IIA-ACCA Exam Practice Test Instant Access

Question 1

When forming an opinion on the adequacy of management's systems of internal control, which of the following findings would provide the most reliable assurance to the chief audit executive?

* During an audit of the hiring process in a law firm, it was discovered that potential employees' credentials were not always confirmed sufficiently. This process remained unchanged at the following audit.

* During an audit of the accounts payable department, auditors calculated that two percent of accounts were paid past due. This condition persisted at a follow up audit.

* During an audit of the vehicle fleet of a rental agency, it was determined that at any given time, eight percent of the vehicles were not operational. During the next audit, this figure had increased.

* During an audit of the cash handling process in a casino, internal audit discovered control deficiencies in the transfer process between the slot machines and the cash counting are

a. It was corrected immediately.

A1 and 3 only

B1 and 4 only

C2 and 3 only

D2 and 4 only

Answer : B

Question 2

Which of the following best demonstrates the authority of the internal audit activity?

ASuggesting alternatives to decision makers.

BImproving the integrity of information.

CDetermining the scope of internal audit services.

DAchieving engagement objectives.

Answer : C

Question 3

Which of the following is an example of a risk management avoidance response?

AExiting a marketplace.

BRecalling a product.

CObtaining product insurance.

DOutsourcing production.

Answer : A

Question 4

Which of the following is most likely to be considered a control weakness?

AVendor invoice payment requests are accompanied by a purchase order and receiving report.

BPurchase orders are typed by the purchasing department using prenumbered forms.

CBuyers promptly update the official vendor listing as new supplier sources become known.

DDepartment managers initiate purchase requests that must be approved by the plant superintendent.

Answer : C

Question 5

According to IIA guidance on IT. which of the following plans would pair the identification of critical business processes with recovery time objectives?

AThe business continuity management charter.

BThe business continuity risk assessment plan

CThe business impact analysis plan

DThe business case for business continuity planning

Answer : C

Question 6

The external auditor has identified a number of production process control deficiencies involving several departments. As a result, senior management has asked the internal audit activity to complete internal control training for all related staff. According to IIA guidance, which of the following would be the most appropriate course of action for the chief audit executive to follow?

ARefuse to accept the consulting engagement because it would be a violation of independence.

BCollaborate with the external auditor to ensure the most efficient use of resources.

CAccept the engagement but hire an external training specialist to provide the necessary expertise.

DAccept the engagement even if the audit engagement staff was previously responsible for operational areas being trained.

Answer : D

Question 7

Which of the following is the primary purpose of financial statement audit engagements?

ATo assess the efficiency and effectiveness of the accounting department.

BTo evaluate organizational and departmental structures, including assessments of process flows related to financial matters.

CTo provide a review of routine financial reports, including analyses of selected accounts for compliance with generally accepted accounting principles.

DTo provide an analysis of business process controls in the accounting department, including tests of compliance with internal policies and procedures.

Answer : C

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