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IIA-ACCA Practice Exam Questions and Answers

ACCA CIA Challenge Exam

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Question # 1

A former line supervisor from the Financial Services Department has completed six months of a two-year development opportunity with the internal audit activity (IAA). She is assigned to a team that will audit the organization's payroll function, which is managed by the Human Resources Department. Which of the following statements is most relevant regarding her independence and objectivity with respect to the payroll audit?

Options:

A.  

She may participate, but only after she has completed one year with the IA

A.  

B.  

She may participate, because she did not previously work in the Human Resources Department.

C.  

She may participate, but she must be supervised by the auditor in charge.

D.  

She may participate for training purposes, to build her knowledge of the IA

A.  

Discussion 0
Question # 2

Which of the following are generally recognized as essential elements of a corporate social responsibility program?

Options:

A.  

Human rights and the environment.

B.  

Organizational governance and financial reporting.

C.  

Fair operating practices and government regulation.

D.  

Consumer issues and return on investment.

Discussion 0
Question # 3

When auditing the award of a major contract, which of the following should an internal auditor suspect as a red flag for a bidding fraud scheme?

1. Subsequent change orders increase requirements for low-bid items.

2. Material contract requirements are different on the actual contract than on the request for bids.

3. A high percentage of employees are charged to indirect accounts.

4. Losing bidders are hired as subcontractors.

Options:

A.  

1 only

B.  

2 only

C.  

1 and 3.

D.  

2 and 4.

Discussion 0
Question # 4

Which of the following describes a key characteristic related to effective organizational communication?

Options:

A.  

Comprehensive supervisory and verification procedures.

B.  

A well-designed system of internal controls.

C.  

A culture of integrity and transparency.

D.  

Unique operating environments with varying complexity.

Discussion 0
Question # 5

An internal auditor wants to sample data to test an audit theory in a cost-effective way. Which of the following sampling strategies should she use?

Options:

A.  

Statistical sampling only

B.  

Nonstatistical sampling only

C.  

A combination of both statistical and nonstatistical sampling.

D.  

Neither approach to testing the audit theory would be cost effective.

Discussion 0
Question # 6

A furniture manufacturer has installed a new fire sprinkler system at its central warehouse and canceled the existing fire insurance policy on that property. What change of risk response strategy does this course of action most likely reflect?

Options:

A.  

From sharing to reduction.

B.  

From acceptance to reduction.

C.  

From sharing to avoidance.

D.  

From acceptance to avoidance.

Discussion 0
Question # 7

According to IIA guidance, which of the following should be formally documented in the internal audit charter?

Options:

A.  

The internal audit activity's responsibility for imposing risk management processes.

B.  

The internal audit activity's responsibility for the organization's governance framework.

C.  

The nature of consulting services provided by the internal audit activity.

D.  

The budgeting process for the internal audit activity.

Discussion 0
Question # 8

With regard To IT governance, which of the following is the most effective and appropriate role for the internal audit activity?

Options:

A.  

Independently evaluate the skills and experience of potential chief information officer candidates to assess the best fit based on the organization's risk appetite.

B.  

Evaluate the organization's governance standards and assess IT-related activities to identify gaps and develop policies, ensuring alignment with the organization's risk appetite.

C.  

Assist management in interpreting complex IT-related privacy and security risk exposures and evaluating potential mitigation strategies.

D.  

Assess whether governance activities are aligned with the organization's risk appetite and take into consideration emerging risks.

Discussion 0
Question # 9

Which of the following scenarios best illustrates the principle of due professional care?

Options:

A.  

An internal auditor evaluates the significant risks arising from a consulting engagement.

B.  

An internal auditor declares that he would have a conflict of interest in providing planned audit support.

C.  

An internal auditor has been given sufficient authority to access documents needed to make an appraisal of an issue.

D.  

An internal auditor uses technology-based audit techniques to ensure that all significant risks are identified.

Discussion 0
Question # 10

While auditing an organization's credit approval process, an internal auditor learns that the organization has made a large loan to another auditor's relative. Which course of action should the auditor take?

Options:

A.  

Proceed with the audit engagement, but do not include the relative's information.

B.  

Have the chief audit executive and management determine whether the auditor should continue with the audit engagement.

C.  

Disclose in the engagement final communication that the relative is a customer.

D.  

Immediately withdraw from the audit engagement.

Discussion 0
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