities.
* Option D: Interviewing corporate affairs employees provides insight but not direct evidence of project execution.
* Conclusion:
* The best method to confirm the validity of the activities reported by a grantee is to visit the grantee and assess whether the project execution aligns with the defined grant scope.
NEW QUESTION # 75
Organizations that adopt just-in-time purchasing systems often experience which of the following?
- A. A slight increase in carrying costs.
- B. A greater need for linkage with a vendors computerized order entry system.
- C. An Increase in the number of suitable suppliers
- D. A greater need for inspection of goods as the goods arrive
Answer: B
Explanation:
Just-in-time (JIT) purchasing systems aim to minimize inventory levels by receiving goods only as they are needed in the production process, which requires tight integration with suppliers.
* Vendor Linkage: JIT systems demand a highly efficient and responsive supply chain. Linking with vendors' computerized order entry systems ensures that orders are processed quickly and accurately, supporting the JIT philosophy.
* Inspection: JIT systems often rely on high-quality suppliers to minimize the need for inspection upon arrival, focusing instead on preventive measures at the supplier's end.
* Carrying Costs: A JIT system typically reduces carrying costs by keeping inventory levels low.
* Supplier Base: The focus is often on a few reliable suppliers rather than increasing the number of suppliers.
References:
* "Supply Chain Management: Strategy, Planning, and Operation," which discusses the operational requirements and benefits of JIT systems.
NEW QUESTION # 76
Which of the following is a true statement regarding whistleblowing?
- A. Whistleblowing programs help employees deal with ethical questions and instill ethical values into everyday behavior
- B. Whistleblowers should inform the organization about actual criminal circumstances, not assumed allegations.
- C. Whistleblowers are current or former employees who are disgruntled and looking to retaliate.
- D. Whistleblowing is one of several possible ethical structures an organization can undertake to encourage ethical behavior.
Answer: D
Explanation:
* Purpose of Whistleblowing:Whistleblowing is a mechanism that allows employees to report unethical or illegal activities within the organization. It is a vital part of an organization's ethical framework, providing a structured way for concerns to be raised and addressed.
NEW QUESTION # 77
According to IIA guidance, which of the following is true regarding typical fraud schemes?
1.A diversion occurs when an employee has an undisclosed personal economic interest in a transaction that adversely affects the organization
2.Tax evasion is intentional reporting of false or misleading information on a tax return by an organization to reduce taxes owed.
3.Skimming involves stealing cash or assets from the organization and is normally concealed by adjusting the organization's records
4Disbursement fraud occurs when a person causes the organization to issue a payment for fictitious goods or services
- A. 1 and 4
- B. 1 and 3.
- C. 2 and 3.
- D. 2 and 4
Answer: D
Explanation:
* Diversion typically involves redirecting resources or assets for personal use, not just having an undisclosed interest.
* Tax evasion involves deliberate falsification of financial information to avoid tax liabilities.
* Skimming is taking cash before it is recorded in the accounting system, usually difficult to detect.
* Disbursement fraud involves creating fictitious invoices or vendors to divert funds.
NEW QUESTION # 78
Which of the following is an advantage of utilizing an external fraud specialist in a suspected fraud investigation?
- A. increased access to the organization's employees.
- B. Increased ability to scrutinize the organization's key business processes.
- C. increased access to the organization's software and proprietary data.
- D. Increased ability to preserve evidence and the chain of command.
Answer: D
Explanation:
* Introduction:
* Engaging an external fraud specialist brings several advantages to an investigation, particularly in preserving the integrity of evidence.
* Advantages of External Fraud Specialists:
* External specialists bring expertise, objectivity, and resources that may not be available internally.
* Options Analysis:
* Option A: Access to employees is not necessarily increased with external specialists.
* Option B: External fraud specialists have the skills and protocols to preserve evidence and maintain the chain of command, ensuring legal and procedural compliance.
* Option C: Scrutinizing business processes is part of their role, but the primary advantage lies in evidence preservation.
* Option D: Access to software and proprietary data is not the primary advantage; internal controls can provide this access as needed.
* Conclusion:
* The main advantage of utilizing an external fraud specialist is their increased ability to preserve evidence and maintain the chain of command, which is critical in legal and compliance contexts.
NEW QUESTION # 79
Which of the following could increase risks to the organization's control environment?
- A. Strong board of directors oversight.
- B. Implementation of a fraud hotline
- C. Incentive-based compensation structures
- D. Lower than average employee turnover.
Answer: C
Explanation:
Incentive-based compensation can increase the risk of unethical behavior or fraudulent activities as employees might be tempted to manipulate results to achieve their performance targets.
This could undermine the control environment and lead to significant risks if not managed properly
NEW QUESTION # 80
Which of the following methods is most closely associated to year over year trends?
- A. Ratio analysis.
- B. Horizontal analysts
- C. Common-size analysis.
- D. Vertical analysis.
Answer: B
Explanation:
* Introduction:
* Horizontal analysis involves comparing financial data across multiple periods to identify trends and patterns over time.
* Year-over-Year Trends:
* This method helps in understanding changes in financial performance and position year-over-year.
* Options Analysis:
* Option A: Horizontal analysis is directly related to comparing data year-over-year.
* Option B: Vertical analysis involves comparing items on a financial statement as a percentage of a base figure within the same period.
* Option C: Common-size analysis is a type of vertical analysis where all items are expressed as a percentage of a common base.
* Option D: Ratio analysis evaluates relationships between different financial statement items but is not primarily focused on year-over-year trends.
* Conclusion:
* Horizontal analysis is most closely associated with year-over-year trends as it involves reviewing financial data across periods.
NEW QUESTION # 81
In which scenario might it be considered problematic for the chief audit executive (CAE) to provide assurance services over the payroll function?
- A. The assurance review was initiated following issues identified during a consulting assignment requested by management.
- B. Prior to becoming the CAE, the CAE was the payroll manager.
- C. A couple of years ago, the CAE performed accounting functions for the payroll department.
- D. The CAE previously undertook a consulting assignment in that area to improve processes.
Answer: B
Explanation:
* Introduction:
* The independence and objectivity of the internal audit function are paramount, especially when the CAE has had prior involvement in the area under review.
* Scenario Analysis:
* Option A: Previous consulting assignments may raise concerns but do not inherently impair independence if managed correctly.
* Option B: A historical role in accounting functions is less problematic if sufficient time has passed and there is no ongoing influence.
* Option C: Having been the payroll manager presents a direct conflict of interest, compromising the CAE's objectivity.
* Option D: Reviews following consulting assignments are common practice and do not necessarily indicate a conflict.
* Conclusion:
* It is problematic for the CAE to provide assurance over payroll functions if they were previously the payroll manager, as this creates a clear conflict of interest and threatens audit objectivity.
NEW QUESTION # 82
According to ISO 31000, which of the following statements is correct?
- A. The board is responsible for setting the organizational attitude through tone at the top.
- B. The internal audit activity will provide assurance over operating effectiveness but not over the design of risk management activities
- C. The framework is designed to be effective for organizations no matter how small.
- D. The internal audit activity can give objective assurance on any part of the risk management framework for which it is responsible.
Answer: C
Explanation:
According to ISO 31000, the risk management framework is scalable and applicable to organizations of all sizes, including small entities. The framework's principles are designed to be flexible and adaptable, ensuring they can be effectively implemented regardless of the organization's size.
* Scalability: The principles and guidelines of ISO 31000 can be tailored to fit the specific context, resources, and complexity of any organization, making it a universal standard.
* Flexibility: The framework supports organizations in integrating risk management practices into their operations at a level that suits their size and complexity.
* Effectiveness: Regardless of the organization's size, the framework aims to enhance risk management practices and support better decision-making.
References:
* "ISO 31000: Risk Management Guidelines," which outlines the applicability and flexibility of the framework for all organizations .
NEW QUESTION # 83
Which of the following is true of matrix organizations?
- A. Authority, responsibility, and accountability of the units involved may vary based on the projects life, or the organization's culture.
- B. A unity-of-command concept requires employees to report technically, functionally, and administratively to the same manager.
- C. A combination of product and functional departments allows management to utilize personnel from various functions.
- D. it is best suited for firms with scattered locations or for multi-line, large-scale firms.
Answer: C
Explanation:
* Matrix Organization Structure: In matrix organizations, employees report to both functional and product managers. This dual reporting structure allows the organization to efficiently use its personnel across different projects and functions.
* Advantages of Matrix Structure:
* Resource Utilization: Personnel from various functions can be utilized effectively across multiple projects, improving resource allocation and flexibility.
* Coordination and Communication: This structure enhances coordination and communication across different functional areas and projects.
* Unity-of-Command: Option A is incorrect because the unity-of-command principle is compromised in a matrix organization due to dual reporting lines.
* Authority and Accountability: Option C is correct to some extent but does not capture the primary benefit of resource utilization.
* Suitability: Option D refers to the best use cases for matrix structures, but option B provides a more comprehensive understanding of how matrix organizations function.
NEW QUESTION # 84
An internal auditor is asked to determine why the production line for a large manufacturing organization has been experiencing shutdowns due to unavailable parts The auditor learns that production data used for generating automatic purchases via electronic interchange is collected on personal computers connected by a local area network (LAN) Purchases are made from authorized vendors based on both the production plans for the next month and an authorized materials requirements plan (MRP) that identifies the parts needed per unit of production. The auditor suspects the shutdowns are occurring because purchasing requirements have not been updated for changes in production techniques. Which of the following audit procedures should be used to test the auditor's theory?
- A. Compare purchase orders generated from test data Input into the LAN with purchase orders generated from production data for the most recent period.
- B. Select a sample of production estimates and MRPs for several periods and trace them into the system to determine that input is accurate
- C. Develop a report of excess inventory and compare the inventory with current production volume.
- D. Compare the parts needed based on current production estimates and the MRP for the revised production techniques with the purchase orders generated from the system for the same period
Answer: D
Explanation:
To test the theory that shutdowns are due to outdated purchasing requirements, the auditor should compare the parts needed according to the revised production techniques with the purchase orders generated. This comparison will reveal whether the system has been updated to reflect changes in production techniques, thereby identifying any discrepancies causing the unavailability of parts.
NEW QUESTION # 85
A bakery chain has a statistical model that can be used to predict daily sales at individual stores based on a direct relationship to the cost of ingredients used and an inverse relationship to rainy days What conditions would an auditor look for as an Indicator of employee theft of food from a specific store?
- A. Both total sales and cost of ingredients used are less than expected.
- B. Both total sales and cost of ingredients used are greater than expected.
- C. On a rainy day. total sales are greater than expected when compared to the cost of ingredients used
- D. On a sunny day. total sales are less than expected when compared to the cost of ingredients used.
Answer: C
Explanation:
The statistical model indicates that daily sales have a direct relationship with the cost of ingredients used and an inverse relationship with rainy days.
* Option A: On a rainy day, if total sales are greater than expected compared to the cost of ingredients used, it may indicate discrepancies that could be a sign of employee theft. For instance, if ingredients are used but not reflected in the sales, it suggests that items might be missing (stolen).
* Option B: On a sunny day, lower-than-expected sales compared to the cost of ingredients could indicate wastage but not necessarily theft.
* Option C and D: Both scenarios where total sales and the cost of ingredients are higher or lower than expected do not specifically point to theft without additional context.
NEW QUESTION # 86
According to IIA guidance, which of the following statements regarding the internal audit charter is true?
- A. The nature of assurances provided to parties outside of the organization typically is not included in the charter.
- B. The charter typically defines the internal audit activity's position within the organization.
- C. The chief audit executive must formally review the charter at least once a year
- D. The nature of consulting services typically is not included in the charter.
Answer: B
Explanation:
The internal audit charter outlines the internal audit activity's purpose, authority, and responsibility within the organization.
It defines the internal audit activity's position within the organization, including reporting lines, independence, and access to records, personnel, and physical properties relevant to the performance of engagements.
This clarity helps ensure that the internal audit activity can operate independently and effectively
NEW QUESTION # 87
......
New IIA-CHAL-QISA Dumps - Real IIA Exam Questions: https://certkingdom.preppdf.com/IIA/IIA-CHAL-QISA-prepaway-exam-dumps.html