Free Internal Audit Practitioner Exam IIA-IAP Exam Practice Test

According to the IIA’s Code of Ethics, which of the following best describes the conduct of an internal auditor who demonstrates the principle of competency?The auditor continually improves her proficiency and the effectiveness and quality of her servicesThe auditor is prudent in the use and protection of information acquired in the course of her workThe auditor does not accept anything that may impair or be presumed to impair her professional judgment

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.

Which of the following is an advantage of communicating audit observations as they are identified?The auditor may receive additional pertinent documentation or other relevant informationThe auditor may not need to communicate the final results of the audit to the boardThe auditor may be able to plan more efficiently next year’s audit

Information collected and documented in audit workpapers should be sufficient to:

• Confirm that management has effectively implemented recommended actions to resolve all identified control weaknesses.
• Allow the work to be repeated and achieve the same results that logically lead to the same conclusion.
• Support engagement observations and be consistent with engagement objectives.

During an assurance engagement of an organization's procurement process, an internal auditor obtained the policy that specified the authorized dollar limits for invoices. This document would best support which of the following attributes of an audit report?

• Effect
• Condition
• Criteria

Which of the following would be the best indicator that the organization's risk management processes are operating effectively?Management openly discusses both risks and opportunities facing the organization.Management established policies and procedures that state risk will be considered.The organization implemented formal operational risk management processes.

Which of the following elements of the Fraud Triangle is directly under the organization's control?

• Pressure
• Rationalization
• Opportunity

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 performedto 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.

Which of the following conditions would threaten an internal auditor's objectivity?

• Providing assurance services over the activity where the internal auditor was employed 10 months prior.
• Using knowledge that the internal auditor gained in his previous position to update systems and controls descriptions.
• Providing consulting services over the activity where the internal auditor was employed two years prior.

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

• Audit policies and procedures that are comprehensive and well-documented, in accordance with the Standards.
• A board audit committee that is composed of competent, independent members.
• An audit charter that defines the chief audit executive's functional reporting relationship with the board.