Practice of Internal Auditing
Last Update Nov 30, 2025
Total Questions : 747
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Which of the following actions should the internal audit activity take during an audit engagement when examining the effectiveness of risk management processes?
Besides a chief audit executive's professional experience what determines the frequency and approach to assessing residual risk?
Which of the following statements concerning workpapers is the most accurate?
Which of the following best describes the risk contained in an initial public offering for a new stock?
Which of the following information is most appropriate for the chief audit executive to share when coordinating audit plans with other internal and external assurance providers?
Which type of assurance engagement is conducted to determine whether a process or area is performing as intended, accomplishing its objectives, and doing so in an efficient and economical way?
Which of the following should management action plans include at a minimum?
An internal audit team leader is having difficulties completing the planning phase of an assurance engagement because the business unit lacks a system of internal controls. Which of the following is the most appropriate course of action for the internal audit team leader?
Which of the following items, included in the preliminary audit communication would be most useful for management to formulate action plans in response to audit recommendations?
An internal auditor observed that sales staff are able to modify or cancel an order in the system prior to shipping She wonders whether they can also modify orders after shipping. Which of the following types of controls should she examine?
The internal audit activity is responsible for which of the following actions related to an organization’s internal controls9
Internal audit staff lacks the expertise to perform a fraud investigation engagement stemming from a whistleblowing incident. Which of the following is the most appropriate
option for the chief audit executive?
The objective of an upcoming engagement is to review the wind park projects and assess compliance with established project management principles. Which of the following is most likely to be the aim of the engagement work program?
An organization's healthcare insurance costs have been rising approximately 10 percent per year for several years. Which of the following analytical review procedures would best evaluate the reasonableness of the increase in healthcare costs?
Which of the following approaches to understanding business processes is conducted from a broad organizational perspective and has the greatest risk of overlooking processes that are ultimately critical?
Which of the following best illustrates the primary focus of a risk-based approach to control self-assessment?
An internal auditor determines that certain information from the engagement results is not appropriate for disclosure to all report recipients because it is privileged. In this situation, which of the following actions would be most appropriate?
An internal auditor discovered a control weakness that needs to be communicated to management. Which of the following is the best method for first communicating the weakness?
According to IIA guidance, which of the following should be a primary objective for an internal auditor who is conducting an exit conference?
If there is a significant error or omission in the final audit report that was communicated to management, which of the following is the key action for the internal audit activity?
It is close to the fiscal year end for a government agency, and the chief audit executive (CAE) has the following items to submit to either the board or the chief executive officer (CEO) for approval. According to IIA guidance, which of the following items should be submitted only to the CEO?
Which procedure should an internal auditor perform to determine the audit objective?
In which of the following situations would it be most appropriate for an internal audit function to issue an interim report or memo?
If the skills and competencies are not present within the internal audit activity to complete an ad-hoc assurance engagement, which of the following is an acceptable resolution?
Which of the following best describes the guideline for preparing audit engagement workpapers?
A chief audit executive (CAE) determined that management chose to accept a high-level risk that may be unacceptable lo the organization. Which is the best course of action for the CAE to Follow?
Which of the following statements best explains why an internal auditor should pay attention to retained earnings of an organization?
Which of the following processes does the board manage to ensure adequate governance?
Which of the following would help the internal audit activity assess compliance with the organization's standard operating procedures for bank deposits during a preliminary survey?
Which of the following documents are internal auditors most likely to be asked to sign as a demonstration of due professional care?
Which of the following actions should the chief audit executive take when senior management decides to accept risks by choosing to do business with a questionable vendor?
An internal auditor is performing testing to gather evidence regarding an organization's inventory account balance and is mindful of the possibility that the sample used might support the conclusion that the recorded account balance is not materially misstated when, in fact, it is The auditor's concern best describes which of the following risks?
According to IIA guidance, which of the following factors should the auditor in charge consider when determining the resource requirements for an audit engagement?
A snow removal company is conducting a scenario planning exercise where participating employees consider the potential impacts of a significant reduction in annual snowfall for the coming winter. Which of the following best describes this type of risk?
Which of the following is the advantage of using internal control questionnaires (ICQs) as part of a preliminary survey for an engagement?
An internal auditor believes that the internal audit activity's independence is impaired Which of the following actions should the internal auditor take first?
According to IIA guidance, which of the following accurately describes the responsibilities of the chief audit executive with respect to the final audit report?
1. Coordinate post-engagement conferences to discuss the final audit report with management.
2. Include management's responses in the final audit report.
3. Review and approve the final audit report.
4. Determine who will receive the final audit report.
Which of the following statements is true regarding managements use of judgement to design, implement, and conduct internal control?
Which of the following statements is true regarding internal control questionnaires?
During the planning phase of an assurance engagement, which of the following would an internal auditor use to assess and present the severity of the impact of identified risks?
During audit engagement planning, an internal auditor is determining the best approach for leveraging computer-assisted audit techniques (CAATs). Which of the following approaches maximizes the use of CAATs and why?
Which of the following best describes why an internal audit activity would consider sending written preliminary observations to the audit client?
Which of the following is an advantage of nonstatistical sampling over statistical sampling?
Which of the following is true regarding the communication of engagement results with stakeholders?
The internal audit function is performing an assurance engagement on the organization’s environmental, social, and governance (ESG) program. The engagement objective is to determine whether the ESG program’s activities are meeting the program’s established goals. The internal audit function has completed a risk and control assessment of the ESG program's activities. What is the appropriate next step?
Which of the following statements is true regarding internal auditors and other assurance providers?
As part of an audit engagement, an internal auditor verifies whether raw material is regularly delivered to the organization's warehouse in a timely manner. What type of objective does this exemplify?
Which of the following is an appropriate activity when supervising engagements?
Which statement best describes the benefit of using workpapers from recent internal audit engagements of the area under review to plan new engagements?
According to IIA guidance, which of the following statements is true regarding engagement planning?
As part of internal audit's assistance with an annual external audit, the internal auditors are required to do a preliminary analytical review of an bank account balances. This involves verifying the current year end balances as web as comparing the current year end balances with previous year end balances to highlight significant changes. Which of the following is the most reliable source for verification of the current year end bank balances?
According to IIA guidance, which of the following are the most important objectives for helping to ensure the appropriate completion of an engagement?
1. Coordinate audit team members to ensure the efficient execution of all engagement procedures.
2. Confirm engagement workpapers properly support the observations, recommendations, and conclusions.
3. Provide structured learning opportunities for engagement auditors when possible.
4. Ensure engagement objectives are reviewed for satisfactory achievement and are documented properly.
An internal auditor wants to determine if employees spend more than their approved daily stipend for meals. Which technique would be most appropriate to identify meal expenses that exceed the approved threshold?
A multinational organization has multiple divisions that sell their products internally to other divisions When selling internally, which of the following transfer prices would lead to the best decisions for the organization?
Which of the following statements generally true regarding audit engagement planning?
An internal auditor completed a review of expenses related to the launch of a new project. The auditor sampled 45 transactions approved by a senior project manager and identified 30 with questionable vendor documentation. Which of the following is the most appropriate conclusion for the auditor to include in the audit report?
When is an organic organizational structure likely to be more successful than a mechanistic organizational structure?
To compete in the global market, an organization is restructuring and consolidating many of its divisions. Prior to the consolidation, senior management requested assistance from tie internal audit activity. Which of the following consulting services would be most appropriate in this situation?
Which of the following audit steps would an internal auditor most likely be questioned on?
Which of the following behaviors could represent a significant ethical risk if exhibited by an organization's board?
1. Intervening during an audit involving ethical wrongdoing.
2. Discussing periodic reports of ethical breaches.
3. Authorizing an investigation of an unsafe product.
4. Negotiating a settlement of an employee claim for personal damages.
Which of the following best exemplifies having effective risk management and internal control processes?
For which of the following fraud engagement activities would it be most appropriate to involve a forensic auditor?
Which of the following constitutes supervisory activity undertaken during the planning phase of an assurance engagement?
Which of the following would be the most effective fraud prevention control?
Which of the following should be included in a company's year-end inventory valuation?
Which of the following best describes the guideline for preparing audit engagement workpapers?
A chief audit executive (CAE) following up on action plans from previously completed audits identifies that management has determined that certain action plans are no longer necessary If the CAE disagrees with managements decision, which of the following is the most appropriate next step for the CAE to take?
Some lime after the final audit report was issued, the engagement supervisor teamed that several internal control deficiencies were not remedied, despite management's previous agreement to remedy them According to IIA guidance, which of the following is the most appropriate response'5
Which of the following statements describes an engagement planning best practice?
An internal auditor completed a test of 30 randomly selected accounts. For five of the accounts selected, the auditor was unable to find supporting documentation in the normal place of storage. Which of the following next steps would be most appropriate for the internal auditor to take?
An internal audit activity has to confirm the validity of the activities reported by a grantee that received a charitable contribution from the organization. Which of the following methods would best help meet this objective?
Which of the following is a detective control for managing the risk of fraud?
Which of the following analytical procedures should an internal auditor use to determine whether monthly expenses for the accounting department are reasonable?
An internal auditor is asked to determine why the production line for a large manufacturing organization has been experiencing shutdowns due to unavailable parts The auditor learns that production data used for generating automatic purchases via electronic interchange is collected on personal computers connected by a local area network (LAN) Purchases are made from authorized vendors based on both the production plans for the next month and an authorized materials requirements plan (MRP) that identifies the parts needed per unit of production. The auditor suspects the shutdowns are occurring because purchasing requirements have not been updated for changes in production techniques. Which of the following audit procedures should be used to test the auditor's theory?
According to the International Professional Practices Framework, which of the following is an appropriate reason for issuing an interim report?
To keep management informed of audit progress when audit engagements extend over a long period of time.
To provide an alternative to a final report for limited-scope audit engagements.
To communicate a change in engagement scope for the activity under review.
In which of the following situations would an internal auditor consider the need to outsource competencies and skills9
According to IIA guidance, which of the following is most likely to become part of the engagement work program?
The audit engagement objective is to identify vendors who might be involved in money laundering processes or tax evasion schemes. How would the internal auditor use data analytics to fulfill this objective?
Which of the following has the greatest effect on the efficiency of an audit?
The final engagement communication contains the following observation:
The internal auditor discovered that three of the 10 contracts reviewed failed to meet the organization's competitive bidding requirements Management explained that senior management deemed these purchases to be critical and awarded them as sole-source."
Which of the following components is missing in the documentation of the observation?
The internal audit function is in the fieldwork stage of the annual staff performance appraisal assurance engagement. A new auditor is hired and added to the engagement team. The auditor reviews the engagement work program with another member of the team and suggests improvements to make the fieldwork easier to complete. What action should be taken next?
According to the theory of constraints, which of the following is most influenced by various bottlenecks the organization encounters?
After concluding a preliminary assessment, the engagement supervisor prepared a draft work program According to HA guidance which of the following would be tested by this program?
An internal auditor is analyzing sates records and is concerned whether a transaction is recorded in the coned period. The accounting manager explains that the external auditor approved the records and produces an email from the external audit team leader. How should tie internal auditor respond?
An internal auditor is using attributes sampling to test internal controls. Under which of the following circumstances would the auditor increase the original sample size to estimate error occurrence at a given precision and confidence level?
A newly appointed chief audit executive (CAE) of a small organization is developing a resource management plan Which of the following approaches would be most beneficial to help the CAE obtain details of the Internal audit activity's collective knowledge skills, and other competencies?
An internal auditor is using computer-assisted audit techniques to examine employee expenses across several divisions of the organization. Which of the following is true in this situation?
An organization experiencing staff shortages wants to contract a temporary employee to assist with work in the accounting office. Which of the following controls should be in place to ensure the temporary employee performs the assigned work before payment is issued?
An internal auditor collected several employee testimonials Which of the following is the best action for the internal auditor to take before drawing a conclusion?
An audit observation noted that annual inventory counts of biofuel was not being performed appropriately Fuel yards were not visited and physical amounts of biofuel were not reconciled with accounting data Management of the division understood the issue and promised to resolve the problem When should the internal auditor schedule a follow-up review?
An internal auditor was assigned to review controls in the accounts payable function. Most of tie accounts payable processes are performed by a third-party service provider. The auditor included in the audit report a number of control deficiencies involving processes performed by the service provider. The service provider requested a copy of the report Which of Vie following would be the most appropriate response from the chief audit executive (CAE)?
An internal auditor is asked to determine why the production line for a large manufacturing organization has been experiencing shutdowns due to unavailable pacts The auditor learns that production data used for generating automatic purchases via electronic interchange is collected on personal computers connected by a local area network (LAN) Purchases are made from authorized vendors based on both the production plans for the next month and an authorized materials requirements plan (MRP) that identifies the parts needed per unit of production The auditor suspects the shutdowns are occurring because purchasing requirements have not been updated for changes in production techniques. Which of the following audit procedures should be used to test the auditor's theory?
When taken by a chief audit executive, which of the following actions would be most likely to prevent division management from exaggerating sales reports
1.Announcing a series of internal audit engagements focusing on compliance with corporate sales-reporting policies.
2.Asking the president and the board to issue a statement of corporate policy stressing the importance of accurate management reporting and the negative consequences of intentional misreporting
3.Setting up a hotline for employees to report fraudulent behavior anonymously.
4.Assisting the controller in developing and monitoring a series of business process indicators, which are historically correlated with, but independent of. sales.
An organization has a health and safety division that conducts audits to meet regulatory requirements. The chief health and safety officer reports directly to the CEO. Which of the following describes an appropriate role for the chief audit executive (CAE) with regard to the organization's health and safety program?
Prior to performing testing an internal auditor has determined that a primary process control failed due to design weakness. Which of the following actions should the auditor perform next?
Which of the followings statements describes a best practice regarding assurance engagement communication activities?
What is the primary objective of an engagement supervisor's review of key activities performed during the engagement?
Which of the following would be most useful for an internal auditor to obtain during the preliminary survey of an engagement on internal controls over user access management?
While reviewing the workpapers and draft report from an audit engagement, the chief audit executive (CAE) found that an Important compensating control had not been considered adequately by the audit team when it reported a major control weakness Therefore, the CAE returned the documentation to the auditor in charge for correction Based on this Information, which of the following sections of the workpapers most likely would require changes?
1.Effect of the control weakness.
2.Cause of the control weakness
3.Conclusion on the control weakness.
4.Recommendation for the control weakness.
What is the primary reason that audit supervision includes approval of the engagement report?
According to an internal audit observation, the organization’s rules of record management require all contracts to be registered and stored in a specific electronic system. One subsidiary has thousands of client contracts on paper, which are kept in the office because there are not enough assistants to scan the contracts into the system. Which of the following component should be added to this observation?
Senior IT management requests the internal audit activity to perform an audit of a complex IT area. The chief audit executive (CAE) knows that the internal audit activity lacks the expertise to perform the engagement. Which of the following is the most appropriate action for the CAE to take?
Which of the following is one of the five basic tnanoal statement assertions when an internal auditor evaluates controls over financial reporting?
A manufacturing organization specializes in the production of evaporated milk and breakfast cereals. The manufacturing processes create significant loss in the form of waste and byproducts. The provision for normal production loss is known to senior management, but little action is taken when abnormal production losses occur. The organization sells its production byproducts to fish farmers at a reduced price. The byproducts are a widely recognized and used product in the fish farming industry. The organization has a policy that also allows its employees to purchase the byproducts at a negligible price. Based on the above, which of the following risks should the internal audit function consider when planning an engagement of the production process?
According to the MA guidance, which of the following does the engagement work program test in a review of an organizational process?
An engagement team is being assembled to audit of one of the organization's vendors Which of the following statements best applies to this scenario?
The chief audit executive of an international organization is planning an audit of the treasury function located at the organization's headquarters. The current internal audit team at headquarters lacks expertise in the area of financial markets which is needed tor the engagement When of the following would be the most approbate solution considering the time constraint?
Which of the following manual audit approaches describes testing the validity of a document by following it backward to a previously prepared record?
An internal auditor is conducting an initial risk assessment of an audit area and wants to assess management's compliance with privacy laws for safeguarding customer information stored on the organization's servers. Which course of action is appropriate for this phase of the engagement?
Which of the following is most likely to be judged as a significant residual risk that would exceed the organization's acceptable risk level?
An internal auditor recommended that an organization implement computerized controls in its sales system in order to prevent sales representatives from executing contracts in excess of their delegated authority levels A follow-up review found that the sales system had not been modified, but a process had been implemented to obtain written approval by the vice president of sales for all contracts in excess of S1 million The chief audit executive (CAE) would be justified in reporting this situation to the organization's board under which of the tollowing circumstances'?
1. In the opinion of the CAE the level of residual risk assumed by senior management is too high
2. Testing of compliance with the new process finds that all new contracts in excess of $1 million have been approved by the vice president of sales
3. The cost of modifying the sales system to include a preventive control is less than S100.000
When addressing the excessive overtime being paid lo employees in an organization's customer service call center, which of the following would be most relevant for the internal auditor to use?
1 Confirmation.
2. Trend analysis.
3 External benchmarking
4. Internal benchmarking
Who is responsible for ensuring internal auditors continuing professional development*
Which of the following activities demonstrates an example of the chief audit executive performing residual risk assessment?
In preparing the engagement work program, which of the following is generally true with respect to secondary controls?
Where should internal auditor focus their attention when identify and assessing key risks during the planning stage of an assurance engagement?
Following an IT systems audit, management agreed to implement a specific control in one of the IT systems. After a period, the internal auditor followed up and learned that management had not implemented the agreed management action due to the decision to move to another IT system that has built-in controls, which may address this risks highlighted by the Internal audit Which of the following Is the most appropriate action to address the outstanding audit recommendation?
An internal auditor for a regional bank suspects that the head of commercial lending has been granting loans without the required collateral Which of the following sampling techniques will be most effective for investigating the auditor's suspicion?
What information would be most useful to an internal auditor who is attempting to identify specific processes to include in the scope of an assurance engagement?
Management asks the chief audit executive (CAE) to allocate an internal auditor as a non-voting member of a steering committee. The committee will oversee the implementation of a significant and confidential acquisition. Which of the following should guide the CAE’s selection?
Which of the following risk assessment approaches involves gathering data from work team representing different levels of an organisation?
When a significant finding is noted early during a review of the accounts payable function, which next course of action is best for communicating the issue?
An internal auditor is performing a review of an organization's vendor for any possible conflicts of interest. Which of the following would provide the greatest assistance to the auditor in meeting this objective?
A toy manufacturer receives certain components from an overseas supplier and uses them to assemble final products Recently quality reviews have identified numerous issues regarding the components' compliance with mandatory quality standards. Which type of engagement would be most appropriate to assess the root causes of the quality issues?
Which of the following is most likely the subject of a periodic report from the chief audit executive to the board?
The chief audit executive (CAE) should determine whether the internal audit activity has confirmed the status of all of management's corrective actions Doing so would help the CAE assess which of the following?
An organization's internal audit plan includes a recurring assurance review of the human resources (HR) department. Which of the following statements is true regarding preliminary communication between the auditor in charge (AIC) and the HR department?
1. The AIC should notify HR management when the draft audit plan is being developed, as a courtesy.
2. The AIC should notify HR management before the planning stage begins.
3. The AIC should schedule formal status meetings with HR management at the start of the engagement.
4. The AIC should finalize the scope of the engagement before communicating with HR management.
Which of the following steps should an internal auditor complete when conducting a review of an electronic data interchange application provided by a third-party service?
1.Ensure encryption keys meet ISO standards.
2.Determine whether an independent review of the service provider's operation has been conducted.
3.Verify that the service provider's contracts include necessary clauses.
4.Verify that only public-switched data networks are used by the service provider
A customer has supplied personal information to a bank to facilitate opening an account. The bank is part of a larger group of companies with core businesses including general insurance, life insurance, and investment products. Considering that the customer has closed his only account with the bank and the statutory data retention period has elapsed, which of the following actions by the bank is most likely to align with appropriate data privacy principles?
The chief audit executive (CAE) of a small internal audit activity (IAA) plans to test conformance with the Standards through a quality assurance review. According to the Standards, which of the following are acceptable practice for this review?
1. Use an external service provider.
2. Conduct a self-assessment with independent validation.
3. Arrange for a review by qualified employees outside of the IAA.
4. Arrange for reciprocal peer review with another CAE.
While planning for an accounts payable audit an internal auditor performs an entity level controls analysis. Which of the following statements is true regarding me approach used by the auditor?
An internal auditor reviewed bank reconciliations prepared by management of the area under review. The auditor noted that the bank statements attached did not have the
bank heading, logo, or address. Which of the following statements is true regarding this situation?
Which of the following is the best audit procedure to obtain evidence of an organization's legal ownership of a new property?
An auditor reviews tender results for the procurement of construction equipment. Based on her significant experience the auditor believes that the obtained bid prices are too high. Which of the following is required to develop a relevant conclusion?
Which of the following structures would best suit a maintenance organization that needs to adapt quickly to rapidly changing technology?
Which of the following is most appropriate for internal auditors to do during the internal audit recommendations monitoring process?
During a review of the treasury function an internal auditor identified a risk that all bank accounts may net to include in the daily reconciliation process.
Which of the following responses would be most effective to mitigate this risk?
Which of the following parties is accountable for ensuring adequate support for conclusions and opinions readied by the internal audit activity while relying on external auditors' work?
An internal auditor is conducting an assurance engagement. One engagement objective is to evaluate the project manager’s effectiveness at controlling project costs. Which of the following audit tests should be included in the engagement program?
Which of the following is a primary reason for an internal auditor to use a risk and control questionnaire when auditing financial processes?
A large retail organization, which sells most of its products online, experiences a computer hacking incident. The chief IT officer immediately investigates the incident and concludes that the attempt was not successful. The chief audit executive (CAE) learns of the attack in a casual conversation with an IT auditor. Which of the following actions should the CAE take?
1. Meet with the chief IT officer to discuss the report and control improvements that will be implemented as a result of the security breach, if any.
2. Immediately inform the chair of the audit committee of the security breach, because thus far only the chief IT officer is aware of the incident.
3. Meet with the IT auditor to develop an appropriate audit program to review the organization's Internet-based sales process and key controls.
4. Include the incident in the next quarterly report to the audit committee.
An internal audit activity is planning its first audit of IT shared services. Which of the following controls would typically be evaluated first?
Which of the following engagement techniques would be best to meet the objective of denting a personal conflict -of -interest situation affecting an organization’s procurement function?
During the filework phase of an assurance engagement the internal auditor decides that she wants to adjust the audit work program. Which of the following is the most appropriate next step for the auditor to take9
Which of the following is most likely to be considered a control weakness?
To effectively communicate the acceptance of risk in an organization a chief audit executive must first consider which of the following?
Which of the following statements is true regarding an organization’s inventory valuation?
Which of the following is an example of a properly supervised engagement?
The only internal auditor, who was part of a larger team of individuals trained in the testing and reading of the organization’s quality control equipment, has resigned. With a scheduled audit of the quality department not yet completed for this year, what alternative approach should the internal audit function take in this scenario?
According to IIA guidance, which of the following statements is true regarding audit workpapers?
An internal audit function described scenarios of fraud indicators and fraud-related key words. The objective is for this data to serve as an input into algorithms that will forecast potentially fraudulent behavior and prevent the execution of flagged transactions. Which of the following analytic methods is the internal audit function most likely developing?
Which of the following is an example of a properly supervised engagement?
With regard to project management, which of the following statements about project crashing is true?
During the planning phase of an assurance engagement, the internal audit engagement team identifies and evaluates the inherent fraud risks within the procurement function. What should be the engagement team’s next step?
Internal auditors map a process by documenting the steps in the process, which provides a framework for understanding. Which of the following is a reason to use narrative memoranda?
An internal auditor is conducting a preliminary survey of the investments area, and sends an internal control questionnaire to the management of the function. (An extract of the survey is provided below).
1. Are there any restrictions for any company's investments?
2. Are there any written policies and procedures that document the flow of investment processing?
3. Are investment purchases recorded in the general ledger on the date traded?
4. Is the documentation easily accessible to an persons who need in to perform their job?
Which of the following is a drawback of testing methods like this?
An organization facing financial hardships is planning to reduce its internal audit function size without a reduction in workload. The organization plans to aid internal auditors by providing a generative artificial intelligence application that will process written responses from the activity under review to identify high-risk areas on which the remaining auditors will concentrate. Which of the following would be the most significant concern in this process?
Which of the following represents a ratio that measures short term debt-paying ability?
While auditing an organization's credit approval process, an internal auditor learns that the organization has made a large loan to another auditors relative. Which course of action should the auditor take?
Which of the following would most likely be found in an organization that uses a decentralized organizational structure?
A bakery chain has a statistical model that can be used to predict daily sales at individual stores based on a direct relationship to the cost of ingredients used and an inverse relationship to rainy days What conditions would an auditor look for as an Indicator of employee theft of food from a specific store?
According to IIA guidance, which of the following statements are true regarding the internal audit plan?
1. The audit plan is based on an assessment of risks to the organization.
2. The audit plan is designed to determine the effectiveness of the organization's risk management process.
3. The audit plan is developed by senior management of the organization.
4. The audit plan is aligned with the organization's goals.
Which of the following resources would be most effective for an organization that would like to improve how it informs stakeholders of its social responsibility performance?
According to the Standards, which of the following is leastimportant in determining the adequacy of an annual audit plan?
Which of the following is a true statement regarding the use of flowcharts as an audit tool?
Which of the following factors would the auditor in charge be least likely to consider when assigning tasks to audit team members for an engagement?
A chief audit executive (CAE) received a detailed internal report of senior management's internal control assessment. Which of the following subsequent actions by the CAE would provide the greatest assurance over management's assertions?
An internal auditor is starting the fieldwork of an assurance engagement. The auditor will conduct a walkthrough of selected controls with control owners. What should be the primary objective of this walkthrough?
Which of the following is the most important concept to be included in a consulting engagement agreement?
In the years after the mid-service point of a depreciable asset, which of the following depreciation methods will result in the highest depreciation expense?
An internal auditor accessed accounts payable records and extracted data related to fuel purchased tor the organization's vehicles As a first step, she sorted the data by vehicle and used spreadsheet functions to identify all instances of refueling on the same or sequential dates She then performed other tests Based on the auditor's actions which of the following is most likely the objective of this engagement1?
Which of the following situations is most critical for the chief audit executive to report to the board?
Due to emerging new technologies that greatly affect the organization, the chief audit executive (CAE) wants to conduct frequent IT audit and is particularly focused on improving the quality of these engagements. Which of the following is the most viable solution for the CAE to ensure that IT audit quality is immediately enhanced and maintained long-term?
Which of the following is the most appropriate reason for a chief audit executive to conduct an external assessment more frequently than five years?
According to IIA guidance, which of the following statements about analytical procedures is true?
Which of the following best describes the four components of a balanced scorecard?
Which of the following statements is true regarding the chief audit executive's (CAT$) responsibilities after completing an assurance or consulting engagement?
Which of the following is a disadvantage of using flowcharts during a risk assessment?
Which of the following is essential for ensuring that the internal audit activity's findings and recommendations receive adequate consideration?
During an audit of the human resources department, an internal auditor adopts benchmarking to test the employee turnover rate. How should the internal auditor apply this technique?
An internal auditor discovered that sales contracts with business clients were not stored in the electronic document management database instead they were scanned and saved in a nonsystematic manner to server folders Which of the following would be an appropriate consequence for the internal auditor to include in the documented observation?
An internal auditor selects a sample of paid invoices and matches them to receiving reports. What is the most likely purpose for this procedure?
An internal auditor of a construction organization found that completed inspection results, required by the organization's policy, were missing from the computer system. Which of the following, if included in the audit report, would demonstrate that the auditor performed a root cause analysis of this observation?
The internal audit activity has requested that new vendor information be summarized once per week in a single report, and that all invoices each week for these vendors be automatically flagged in the invoice processing system. Which of the following computerized audit techniques is the internal audit activity most likely applying?
Which of the following statements about including consulting engagements in the annual internal audit plan is true?
Which of the following should an internal auditor document to support an assurance engagement’s conclusions?
In which of the following populations would the internal auditor most likely choose to use a stratified sampling approach?
Which of the following statements accurately describes the Standards requirement for ret internal audit records?
Which of the following factors would be the most critical in determining which engagements should be included in the annual internal audit plan?
The audit manager asked the internal auditor to perform additional testing because several irregularities were found in the financial information. Which of the following would be the most appropriate analytical review for the auditor to perform?
Which of the following would present the most critical external risk to an organization?
During a consulting engagement an internal auditor wants to determine whether all principal stakeholders are involved in a project. Which tool should the auditor use?
An internal auditor is preparing for an auditor of newly implemented software that is used by 3,000 employees in South America and Europe. What would be the best way for the auditor to gather relevant feedback?
According to IIA guidance, which of the following is least likely to be a key financial control in an organization's accounts payable process?
Which of the following statements is true regarding the use of internal control questionnaires (ICOs)?
After completing an assurance engagement, the chief audit executive (CAE) concludes that management has accepted a level of risk that may be unacceptable to the
organization. What is the most appropriate first step for the CAE to take?
Which of the following best describes how an internal auditor would use a flowchart during engagement planning?
The audit plan of an internal audit function includes an assurance engagement of the organization’s cybersecurity protocols. However, the engagement supervisor assigned to execute the engagement identifies that the internal auditors with competencies in cybersecurity are scheduled for upcoming leave and are involved in other engagements. Those auditors would not be available to participate in the cybersecurity engagement. Which of the following would be the appropriate action for the engagement supervisor?
A manager has allowed a subordinate employee to have greater control and responsibility over the tasks that he performs This is an example of which of the following?
An internal audit team was conducting an assurance engagement to review segregation of duties in the purchasing function. The internal auditors reviewed a sample of purchase orders from the past two year and discovered that 2 percent were signed by employees who were operating in a designated acting capacity due to employee absence. According to IIA guidance, which of the following attributes of information would most likely assist the auditor in deciding whether to report this finding?
According to IIA guidance, which of re following actions should the internal auditor take immediately after having considered fraud scenarios and identified and prioritized fraud risks?
An accounts payable clerk has recently transferred into the internal audit activity and has been assigned to an engagement related to accounts payable processes for which he was previously responsible Which of the following is the best action for the new internal auditor to take?
Which of the following steps should an internal auditor complete when conducting a review of an electronic data interchange application provided by a third-party service?
Ensure encryption keys meet ISO standards.
Determine whether an independent review of the service provider's operation has been conducted.
Verify that the service provider’s contracts include necessary clauses.
Verify that only public-switched data networks are used by the service provider.
According to IIA guidance, which of the following is true regarding the exit conference for an internal audit engagement?
Which of the following best describes the internal audit activity's responsibility within a risk and control framework?
A company makes a product at a cost of $26 per unit, of which $10 is fixed cost. The product is usually sold for $30 per unit; however, the company has been approached by a new customer who would like to purchase 3,500 units for $18 each Further, the company would Incur additional cost to deliver the units to this customer If the company has the excess manufacturing capacity and all other factors are constant, what is the additional cost that the company would Incur in order to make a profit of $1.50 per unit for this order?
Organizations that adopt just-in-time purchasing systems often experience which of the following?
Senior management is challenging regulatory fines that were assessed to the organization due to questionable business practices. Their actions and the fines could have an adverse effect on the organization's ability to continue business. How would the chief audit executive respond?
An audit observation states the following:
"Despite the rules of the organization there is no approved credit risk management policy in the subsidiary. The subsidiary is concluding contacts with clients who have very high credit ratings. The internal audit team tested 50 contacts and 17 showed clients with a poor credit history"
Which of the following components are missing in the observation?
An internal auditor is testing the success of the IT support department in meeting the service levels guaranteed to small, medium and large customers. The customer's size classification is based on its annual expenditures with the organization and the nature and extent of services it receives. Which of the following sampling techniques would be the most suitable to select customers for this test?
Which of the following data analysis techniques is used to identify inappropriately matching values, such as names, addresses, and account numbers in disparate systems?
Which of the following is critical to the success of an effective interview?
A chief audit executive (CAE) is determining which engagements to include on the annual audit plan. She would like to consider the organization's attitude toward risk and the degree of difficulty in achieving objectives. Which of the following resources should the CAE consult?
The chief audit executive can illustrate the value of the internal audit activity by reporting which of the following to the board?
Which of the following offers the best explanation of why the auditor in charge would assign a junior auditor to complete a complex part of the audit engagement?
At a construction company, an internal auditor is planning an audit of the company's process for designing and building grid connections The process involves customers making payments m three parts
• The first payment of 10% after approval of the customer s application
• The second payment of 70% prior to construction
• The third payment of 20% after construction is complete
Which of the following key controls should the auditor test to ensure that the company is not taking any unwanted credit risks?
Which of the following should be described in the recognition element of a typical internal audit repot?
Which method of examining entity-level controls involves gathering information from work groups that represent different levels in an organization?
TESTED 30 Nov 2025
