Internal Audit Practitioner (IAA-IAP) Free Practice Test

Question 1

Information collected and documented in audit workpapers should be sufficient to:

A. Allow the work to be repeated and achieve the same results that logically lead to the same conclusion.

B. Support engagement observations and be consistent with engagement objectives.

C. Confirm that management has effectively implemented recommended actions to resolve all identified control weaknesses.

Correct Answer: B

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Question 2

Duties in a purchasing system are segregated and performed by different people. One person orders the goods, another person receives the goods, and another pays for the goods. This is an example of which of the following controls?

A. Preventive

B. Directive

C. Detective

Correct Answer: A

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Question 3

The internal audit activity has been tasked with evaluating the effectiveness of the organization's risk management processes. Which of the following activities are appropriate and relevant to consider in the overall evaluation?

A. Evaluation of risk management effectiveness obtained during multiple audit engagements over the past year

B. An external audit of the organization's corporate social responsibility and sustainability management, including communication of findings to management and the board

C. The chief audit executive's observations of the organization's finance committee

Correct Answer: A

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Question 4

Which of the following best demonstrates that appropriate and sufficient resources were allocated to an audit engagement to achieve its objectives?

A. Approved engagement work program.

B. Staff skills audit.

C. Post-engagement survey of management of the audited area.

Correct Answer: A

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Question 5

Which of the following conditions involving the chief audit executive (CAE) is most likely to impair the independence of the internal audit activity?

A. The CAE reports directly to the controller for the organization, and the internal audit activity resides in the office of the comptroller.

B. The CAE has direct access to records, personnel, and physical properties throughout the organization.

C. The CAE regularly attends and participates in critical executive management meetings for the organization.

Correct Answer: A

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Question 6

Which of the following elements of the Fraud Triangle is directly under the organization's control?

A. Rationalization

B. Pressure

C. Opportunity

Correct Answer: C

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Question 7

An internal auditor wants to use computerized audit tools and techniques. Which of the following is a common obstacle that the auditor is likely to face?

A. Difficulty obtaining access privileges to relevant and reliable data.

B. Difficulty getting the requisite IT personnel to conduct the tests.

C. A lack of specialist IT skills needed to use the tools.

Correct Answer: A

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Question 8

Which of the following statements is appropriate to include in a high-quality internal audit engagement communication?

A. The internal audit team noted numerous weaknesses in the organization's internal controls over financial reporting. The team recommends that management determine the root cause of the weaknesses.

B. The internal audit team conducted a review of the financial reporting process prior to year-end. The overall findings have been provided for management's consideration prior to the completion of the organization's annual external financial audit.

C. The internal audit team conducted an engagement under the assumption that significant control weaknesses were likely. The purpose of the review was to uncover those weaknesses.

Correct Answer: B

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Question 9

Which of the following is considered an organization-level control, as opposed to process-level or transaction- level?

A. Supervision of finance employees, including day-to-day oversight and periodic performance evaluations.

B. Personnel policies requiring the employment of competent personnel, based on training and experience, to manage complex functions such as accounting and financial reporting.

C. Segregated budgeting responsibilities of finance employees, including review and approval of financial reports.

Correct Answer: B

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Question 10

A senior internal auditor is using a risk and control matrix to facilitate an internal control assessment of the fixed asset accounting process. Which of the following activities would aid the auditor in determining inputs for the risk and control matrix?

A. Reviewing the results of control effectiveness testing of the fixed asset capitalization subprocess.

B. Management's cost-benefit analysis of internal control alternatives considered in the design of the fixed asset accounting process.

C. Interviews with fixed asset management, control process walkthroughs, and internal control questionnaires.

Correct Answer: C

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IIA Internal Audit Practitioner (IAA-IAP) Free Practice Test