IIA-IAP Actual Questions – Instant Download 102 Questions [Q13-Q32]

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IIA-IAP Actual Questions – Instant Download 102 Questions

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QUESTION 13
An internal auditor is performing an internal control assessment at a manufacturing company. The auditor observed that the accounts payable clerks have the ability to create new vendors without management’s review and approval. How should the auditor document this observation?

The observation doesn’t affect the adequacy of the internal controls because the existing process controls ensure that invoices are promptly and accurately paid.

The observation is an internal control weakness; therefore, additional testing should be performed to determine whether secondary mitigating controls exist or whether the control should be redesigned.

The observation is a sign of adequate internal controls; however, effectiveness testing should be performed to ensure that the controls are operating as designed and intended.

QUESTION 14
Management has decided that transactions less than $50 no longer require authorization. Which of the following risk management strategies does this represent?

Avoid.

Accept.

Reduce.

QUESTION 15
Which of the following elements of the Fraud Triangle is directly under the organization’s control?

Pressure

Rationalization

Opportunity

QUESTION 16
What is the primary purpose of a preliminary survey?

To develop a risk and control matrix for the process under review.

To gain an understanding of the process under review.

To determine why the engagement is being performed.

QUESTION 17
Which of the following best ensures that the internal audit activity is free from undue interference from management?

A board audit committee that is composed of competent, independent members.

Audit policies and procedures that are comprehensive and well-documented, in accordance with the Standards.

An audit charter that defines the chief audit executive’s functional reporting relationship with the board.

QUESTION 18
In a standard process mapping document, a diamond shape typically represents which of the following?

Process or operation.

Decision.

Flow line.

QUESTION 19
Which of the following creates an opportunity for an employee to commit fraud?

Lack of adequate internal controls

Unfair compensation practices

The need for money to pay personal medical bills

QUESTION 20
Which of the following describes an internal auditor’s use of external benchmarking?

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

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

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

QUESTION 21
According to IIA guidance, which of the following are commonly standardized workpaper elements?

Workpapers should include a uniform cross-referencing system

Workpapers should be completed in an electronic format only

Workpapers should be supported by inclusion of original documentation

QUESTION 22
Which of the following analytical procedures would be most effective for an internal auditor to examine changes in performance over time?

Trend analysis

Ratio analysis

Analysis of common size financial statements

QUESTION 23
An internal auditor is conducting a human resources audit engagement. Which of the following observations would increase the probability of fraud?

Vague job descriptions.

Lack of background checks.

Poor interview skills.

QUESTION 24
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?

Difficulty obtaining access privileges to relevant and reliable data.

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

Difficulty getting the requisite IT personnel to conduct the tests.

QUESTION 25
Operational management has asked the internal auditor for recommendations regarding an ineffective process. According to IIA guidance, which of the following would be the auditor’s most appropriate response?

Refrain from providing recommendations to preserve audit independence.

Agree to offer recommendations based on observations and conclusions.

Explain that only management should recommend and implement the corrective action.

QUESTION 26
In addition to the internal auditor, which of the following parties need to be present at an exit or closing conference?

Audit committee members

Management over areas covered by the engagement

The chief executive officer

QUESTION 27
Which of the following best describes the difference between inherent risk and residual risk?

Inherent risk is the level of risk before the risk assessment process, residual risk is the level of risk remaining after completing the risk assessment process.

Inherent risk is the level of risk the organization is willing to accept, residual risk is the level of risk deemed unacceptable by the organization.

Inherent risk is the level of risk in the absence of any targeted actions or controls to alter its severity, residual risk is the risk remaining after implementing corrective actions.

QUESTION 28
During an accounts payable audit engagement, the internal auditor identified a risk that vendor invoices may be paid multiple times. Which of the following would be appropriate preventive controls to mitigate this risk?

System controls to identify identical invoice amounts from the same vendor that prohibit payment after the initial invoice.

System controls to identify identical invoice numbers and dates from the same vendor prior to payment.

Manual controls requiring the reconciliation of paid vendor invoices to monthly invoice statements provided by the vendor.

QUESTION 29
Which of the following best demonstrates that appropriate and sufficient resources were allocated to an audit engagement to achieve its objectives?

Staff skills audit.

Approved engagement work program.

Post-engagement survey of management of the audited area.

QUESTION 30
Which of the following is most likely to be considered an internal audit assurance service?

Process design engagement.

Facilitation engagement.

Compliance engagement.

QUESTION 31
Based on the three elements of the Fraud Triangle, which of the following might be considered a fraud indicator related to the opportunity element?

Reserves were established based on conservative assumptions to maximize the amounts set aside for when operating results may not meet investors’ expectations

Executive management establishes financial performance objectives for business unit managers. The objectives include significant increases in annual sales and market penetration

Poor segregation of duties allows for an executive assistant to authorize payments to one-time vendors without supervisory approvals

QUESTION 32
According to IIA guidance, which of the following is the primary criterion that should determine the extent of supervision required for an audit engagement?

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

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

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