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IIA Practice of Internal Auditing Sample Questions (Q206-Q211):
NEW QUESTION # 206
When a significant finding is noted early during a review of the accounts payable function, which next course of action is best for communicating the issue?
- A. Note the item in the workpapers for inclusion in the final audit report
- B. Alert the CEO as soon as the issue is discovered
- C. Call a meeting and discuss me issue with the audit committee
- D. Intern accounting management via an interim memorandum update
Answer: B
NEW QUESTION # 207
The human resources (HR) department was last reviewed three years ago and is due for an assurance engagement after undergoing recent process changes. Which of the following would the most effective option identify the HR department's risks and controls?
- A. Review the organization's risk strategy and risk appetite framework
- B. Discuss the department's present strategies 'and objectives with the head of the HR department
- C. Review the previous internal audit report and locus on key audit observations and action plans
- D. Meet with the chief operating officer 10 obtain Information about the MR department
Answer: B
NEW QUESTION # 208
As part of an operational audit, an auditor compared records of current inventory with usage during the prior two-year period and determined that the spare parts inventory was excessive. What step should the auditor perform first?
- A. Determine whether purchases were properly recorded.
- B. Determine the effects of a stock-out on the organization's profitability.
- C. Determine whether a clear policy exists for setting inventory limits.
- D. Determine who approved the purchase orders for the spare parts.
Answer: C
NEW QUESTION # 209
Which of the following would be an appropriate and effective control self-assessment approach in an organization with an authoritative culture?
I.Facilitated meeting.
II.
Survey.
III.
Management-produced analysis.
- A. I and III only.
- B. I, II, and III.
- C. II and III only.
- D. I only.
Answer: C
NEW QUESTION # 210
Where should internal auditor focus their attention when identify and assessing key risks during the planning stage of an assurance engagement?
- A. Audit risk.
- B. Sampling risk.
- C. Residual risk.
- D. Inherent risk
Answer: D
Explanation:
During the planning stage of an assurance engagement, internal auditors should focus their attention on identifying and assessing inherent risks. Inherent risk is the risk of a material misstatement or noncompliance due to error or fraud that could occur before any controls are applied. Understanding inherent risk is crucial as it helps auditors identify areas that may need more extensive testing and ensures that audit resources are appropriately allocated to the highest risk areas.
References:
* The Institute of Internal Auditors (IIA) Practice Guide: Assessing the Adequacy of Risk Management Using ISO 31000
* IIA Standard 2010 - Planning
NEW QUESTION # 211
......
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