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IIA Business Knowledge for Internal Auditing Sample Questions (Q311-Q316):

NEW QUESTION # 311
Which statement best describes total quality management TOM)?

A. TOM emphasizes doing each job right the first time.
B. TOM emphasizes encouraging crass-functional teamwork.
C. TOM emphasizes better statistical quality control techniques.
D. TOM emphasizes reducing the cast of inspection.

Answer: A

Explanation:
TOM establishes quality as an organizational objective and views it as a major component of the organization's service to its customers. It emphasizes employee training and commitment, product/service design and production, and customer service. Ordinarily, the quality of a product or service is as important to customers as cast and timeliness. Superior product quality is not attained merely through more inspection, better statistical quality control, and cross-functional teamwork. Manufactures must make fundamental changes in the way they produce products and do each jab right the first time.

NEW QUESTION # 312
Which of the following should the chief audit executive agree upon with the board before starting an external assessment of the internal audit function?

A. The qualifications needed on the external assessment team
B. The level of testing that will be required
C. The audit areas that should be reviewed
D. The specialized skills that each external assessment team member needs

Answer: A

Explanation:
Before an external assessment of the internal audit activity, the CAE should agree with the board on the qualifications and independence of the external assessor or assessment team. This ensures credibility and compliance with the IIA's Quality Assurance and Improvement Program (QAIP) requirements.
Options A and B (specific audit areas or testing levels) are not matters for board approval in external assessments. Option D (specialized skills) is relevant but not as essential as overall qualifications and competence.
Reference:
IIA Standards - Standard 1312: External Assessments; Practice Advisory 1312-1.

NEW QUESTION # 313
Which of the following actions should an internal auditor take to clean the data obtained for analytics purposes?

A. Deploys data visualization tool.
B. Eliminate duplicate records.
C. Define analytics objectives and establish outcomes.
D. Adopt standardized data analysis software.

Answer: B

Explanation:
Data cleaning (also called data cleansing or scrubbing) is a critical step in data analytics to ensure accuracy, consistency, and reliability. Removing duplicate records is a key data cleaning technique that improves data quality.
* Improves Data Integrity - Prevents misleading results caused by duplicate values.
* Enhances Data Accuracy - Ensures that analytics are based on unique and valid information.
* Optimizes Performance - Reduces redundancy, improving processing speed and efficiency.
* Prevents Reporting Errors - Ensures accurate insights for decision-making.
* A. Deploys data visualization tool - Visualization tools help interpret data but do not clean it.
* B. Adopt standardized data analysis software - Software tools support analysis but do not eliminate duplicate records automatically.
* C. Define analytics objectives and establish outcomes - This step is important for analysis strategy, but it does not clean data.
* IIA's GTAG on Data Analytics - Emphasizes the importance of data cleansing in ensuring reliable analytics.
* COBIT 2019 (Data Management Framework) - Highlights duplicate removal as a best practice in data governance.
* ISO 8000-110 (Data Quality Standard) - Recommends eliminating duplicate records for high- quality analytics.
Why Eliminating Duplicate Records is the Correct Answer?Why Not the Other Options?IIA References:# Final Answer: D. Eliminate duplicate records.

NEW QUESTION # 314
A measure that describes the risk of an investment project relative to other investments in general is the:

A. Standard deviation.
B. Coefficient of variation.
C. Beta coefficient
D. Expected return

Answer: C

Explanation:
The required rate of return on equity capital in the Capital Asset Pricing Model is the risk-free rate, plus the product of the market risk premium times the beta coefficient. The market risk premium is the amount above the risk-free rate that will induce investment in the market The beta coefficient of an individual share is the correlation between the volatility price variation) of the stock market and that of the price of the individual share. For example. if an individual share goes up 15% and the market only 10%. beta is 1.5.

NEW QUESTION # 315
An internal auditor is reviewing the organization's performance appraisal process. Which of the following methods would be most effective to identify stereotyping?

A. Use a behaviorally anchored rating scale to Break down jobs into their components.
B. Analyze the number and percentages of employee appraisals that fall into each rating category
C. Compare the ratings of selective employees with their previous appraisals.
D. Analyze and compare the ratings for different classes or groupings of employees.

Answer: C

NEW QUESTION # 316
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