Internal Audit Function
Last Update Mar 1, 2026
Total Questions : 514
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Which of the following is a distinguishing feature of managerial accounting, which is not applicable to financial accounting?
Which of the following best describes the primary objective of cybersecurity?
An internal auditor found the following information while reviewing the monthly financial statements for a wholesaler of safety glasses: Opening inventory: 1,000 units at $2 per unit; Purchased: 5,000 units at $3 per unit; Sold: 3,000 units at $7 per unit. The cost of goods sold was reported at $8,500. Which of the following inventory methods was used to derive this value?
Which component of an organization's cybersecurity risk assessment framework would allow management to implement user controls based on a user's role?
According to IIA guidance on IT, which of the following best describes a situation where data backup plans exist to ensure that critical data can be restored at some point in the future, but recovery and restore processes have not been defined?
Which of the following storage options would give the organization the best chance of recovering data?
In an organization that produces chocolate, the leadership team decides that the organization will open a milk production facility for its milk chocolate. Which of the following strategies have the organization chosen?
Following an evaluation of an organization's IT controls, an internal auditor suggested improving the process where results are compared against the input. Which of the following IT controls would the Internal auditor recommend?
A newly hired chief audit executive (CAE) reviews and will revise the existing internal audit strategy. What should the CAE initially refer to when revising the internal audit strategy?
When evaluating the help desk services provided by a third-party service provider which of the following is likely to be the internal auditor's greatest concern?
An internal auditor uses a risk and control questionnaire as part of the preliminary survey for an audit of the organization's anti-bribery and corruption program. What is the primary purpose of using this approach?
Which of the following statements is true regarding user-developed applications (UDAs)?
Management has decided to change the organizational structure from one that was previously decentralized to one that is now highly centralized. As such: which of the
following would be a characteristic of the now highly centralized organization?
Which of the following biometric access controls uses the most unique human recognition characteristic?
Which of the following best describes a potential benefit of using data analyses?
Which of the following actions should an internal auditor take to clean the data obtained for analytics purposes?
Which of the following should be established by management during implementation of big data systems to enable ongoing production monitoring?
The finance department of an organization recently undertook an asset verification exercise. The internal audit function scheduled a review of the IT department’s operations, which includes verifying the existence of computers distributed and their assignment. Can the internal audit function consider relying on the asset verification work performed by the finance department?
A small chain of grocery stores made a reporting error and understated its ending inventory. What effect would this have on the income statement for the following year?
Which of the following is a primary driver behind the creation and prioritization of new strategic initiatives established by an organization?
An organization with global headquarters in the United States has subsidiaries in eight other nations. If the organization operates with an ethnocentric attitude, which of the following statements is true?
During an internal audit engagement, it was found that several vendors were on a government sanctions list and must no longer be traded with. Which of the following would most effectively mitigate the risk of noncompliance with sanctions lists that are updated regularly?
Which of the following attributes of data is the most significantly impacted by the internet of things?
According to Maslow's hierarchy of needs theory, which of the following would likely have the most impact on retaining staff, if their lower-level needs are already met?
A chief audit executive (CAE) is calculating the available internal audit resource hours while planning the annual internal audit plan. The CAE needs to calculate the total number of hours available for audits. Which of the following should be deducted in order to have time available only for engagements?
Which type of bond sells at a discount from face value, then increases in value annually until it reaches maturity and provides the owner with the total payoff?
Senior management is trying to decide whether to use the direct write-off or allowance method for recording bad debt on accounts receivables. Which of the following would be the best argument for using the direct write-off method?
Which of the following statements distinguishes a router from a typical switch?
Which of the following networks is suitable for an organization that has operations In multiple cities and countries?
Internal auditors want to increase the likelihood of identifying very small control and transaction anomalies in their testing that could potentially be exploited to cause material breaches. Which of the following techniques would best meet this objective?
Upon completing a follow-up audit engagement, the chief audit executive (CAE) noted that management has not implemented any mitigation measures to address the high risks that were reported in the initial audit report. What initial step must the CAE take to address this situation?
When examining; an organization's strategic plan, an internal auditor should expect to find which of the following components?
According to IIA guidance, which of the following statements is true regarding communication of engagement results?
How can the chief audit executive best provide the internal audit function with the resources needed to fulfill the annual audit plan?
Which of the following contract concepts is typically given in exchange for the execution of a promise?
An organization's technician was granted a role that enables him to prioritize projects throughout the organization. Which type of authority will the technician most likely be exercising?
Which of the following would be the best method to collect information about employees' job satisfaction?
Which of the following is an example of a smart device security control intended to prevent unauthorized users from gaining access to a device’s data or applications?
With regard to project management, which of the following statements about project crashing Is true?
According to 11A guidance on IT, which of the following are indicators of poor change management?
1. Inadequate control design.
2. Unplanned downtime.
3. Excessive troubleshooting .
4. Unavailability of critical services.
Which of the following concepts of managerial accounting is focused on achieving a point of low or no inventory?
An internal auditor is reviewing results from software development integration testing. What is the purpose of integration testing?
Which of the following capital budgeting techniques considers the tune value of money?
How can the concept of relevant cost help management with behavioral analyses?
Capital budgeting involves choosing among various capital projects to find the one(s) that will maximize a company's return on its financial investment. Which of the following parties approves the capital budget?
For which of the following scenarios would the most recent backup of the human resources database be the best source of information to use?
Which of the following would an organization execute to effectively mitigate and manage risks created by a crisis or event?
Which of the following represents an inventory costing technique that can be manipulated by management to boost net income by selling units purchased at a low cost?
Which of the following statements, is true regarding the capital budgeting procedure known as discounted payback period?
An investor has acquired an organization that has a dominant position in a mature, slow-growth industry and consistently creates positive financial income. Which of the following terms would the investor most likely label this investment in her portfolio?
Which of the following would be most likely found in an internal audit procedures manual?
Which of the following is the most appropriate way to record each partner’s initial investment in a partnership?
During the process of setting the annual audit plan, the chief audit executive receives a request from senior management to conduct an assurance engagement on the cybersecurity controls of the organization. Which of the following is a reason cybersecurity should be included in the annual internal audit plan?
An internal auditor is reviewing key phases of a software development project. Which of the following would; the auditor most likely use to measure the project team's performance related to how project tasks are completed?
Which of the following security controls would be me most effective in preventing security breaches?
Which of the following is the starting point for a chief audit executive to prioritize engagements to be included in the internal audit plan?
Which of the following is an advantage of a decentralized organizational structure, as opposed to a centralized structure?
Which of the following capital budgeting techniques considers the expected total net cash flows from investment?
Which of the following measures the operating success of a company for a given period of time?
The board and senior management agree to outsource the internal audit function. Which of the following is true regarding the company’s quality assurance and improvement program (QAIP)?
Which of the following is a security feature that Involves the use of hardware and software to filter or prevent specific Information from moving between the inside network and the outs de network?
Which of the following statements Is true regarding the use of centralized authority to govern an organization?
A chief audit executive wants to implement an enterprisewide resource planning software. Which of the following internal audit assessments could provide overall assurance on the likelihood of the software implementation's success?
Which of the following information security controls has the primary function of preventing unauthorized outside users from accessing an organization's data through the organization's network?
According to IIA guidance, whose input must be considered when developing the annual internal audit plan?
Which of the following controls refers to requiring employees to use a combination of PINs, passwords, and/or biometrics to access an organization's smart device apps and data?
An organization was forced to stop production unexpectedly, as raw materials could not be delivered due to a military conflict in the region. Which of the following plans have most likely failed to support the organization?
Based on lest results, an IT auditor concluded that the organization would suffer unacceptable loss of data if there was a disaster at its data center. Which of the following test results would likely lead the auditor to this conclusion?
To achieve conformance with the Global Internal Audit Standards, the chief audit executive must include which of the following activities in the quality assurance and improvement program (QAIP)?
Which of the following statements describes the typical benefit of using a flat organizational structure for the internal audit activity, compared to a hierarchical structure?
During the second half of the audit year, the chief audit executive (CAE) identified significant negative variances to the approved audit budget required to complete the internal audit plan. Which of the following actions should the CAE take?
During her annual performance review, a sales manager admits that she experiences significant stress due to her job but stays with the organization because of the high bonuses she earns. Which of the following best describes her primary motivation to remain in the job?
What is the first step an internal audit function should take to define its organizational structure, deliverables, communication protocols, and resourcing model?
Which of the following statements is true regarding the management-by-objectives method?
As it relates to the data analytics process, which of the following best describes the purpose of an internal auditor who cleaned and normalized data?
Which of the following forms of compensation best indicates that an organization’s cost-saving objectives have been targeted?
The chief audit executive (CAE) identified an unacceptable risk and believes that the risk is not being mitigated to an acceptable level. Which of the following is the CAE's next step in this situation?
An organization discovered fraudulent activity involving the employee time-tracking system. One employee regularly docked in and clocked out her co-worker friends on their days off, inflating their reported work hours and increasing their wages. Which of the following physical authentication devices would be most effective at disabling this fraudulent scheme?
An internal audit function has commenced its annual follow-up activity. An internal auditor has been assigned to verify whether the recommendations from an audit engagement completed three months ago were implemented by the business unit. The auditor had not participated in that audit engagement. What should the auditor do first?
Which of the following communication characteristics is achieved when the internal audit function avoids redundancies and excludes information that is unnecessary, insignificant, or unrelated to the engagement?
Which of the following purchasing scenarios would gain the greatest benefit from implementing electronic cate interchange?
Given the information below, which organization is in the weakest position to pay short-term debts?
Organization A: Current assets constitute $1,200,000; Current liabilities are $400,000
Organization B: Current assets constitute $1,000,000; Current liabilities are $1,000,000
Organization C: Current assets constitute $900,000; Current liabilities are $300,000
Organization D: Current assets constitute $1,000,000; Current liabilities are $250,000
Which of the following controls would be the most effective in preventing the disclosure of an organization's confidential electronic information?
Which of the following is true of bond financing, compared to common stock, when alJ other variables are equal?
Which of the following is the best example of a compliance risk that is likely to arise when adopting a bring-your-own-device (BYOD) policy?
Which of the following is an effective preventive control for data center security?
Which of the following assessments will assist in evaluating whether the internal audit function is consistently delivering quality engagements?
Which of the following statements is true regarding user developed applications (UDAs) and traditional IT applications?
According to IIA guidance, which of the following are typical physical and environmental IT controls?
The internal auditor concluded there was a high likelihood that a significant wind farm development, worth $200 million, would be delayed from its approved schedule. As a result, electricity production would not start on time, leading to considerable financial penalties. Which of the following should be added to the observation to support its clarity and completeness?
Which of the following describes a third-party network that connects an organization specifically with its trading partners?
Which of the following attributes of data analytics relates to the growing number of sources from which data is being generated?
An organization has a declining inventory turnover but an Increasing gross margin rate, Which of the following statements can best explain this situation?
An internal auditor reviewed Finance Department records to obtain a list of current vendor addresses. The auditor then compared the vendor addresses to a record of employee addresses maintained by the Payroll Department Which of the following types of data analysis did the auditor perform?
An organization selected a differentiation strategy to compete at the business level. Which of the following structures best fits this strategic choice?
Which of the following best describes a cyberattacK in which an organization faces a denial-of-service threat created through malicious data encryption?
Which of the following documents would provide an internal auditor with information on the length of time to maintain documents after the completion of an engagement?
As it relates to the data analytics process, which of the following best describes the purpose of an internal auditor who cleaned and normalized cate?
Which of the following techniques would best detect an inventory fraud scheme?
An IT auditor tested management of access rights and uncovered 48 instances where employees moved to a new position within the organization, but their former access rights were not revoked. System administrators explained that they did not receive information regarding employees’ new positions. Which of the following would be the best recommendation to address the root causes of the audit observation?
According to IIA guidance on IT, which of the following strategies would provide the most effective access control over an automated point-of-sale system?
A financial institution receives frequent and varied email requests from customers for funds to be wired out of their accounts. Which verification activity would best help the institution avoid falling victim to phishing?
The engagement supervisor prepares the final engagement communication for dissemination. Since the chief audit executive (CAE) is on leave, the supervisor is delegated to disseminate the final engagement communication to all relevant parties. Who should be accountable for the final engagement communication?
Which of the following is a result of Implementing on e-commerce system, which relies heavily on electronic data interchange and electronic funds transfer, for purchasing and biting?
An organization's board of directors is particularly focused on positioning, the organization as a leader in the industry and beating the competition. Which of the following strategies offers the greatest alignment with the board's focus?
An internal audit team performed an assurance engagement of the organization's IT security. The audit team found significant flaws in the design and implementation of the internal control framework. IT department managers often disagreed with the audit team on the significance of the findings, claiming that the controls in place partly mitigated the risks. Which of the following should be included when communicating the engagement results to senior management?
Which of the following types of date analytics would be used by a hospital to determine which patients are likely to require remittance for additional treatment?
Which of the following network types should an organization choose if it wants to allow access only to its own personnel?
An internal auditor discovered that the organization was not in full compliance with a regulatory labeling requirement for one of its products. The responsible manager indicated that the current product labeling has been in use for several years without any problems. If discovered, this regulatory breach could result in significant fines for the organization. What should be the chief audit executive's next course of action?
How should a chief audit executive learn about emerging risk areas in an organization?
Which of the following controls would an internal auditor consider the most relevant to reduce risks of project cost overruns?
Which observations should the chief audit executive include in the executive summary of the final engagement communication?
Internal audit observed an increase in defects of newly installed spare parts. An investigation revealed that vendors delivered spare parts of worse quality than required by contract. Which of the following recommendations would most helpfully mitigate this risk?
An internal auditor has requested the organizational chart in order to evaluate the control environment of an organization. Which of the following is a disadvantage of using the organizational chart?
An employee was promoted within the organization and relocated to a new office in a different building. A few months later, security personnel discovered that the employee's smart card was being used to access the building where she previously worked. Which of the following security controls could prevent such an incident from occurring?
Which of the following security controls would be appropriate to protect the exchange of information?
Which of the following job design techniques would most likely be used to increase employee motivation through job responsibility and recognition?
While performing an audit of a car tire manufacturing plant, an internal auditor noticed a significant decrease in the number of tires produced from the previous operating
period. To determine whether worker inefficiency caused the decrease, what additional information should the auditor request?
Which of the following is a benefit from the concept of Internet of Things?
The head of the research and development department at a manufacturing organization believes that his team lacks expertise in some areas and decides to hire more experienced researchers to assist in the development of a new product. Which of the following variances are likely to occur as the result of this decision?
Favorable labor efficiency variance
Adverse labor rate variance
Adverse labor efficiency variance
Favorable labor rate variance
According to IIA guidance, which of the following statements is true regarding the chief audit executive's (CAE’s) responsibility for following up on management action plans?
Which of the following characteristics applies to an organization that adopts a flat structure?
An organization suffered significant damage to its local: file and application servers as a result of a hurricane. Fortunately, the organization was able to recover all information backed up by its overseas third-party contractor. Which of the following approaches has been used by the organization?
According to IIA guidance, which of the following would be the best first stop to manage risk when a third party is overseeing the organization's network and data?
Which of the following security controls would provide the most efficient and effective authentication for customers to access these online shopping account?
The chief audit executive hired a consultant to update the internal audit function’s methodologies. Which of the following would best ensure that the internal audit function will adhere to the updated methodologies?
Employees at an events organization use a particular technique to solve problems and improve processes. The technique consists of five steps: define, measure, analyze,
improve, and control. Which of the following best describes this approach?
Which of the following types of data analytics would be used by a hospital to determine which patients are likely to require readmittance for additional treatment?
Which of the following organization structures would most likely be able to cope with rapid changes and uncertainties?
Which of the following business practices promotes a culture of high performance?
Which of the following lists best describes the classification of manufacturing costs?
A rapidly expanding retail organisation continues to be tightly controlled by its original small management team. Which of the following is a potential risk in this vertically centralized organization?
Management is pondering the following question:
"How does our organization compete?"
This question pertains to which of the following levels of strategy?
The IT department maintains logs of user identification and authentication for all requests for access to the network. What is the primary purpose of these logs?
An internal auditor is using data analytics to focus on high-risk areas during an engagement. The auditor has obtained data and is working to eliminate redundancies in the data. Which of the following statements is true regarding this scenario?
Which of the following performance measures includes both profits and investment base?
An organization requires an average of 5S days to convert raw materials into finished products to sell. An average of 42 additional days is required to collect receivables. If the organization takes an average of 10 days to pay for the raw materials, how long is its total cash conversion cycle?
TESTED 01 Mar 2026
