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IIA Internal Audit Practitioner Sample Questions:

1. During an accounts payable audit engagement, the internal auditor found that vendor invoices are always paid
30 days after the invoice date, regardless of the vendor's payment terms. The auditor also discovered that accounts payable employees are not comparing vendor invoices received to previous vendor invoices prior to payment. Based on the auditor's observations, what are the potential risks?

A) Poor cash management due to potentially paying the wrong vendors
B) Poor cash management due to potentially paying fraudulent invoices
C) Poor cash management due to potentially lost payment discounts

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

3. In a standard process mapping document, a diamond shape typically represents which of the following?

A) Decision.
B) Flow line.
C) Process or operation.

4. Which of the following statements is true regarding root cause analysis?

A) Root cause analysis enables internal auditors to improve the effectiveness and efficiency of the organization's governance, risk management, and control processes.
B) Root cause analysis is a simple, straightforward tool that can be implemented by internal auditors who may not possess relevant subject matter expertise.
C) Root cause analysis enables internal auditors to reveal multiple causes and recommend control enhancements for each cause identified.

5. During engagement planning, which of the following sources would provide the internal auditor with relevant information to obtain an understanding of the process under review?

A) The internal audit activity's annual audit plan and discussions that led to its development
B) Final report from an external financial audit of the process under review, which includes the status of management's corrective action plans
C) Mission, strategic objectives, and key performance indicators of the process under review, based on documented plans, policies, procedures, and discussions with management

Solutions: