A.R.M. 400 EXAM | NEWEST ACTUAL
EXAM COMPREHENSIVE QUESTIONS
AND VERIFIED ANSWERS GRADED A+ |
100% PASS | 2025 UPDATE!
Which one of the following best describes why many purchasers
require an ISO 9001 certification prior to buying a business?
A. To have an outside audit company attest to its conclusive audit.
B. To ensure that internal standards and controls are in place.
C. To transfer liability should the financial statements prove erroneous.
D. To obligate the seller to perform audits for conformance prior to the
sale. - ✔✔✔ Correct Answer > B
A municipal water plant installed water flow sensors and water
pressure sensors on the water pipes leaving the plant. The sensors
make sure water is flowing properly and that there are no leaks or clogs
which could produce a loss. These types of sensors are
A. Thermal sensors.
B. Mechanical sensors.
C. Biochemical sensors.
D. Radiant sensors. - ✔✔✔ Correct Answer > B
,It is necessary to define functions that should be performed by internal
audit rather than the enterprise risk management (ERM) team because
A. Internal audit and risk managers share responsibilities for
governance and compliance for the organization.
B. ERM is all encompassing and if not controlled will absorb internal
audit functions.
C. The Institute of Internal Auditors (IIA) guidelines are used to avoid
confusion in an organization and clarify financial compliance issues.
D. Clarification o - ✔✔✔ Correct Answer > D
Which one of the following describes the role of internal audit
according to the Federation of European Risk Management
Associations (FERMA) and the European Commission of Institutes of
Internal Audit (ECIIA) model?
A. Internal audit is the first line of defense providing the original risk
assessment, control environment as well as maintaining effective
internal controls.
B. Internal audit is the second line of defense providing support for the
implementation of controls, particularly with law a - ✔✔✔ Correct
Answer > C
Which one of the following best describes how internal audit supports
enterprise risk management (ERM)?
A. ERM provides the assessments that internal audit uses to test the
viability of controls.
B. Internal audit implements the risk assessments provided by ERM.
,C. ERM implements risk management activities and internal audit
assesses the results.
D. Internal audit finds risks overlooked by ERM. - ✔✔✔ Correct
Answer > C
Many banks are using technology to search for and detect cyber-
security threats locally and in the cloud. This application of technology,
in which machines learn from humans, illustrates the use of
A. Machine learning.
B. Data analytics.
C. Artificial intelligence.
D. Risk management information systems. - ✔✔✔ Correct Answer >
C
Which one of the following best describes how the modern approach to
internal auditing differs from the traditional approach?
A. The modern approach uses a systems-based technique, evaluating
current controls and threats to the organization, and considers the
materiality of risks, but does not consider an organization's business
objectives.
B. The modern approach uses many systems-based techniques,
determines activity based on the organization's business objectives,
materiality of the risk and k - ✔✔✔ Correct Answer > B
, Emerging technologies such as artificial intelligence and machine
learning are being applied by some businesses as part of their internal
audit and control process. A key benefit of such applications is
A. Reduced labor costs in the risk management department.
B. Gaining an historical perspective on inefficient and ineffective
internal control measures.
C. Detection of fraud and inefficient practices in real time.
D. Greater ability to quantify losses. - ✔✔✔ Correct Answer > C
The Committee of Sponsoring Organizations of the Treadway
Commission's (COSO's) Internal Control—Integrated Framework
provides
A. Guidance on assessing risk and evaluating internal controls to
government agencies but not to other organizations.
B. Common standards designed to increase effectiveness and efficiency
of operations and reliability of financial reporting while ensuring
compliance with applicable laws and regulations.
C. International standards to help ensure that organizations meet -
✔✔✔ Correct Answer > B
Which one of the following best describes why the Institute for Internal
Auditors (IIA) has designed standards addressing the need for internal
audit to evaluate the effectiveness of risk management?
A. Audits are objective and independent of the politics of an
organization. A pronouncement assists the auditor by defining review
criteria.
EXAM COMPREHENSIVE QUESTIONS
AND VERIFIED ANSWERS GRADED A+ |
100% PASS | 2025 UPDATE!
Which one of the following best describes why many purchasers
require an ISO 9001 certification prior to buying a business?
A. To have an outside audit company attest to its conclusive audit.
B. To ensure that internal standards and controls are in place.
C. To transfer liability should the financial statements prove erroneous.
D. To obligate the seller to perform audits for conformance prior to the
sale. - ✔✔✔ Correct Answer > B
A municipal water plant installed water flow sensors and water
pressure sensors on the water pipes leaving the plant. The sensors
make sure water is flowing properly and that there are no leaks or clogs
which could produce a loss. These types of sensors are
A. Thermal sensors.
B. Mechanical sensors.
C. Biochemical sensors.
D. Radiant sensors. - ✔✔✔ Correct Answer > B
,It is necessary to define functions that should be performed by internal
audit rather than the enterprise risk management (ERM) team because
A. Internal audit and risk managers share responsibilities for
governance and compliance for the organization.
B. ERM is all encompassing and if not controlled will absorb internal
audit functions.
C. The Institute of Internal Auditors (IIA) guidelines are used to avoid
confusion in an organization and clarify financial compliance issues.
D. Clarification o - ✔✔✔ Correct Answer > D
Which one of the following describes the role of internal audit
according to the Federation of European Risk Management
Associations (FERMA) and the European Commission of Institutes of
Internal Audit (ECIIA) model?
A. Internal audit is the first line of defense providing the original risk
assessment, control environment as well as maintaining effective
internal controls.
B. Internal audit is the second line of defense providing support for the
implementation of controls, particularly with law a - ✔✔✔ Correct
Answer > C
Which one of the following best describes how internal audit supports
enterprise risk management (ERM)?
A. ERM provides the assessments that internal audit uses to test the
viability of controls.
B. Internal audit implements the risk assessments provided by ERM.
,C. ERM implements risk management activities and internal audit
assesses the results.
D. Internal audit finds risks overlooked by ERM. - ✔✔✔ Correct
Answer > C
Many banks are using technology to search for and detect cyber-
security threats locally and in the cloud. This application of technology,
in which machines learn from humans, illustrates the use of
A. Machine learning.
B. Data analytics.
C. Artificial intelligence.
D. Risk management information systems. - ✔✔✔ Correct Answer >
C
Which one of the following best describes how the modern approach to
internal auditing differs from the traditional approach?
A. The modern approach uses a systems-based technique, evaluating
current controls and threats to the organization, and considers the
materiality of risks, but does not consider an organization's business
objectives.
B. The modern approach uses many systems-based techniques,
determines activity based on the organization's business objectives,
materiality of the risk and k - ✔✔✔ Correct Answer > B
, Emerging technologies such as artificial intelligence and machine
learning are being applied by some businesses as part of their internal
audit and control process. A key benefit of such applications is
A. Reduced labor costs in the risk management department.
B. Gaining an historical perspective on inefficient and ineffective
internal control measures.
C. Detection of fraud and inefficient practices in real time.
D. Greater ability to quantify losses. - ✔✔✔ Correct Answer > C
The Committee of Sponsoring Organizations of the Treadway
Commission's (COSO's) Internal Control—Integrated Framework
provides
A. Guidance on assessing risk and evaluating internal controls to
government agencies but not to other organizations.
B. Common standards designed to increase effectiveness and efficiency
of operations and reliability of financial reporting while ensuring
compliance with applicable laws and regulations.
C. International standards to help ensure that organizations meet -
✔✔✔ Correct Answer > B
Which one of the following best describes why the Institute for Internal
Auditors (IIA) has designed standards addressing the need for internal
audit to evaluate the effectiveness of risk management?
A. Audits are objective and independent of the politics of an
organization. A pronouncement assists the auditor by defining review
criteria.
