Free IIA IIA-ACCA Practice Questions 2026 - Page 9

According to IIA guidance, which of the following statements is true regarding the reporting of results from an external quality assessment of the internal audit activity?

A. The external assessment results are reported upon completion in confidence directly to the board, and senior management is advised only of the recommendations and improvement action plans.

B. The results of self-assessments with independent external validation are shared with the board upon completion, and monitoring of recommended improvements must be reported monthly.

C. The external assessment results are communicated upon completion to senior management and the board, but action plans for recommended improvements do not have to be reported.

D. The requirements for reporting quality assessment results are the same for external assessments and self-assessments with independent external validation.

Forty-five percent of an organization's customer payments are submitted online. Eight percent of online payments are rejected. Executive management decides to outsource its online payment services to a contractor that will assume 75 percent of the total value of rejected payments. The organization estimates $1.25 million customer payments due during the contract period.
Which of the following represents the organization's residual risk for online customer payments due?

A. $11, 250

B. $25, 000

C. $33, 750

D. $45, 000

Which of the following must be in existence as a precondition to developing an effective system of internal controls?

A. A monitoring process.

B. A risk assessment process.

C. A strategic objective-setting process.

D. An information and communication process.

Which of the following is not an objective of internal control?

A. Compliance.

B. Accuracy.

C. Efficiency.

D. Validation.

An internal audit charter should do which of the following?

A. Outline the schedule of future audits.

B. Define the scope of internal audit activities.

C. Establish the size of the internal audit activity.

D. Communicate the internal audit activity's goals.

Which of the following is an example of a directive control?

A. Segregation of duties.

B. Exception reports.

C. Incentive compensation plans.

D. Automated reconciliations.

A chief audit executive (CAE) is reviewing the internal audit activity's performance and is concerned that the average number of revisions to findings is steadily rising, making it increasingly difficult to trace the finding to the supporting evidence and workpapers.
According to MA guidance, which of the following elements of the internal audit activity's quality assurance and improvement program would provide the CAE with the most helpful insight into the cause of this problem?

A. The overall effectiveness of the internal audit activity's periodic self assessments.

B. The type of audit productivity and performance statistics reported.

C. The adequacy of the day-to-day supervision and review process.

D. The scope and frequency of external assessments.

If appropriate safeguards exist, which of the following is considered a legitimate internal audit role within risk management at an organization?

A. Imposing risk management processes.

B. Providing consolidated reporting on risks.

C. Taking accountability for risk management.

D. Making decisions on risk responses.

Upon joining the internal audit activity, each new auditor receives a copy of the audit handbook. Which of the following handbook policies has the greatest risk of compromising audit objectivity?

A. Internal auditors should obtain 80 hours of continuing professional education every two years, 20 of which should be audit-related, and the remainder may be operations-related.

B. Internal auditors should rotate to other areas of the organization for nonaudit assignments to gain an understanding of the organization's operations.

C. Internal auditors should have direct and unrestricted access to personnel and information throughout the organization and the governing board.

D. Internal auditors should undergo annual performance appraisals conducted by the chief audit executive, who reports administratively to the chief financial officer.

According to IIA guidance, which of the following is least compliant with the requirements regarding an internal auditor's need for objectivity?

A. An internal auditor assessed the effectiveness of controls over payroll software, which he had helped implement with a previous employer.

B. An internal auditor participated in an audit of controls around absenteeism, despite providing some consultation on controls in this area earlier in the year.

C. An internal auditor performed an assurance engagement for the effectiveness of accounts payable access controls, one of which he previously helped to design.

D. An internal auditor, previously employed in the quality assurance operations area, performed a consulting engagement for the operations manager.