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IIA Internal Audit Practitioner Sample Questions:

1. An internal auditor wants to establish the reasonableness of the current period's total payroll costs for the finance department. She divides the actual monthly payroll cost by the number of employees to derive an average cost per employee. Which of the following comparisons to this average cost would be considered trend analysis?

A) The mean of all actual salary amounts.
B) Similar data for the department from two prior periods.
C) Budgeted information of another organization in the same industry.

2. In the absence of any action to control or modify the circumstances, the probability of loss arising from circumstances existing in an environment is known as which of the following types of risk?

A) Inherent
B) Residual
C) Control

3. Which of the following best describes the knowledge, skills, and abilities that internal auditors should possess with regard to fraud?

A) Expertise in detecting and investigating fraud.
B) Specialized skills for developing and implementing controls to prevent fraud.
C) Sufficient knowledge to evaluate the risk of fraud.

4. Which of the following would have the most direct impact on management's decision regarding the amount of risk that is considered acceptable?

A) Risk perception.
B) Risk appetite.
C) Risk capacity.

5. Which of the following best describes the purpose of a detailed engagement risk assessment?

A) To ensure that all risks identified during the engagement planning process are addressed during the audit.
B) To consider significant risks to the activity's objectives and the means by which the potential impact of risk is kept to an acceptable level.
C) To prioritize risks to the activity's objectives, according to the likelihood of occurrence.

Solutions: