Internal Audit Practitioner (IIA-IAP) Free Practice Test

Question 1

During engagement planning, which of the following sources would provide the internal auditor with relevant information to obtain an understanding of the process under review?

A. Final report from an external financial audit of the process under review, which includes the status of management's corrective action plans

B. Mission, strategic objectives, and key performance indicators of the process under review, based on documented plans, policies, procedures, and discussions with management

C. The internal audit activity's annual audit plan and discussions that led to its development

Correct Answer: B

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Question 2

Management has decided that transactions less than $50 no longer require authorization. Which of the following risk management strategies does this represent?

A. Accept.

B. Avoid.

C. Reduce.

Correct Answer: A

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Question 3

According to IIA guidance, which of the following is the primary criterion that should determine the extent of supervision required for an audit engagement?

A. The proficiency of the internal auditors and the complexity of the engagement.

B. The number of hours approved by the board for that engagement.

C. Whether the engagement involves possible violations of laws and governmental regulations.

Correct Answer: A

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Question 4

Which of the following describes an internal auditor's use of external benchmarking?

A. The auditor evaluates operating income margin between geographical areas within an organization to analyze its profitability.

B. The auditor calculates the net profit margin for a business segment to analyze the profitability.

C. The auditor compares return on equity for a beverage company against its competitor to analyze profitability.

Correct Answer: C

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Question 5

An internal auditor is planning a business continuity audit engagement at a remote manufacturing plant. During planning interviews, the plant manager stated that the local Environmental, Health, and Safety (EHS) Department, which reports to the plant manager, had completed a similar review six months ago. The EHS review did not find any significant weaknesses. How should the internal auditor consider the EHS review results in the current audit engagement planning?

A. Evaluate the objectivity and competency of the EHS reviewers and their work to determine whether their review results may be relied upon.

B. Ignore the EHS review results, as the department is not a reliable source of information due to its lack of objectivity and independence.

C. Recommend canceling the audit engagement, as it would be a duplication of effort to revisit the same process already reviewed by EHS.

Correct Answer: A

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Question 6

Which of the following internal auditor attributes benefits the most from continuous professional development?

A. Competency.

B. Objectivity.

C. Integrity.

Correct Answer: A

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Question 7

To be organizationally independent, the chief audit executive should administratively report to which of the following?

A. The board of directors.

B. The audit committee.

C. The chief executive officer.

Correct Answer: C

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Question 8

Management requested that the chief audit executive (CAE) include an audit of the organization's health and safety program in next year's annual audit plan. However, the internal audit activity has no expertise in this area. Which of the following would be the most appropriate actions for the CAE?

A. With management's agreement, amend the audit scope so that specialized expertise is not needed.

B. Work with an internal subject matter expert to complete the audit.

C. Accept the request, provided management has conducted a thorough risk assessment prior to the engagement to help guide the audit.

Correct Answer: B

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