IIA-CHAL-QISA Free Practice Test

Which of the following is the most appropriate reason for a chief audit executive to conduct an external assessment more frequently than five years?

1. A. Significant changes in the organization's accounting policies or procedures would warrant timely analysis and feedback.
2. B. More frequent external assessments can serve as an equivalent substitute for internal assessments.
3. C. The parent organization's internal audit activity agreed to perform biennial reciprocal external assessments to provide greater assurance at a reduced cost.
4. D. A change in senior management or internal audit leadership may change expectations and commitment to conformance

Correct Answer: D
✑ Introduction:
✑ Reasons for More Frequent Assessments:
✑ Options Analysis:
✑ Conclusion:
:
Internal Audit Standards and Practice Guides .

Which of the following is applicable to both a job order cost system and a process cost system'?

1. A. Total manufacturing costs are determined at the end of each period.
2. B. Costs are summarized in a production cost report for each department
3. C. Three manufacturing cost elements are tracked: direct materials, direct labor, and manufacturing overhead.
4. D. The unit cost can be calculated by dividing the total manufacturing costs for the period by the units produced during the period.

Correct Answer: C
Both job order cost systems and process cost systems track three manufacturing cost elements: direct materials, direct labor, and manufacturing overhead. These cost elements are essential in calculating the total production cost and determining the cost per unit.
✑ Direct Materials: The raw materials directly used in the production of goods.
✑ Direct Labor: The wages of workers who are directly involved in manufacturing the products.
✑ Manufacturing Overhead: Indirect costs associated with production, such as utilities, maintenance, and depreciation of equipment.
References:
✑ "Cost Accounting: A Managerial Emphasis," which details the tracking of manufacturing costs in different costing systems .

According to IIA guidance, which of the following describes the primary reason to implement environmental and social safeguards within an organization?

1. A. To enable Triple Bottom Line reporting capability.
2. B. To facilitate the conduct of risk assessment
3. C. To achieve and maintain sustainable development.
4. D. To fulfill regulatory and compliance requirements.

Correct Answer: C
Implementing environmental and social safeguards aligns with the broader organizational goal of achieving sustainable development.
These safeguards ensure that the organization operates in a manner that is environmentally responsible and socially conscious, which is crucial for long-term sustainability

Which of the following must be in existence as a precondition to developing an effective system of internal controls?

1. A. A monitoring process
2. B. A risk assessment process.
3. C. A strategic objective-setting process.
4. D. An information and communication process

Correct Answer: B
✑ Risk Assessment Process: A risk assessment process is essential for identifying, analyzing, and managing risks that could prevent the achievement of objectives. It is a critical component in developing an effective system of internal controls.
✑ COSO Framework: The Committee of Sponsoring Organizations (COSO) Internal Control Framework outlines risk assessment as a fundamental part of internal control systems.
✑ Other Preconditions:
:
COSO Internal Control Framework.

Which of the following is true of matrix organizations?

1. A. A unity-of-command concept requires employees to report technically, functionally, and administratively to the same manager.
2. B. A combination of product and functional departments allows management to utilize personnel from various functions.
3. C. Authority, responsibility, and accountability of the units involved may vary based on the projects life, or the organization's culture.
4. D. it is best suited for firms with scattered locations or for multi-line, large-scale firms.

Correct Answer: B
✑ 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:
✑ 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.
: Management and Organizational Behavior textbooks.