IIA IIA Certifications IIA-CGAP Questions & Answers

• Question 101:

  ________includes objectives related to an organization's goals, such as customer service, the safeguarding and efficient use of resources, profitability, and meeting social obligations. Where as __________includes objectives related to matters such as the maintenance of proper accounting records, the reliability of information used within the organization, and of information published for third parties.

  A. Reliability of internal and external reporting, Effectiveness and efficiency of operations.

  B. Reliability of external and external reporting, Effectiveness and efficiency of operations.

  C. Reducing operational surprises, Effectiveness and efficiency of operations.

  D. Effectiveness and efficiency of operations, Reliability of internal and external reporting.

  Correct Answer: D

• Question 102:

  All of the Following are the major goals of COSO EXCEPT:

  A. Establish a common definition of internal control.

  B. Provide a standard against which organizations can assess their control systems.

  C. Create and track Specific, Measurable, Achievable, Results-Oriented and Time Sensitive goals.

  D. Provide a straight-forward line-of-sight view of cascaded organizational goals for both managers and employees.

  Correct Answer: AB

• Question 103:

  Internal controls consist of all of the following interrelated components please choose the correct option:

  A. Control Environment and Risk Assessment

  B. Control Activities and Information and Communication

  C. Monitoring

  D. All of the above

  Correct Answer: D

• Question 104:

  Enterprise risk management enables management to effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build value. Value is maximized when management sets strategy and objectives to strike an optimal balance between growth and return goals and related risks, and efficiently and effectively deploys resources in pursuit of the entity's objectives. Enterprise risk management encompasses all of the following EXCEPT:

  A. Aligning risk appetite and strategy

  B. Enhancing risk response decisions and Seizing opportunities

  C. Reducing operational surprises and losses

  D. Risk Assessment

  Correct Answer: D

• Question 105:

  COSO was a private-sector initiative started in the 1980s to address the problem of fraudulent financial reporting. Problems continued to persist in the 1980s and the private sector was wary of additional government intervention, so all of the following five organizations banded together to form COSO please choose the correct option:

  A. American Institute of Certified Public Accountants

  B. Financial Executives Institute and American Accounting Association

  C. Institute of Management Accountants and the Institute of Internal Auditors

  D. All of the above

  Correct Answer: D

• Question 106:

  Both_______ and _______ stress the concept of self-assessment and responsibility of management in maintaining and monitoring the internal control environment. The primary goals of maintaining the effectiveness and efficiency of operations, ensuring the reliability of financial reporting and complying with applicable laws and regulations, are the same for both:

  A. The Institute of Internal Auditors (IIA) Standards, the Committee of Sponsoring Organizations of the Treadway Commission (COSO),

  B. The Committee of Sponsoring Organizations of the Treadway Commission (COSO), the Canadian Institute of Chartered Accountants' Criteria of Control (CoCo)

  C. International Organization of Supreme Audit Institutions (INTOSAI) Standards, the Canadian Institute of Chartered Accountants' Criteria of Control (CoCo)

  D. The Institute of Internal Auditors (IIA) Standards, the Committee of Sponsoring Organizations of the Treadway Commission (COSO)

  Correct Answer: B

• Question 107:

  The AICPA professional standards identify all of the following internal control components EXCEPT:

  A. Control environment and risk assessment

  B. Assessing diversification risk

  C. Control activities and monitoring1

  D. Information and communication

  Correct Answer: B

• Question 108:

  Management must continually _________and develop clearly defined control objectives. The ________are the policies and procedures that help ensure that management's objectives are followed.

  A. Assess diversification risk, planning activities

  B. Assess price risk, organizing activities

  C. Assess business risk, Control activities

  D. Assess credit risk, planning activities

  Correct Answer: C

• Question 109:

  Internal control is defined as the process effected by an entity's board of directors, management, and other personnel designed to provide reasonable assurance regarding the achievement of objectives in the all of the following categories EXCEPT:

  A. Compliance controls -- relating to the entity's compliance with applicable laws and Regulations.

  B. Operations controls -- relating to the effective and efficient use of the entity's resources.

  C. Information and communication.

  D. Financial reporting controls -- relating to the preparation of reliable published financial statements

  Correct Answer: C

• Question 110:

  ________ generally have provisions for removing sensitive information from audit files. The ________ provides that before an audit is issued to the public, auditors are responsible for removing any confidential information from the work papers.

  A. Policy guidelines, Illinois State Auditing Act

  B. Audit guidelines, Illinois State Auditing Act

  C. Audit guidelines, public audit act 2001

  D. Policy guidelines, public audit act 2001

  Correct Answer: B