Free IIA IIA-ACCA Practice Exam with Questions & Answers | Set: 4

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Questions 46

According to IIA guidance, organizations have the most influence on which element of fraud?

Options:

Opportunity.

Rationalization.

Pressure.

Incentives.

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22-Jun-2025

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Questions 47

According to IIA guidance, which of the following statements is false regarding a review of the controls in place to prevent fraud?

Options:

The review should focus on the efficiency of the controls in place to prevent fraud.

The scope of the review does not need to include all operating areas of the organization.

The cost of the control should be compared to the benefit of mitigating the related risk.

The review should assess whether the internal controls can be circumvented.

Questions 48

Which of the following recommendations made by the internal audit activity (IAA) is most likely to help prevent fraud?

Options:

A review of password policy compliance found that employees frequently use the same password more than once during a year. The IAA recommends that the access control software reject any password used more than once during a 12-month period.

A review of internal service-level agreement compliance in financial services found that requests for information frequently are fulfilled up to two weeks late. The IAA recommends that the financial services unit be eliminated for its ineffectiveness.

A vacation policy compliance review found that employees frequently leave on vacation before their leave applications are signed by their manager. The IAA recommends that the manager attend to the leave applications in a more timely fashion.

A review of customer service-level agreements found that orders to several customers are frequently delivered late. The IAA recommends that the organization extend the expected delivery time advertised on its website.

Questions 49

According to IIA guidance, which of the following actions might place the independence of the internal audit function in jeopardy?

Options:

Having no active role or involvement in the risk management process.

Auditing the risk management process for reasonableness.

Coordinating and managing the risk management process.

Participating with management in identifying and evaluating risks.

Questions 50

During an audit of the accounts receivable (AR) process, an internal auditor noted that reconciliations are still not performed regularly by the AR staff, a recommendation that was made following a previous audit. Monitoring by the financial reporting function has failed to detect the shortcoming. Both the financial reporting function and AR report to the controller, who is responsible for implementing action plans. Which of the following supports the internal auditor's decision to combine both observations into one reported finding?

Options:

The observation was made during the same audit, and the action plan has a common owner.

The observation relates to the same control activity within a common process.

The observation has a common control, and it was noted in a prior audit.

The observation has a common process, and the action plan for the observation has a common owner.

Questions 51

Which of the followings statements describes a best practice regarding assurance engagement communication activities?

Options:

All assurance engagement observations should be communicated to the audit committee.

All assurance engagement observations should be included in the main section of the engagement communication.

During the "communicate" phase of an assurance engagement, it is best to define the methods and timing of engagement communications.

A detailed escalation process should be developed during the planning stage of an assurance engagement.

Questions 52

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?

Options:

Disclose the information in a separate report.

Distribute the information in a confidential report to the board only

Distribute the reports through the use of blind copies.

Exclude the results from the report and verbally report the conditions to senior management and the board.

Questions 53

An audit client responded to recommendations from a recent consulting engagement. The client indicated that several recommended process improvements would not be implemented. Which of the following actions should the internal audit activity take in response?

Options:

Escalate the unresolved issues to the board, because they could pose significant risk exposures to the organization.

Confirm the decision with management and document this decision in the audit file.

Document the issue in the audit file and follow up until the issues are resolved.

Initiate an assurance engagement on the unresolved issues.

Questions 54

Which of the following has the greatest effect on the efficiency of an audit?

Options:

The complexity of deficiency findings.

The adequacy of preliminary survey information.

The organization and content of workpapers.

The method and amount of supporting detail used for the audit report.

Questions 55

According to IIA guidance,which of the following is true about the supervising internal auditor's review notes?

• They are discussed with management prior to finalizing the audit.

• They may be discarded after working papers are amended as appropriate.

• They are created by the auditor to support her fieldwork in case of questions.

• They are not required to support observations issued in the audit report.

Options:

1 and 3 only

1 and 4 only

2 and 3 only

2 and 4 only

Questions 56

Due to price risk from the foreign currency purchase of aviation fuel, an airliner has purchased forward contracts to hedge against fluctuations in the exchange rate. When recalculating the exchange losses from individual purchases of jet fuel, which of the following details does the internal auditor need to validate?

1. The hedge documentation designating the hedge.

2. The spot exchange rate on the transaction date.

3. The terms of the forward contract.

4. The amount of fuel purchased.

Options:

1 and 2

1 and 4

2 and 3

3 and 4

Questions 57

According to IIA guidance, which of the following statements best justifies a chief audit executive's request for external consultants to complement internal audit activity (IAA) resources?

Options:

The organization's audit universe is extensive and diverse.

There has been an increase in unanticipated requests for advisory work.

Previous work provided by the external service provider has been of great quality and value.

A recent benchmarking study found that using external service providers is a common practice of similarly-sized IAAs in other organizations.

Questions 58

The chief audit executive of a medium-sized financial institution is evaluating the staffing model of the internal audit activity (IAA). According to IIA guidance, which of the following are the most appropriate strategies to maximize the value of the current IAA resources?

• The annual audit plan should include audits that are consistent with the skills of the IAA.

• Audits of high-risk areas of the organization should be conducted by internal audit staff.

• External resources may be hired to provide subject-matter expertise but should be supervised.

• Auditors should develop their skills by being assigned to complex audits for learning opportunities.

Options:

1 and 2 only

1 and 4 only

2 and 3 only

3 and 4 only

Questions 59

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?

Options:

The CAE has no role to play, because the chief health and safety officer reports to a senior executive.

The CAE should coordinate with, and review the work of, the chief health and safety officer to gain an understanding of whether risks related to health and safety are managed properly.

The CAE should give periodic reports directly to the regulator regarding health and safety issues, as it is the appropriate regulatory oversight body.

The CAE should hire an independent external specialist to conduct an annual assessment and provide assurance over the effectiveness of the health and safety program and the reliability of its reports.

Questions 60

For which of the following fraud engagement activities would it be most appropriate to involve a forensic auditor?

Options:

Independently evaluating conflicts of interests.

Assessing contracts for relevant terms and conditions.

Performing statistical analysis for data anomalies.

Preparing evidentiary documentation.