Updated Feb-2023 IIA-ACCA Exam Practice Test Questions
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NEW QUESTION 336
An internal auditor completed an audit of a bank's loan department and found all significant risks to be managed adequately through effective internal controls. Which of the following would be an appropriate conclusion to report to management?
- A. The residual risk is higher than or equal to the risk appetite.
- B. The inherent risk is lower than or equal to the risk tolerance.
- C. The inherent risk is higher than or equal to the risk tolerance.
- D. The residual risk is lower than or equal to the risk appetite.
Answer: D
NEW QUESTION 337
An internal auditor is reviewing the accounts receivable when she discovers account balances more than three years old. The auditor was previously supervising the area during this time, and she subsequently advises the chief audit executive (CAE) of a potential conflict.
Which of the following is the most appropriate course of action for the CAE to take?
- A. Continue with the present auditor, as more than one year has passed.
- B. Replace the auditor with another audit staff member.
- C. Withdraw the audit team and outsource the financial audit of the division.
- D. Work with the division's management to resolve the situation.
Answer: B
NEW QUESTION 338
An organization needs to borrow a large amount of cash to fund its expansion plan. Which of the following annual interest rates is least expensive?
- A. 7 percent compounding interest.
- B. 7 percent simple interest paid at the end of each year.
- C. 7 percent discount interest.
- D. 7 percent simple interest with a 10 percent compensating balance.
Answer: B
NEW QUESTION 339
Within an enterprise, IT governance relates to the:
1. Alignment between the enterprise's IT long term plan and the organization's objectives.
2. Organizational structures of the company that are designed to ensure that IT supports the organization's strategies and objectives.
3. Operational plans established to support the IT strategies and objectives.
4. Role of the company's leadership in ensuring IT supports the organization's strategies and objectives.
- A. 1, 2, and 4 only
- B. 3 and 4 only
- C. 1 and 2 only
- D. 2, 3, and 4 only
Answer: A
NEW QUESTION 340
According to The IIA's Code of Ethics, which of the following statements is true?
- A. When an internal auditor disagrees with the treatment received by workers in the organization's foreign subsidiary and alters the audit program to highlight the issue, he fails to demonstrate objectivity.
- B. When an internal auditor limits the scope of the audit engagement after learning that management is hiding relevant information, he demonstrates integrity.
- C. When an internal auditor releases required information to a regulator, resulting in a significant loss through fines and penalties for the organization, he fails to add value.
- D. When an internal auditor continues with an audit engagement, despite the audit client's claims that the work performed is unnecessary and redundant he fails to demonstrate competency.
Answer: A
NEW QUESTION 341
Which of the following actions should the audit committee take to promote organizational independence for the internal audit activity?
- A. Assist the CAE with hiring objective and competent internal audit staff.
- B. Encourage the CAE to communicate and coordinate with the external auditor.
- C. Delegate final approval of the risk-based internal audit plan to the chief audit executive (CAE).
- D. Approve the annual budget and resource plan for the internal audit activity.
Answer: C
NEW QUESTION 342
The audit committee of a global corporation has mandated a change in the organization's business ethics policy. Which of the following approaches describes the best way to accomplish the policy's diffusion worldwide?
- A. Introduce the policy region by region, using any lessons learned to change the subsequent version of the policy for the next area.
- B. Send the board-approved version of the policy to each country's senior leadership, and empower them to tailor the policy to the local language and culture.
- C. Consult with legal and operational management in each affected country to ensure the final version can be implemented globally, following audit committee approval.
- D. Deploy the policy in the corporate headquarters' language, so everyone gets an unfiltered version simultaneously.
Answer: C
NEW QUESTION 343
An organization decides to take no action on one of its financial risks because the cost of implementing the control outweighs the value of the asset being protected. Which of the following best describes this risk strategy?
- A. Risk sharing.
- B. Risk-benefit analysis.
- C. Risk avoidance.
- D. Risk acceptance.
Answer: D
NEW QUESTION 344
Which of the following characteristics is most important specifically for a global manager to possess in order to be successful?
- A. Cultural intelligence
- B. Emotional intelligence
- C. Knowledge of different languages.
- D. Understanding of uncertainty avoidance differences
Answer: A
NEW QUESTION 345
Which of the following are likely indicators of ineffective change management?
1. IT management is unable to predict how a change will impact interdependent systems or business processes.
2. There have been significant increases in trouble calls or in support hours logged by programmers.
3. There is a lack of turnover in the systems support and business analyst development groups.
4. Emergency changes that bypass the normal control process frequently are deemed necessary.
- A. 1, 2, 3, and 4
- B. 1, 2, and 4 only
- C. 1 and 3 only
- D. 2 and 4 only
Answer: B
NEW QUESTION 346
Which of the following should an organization consider when developing strategic objectives for its business processes?
1. Contribution to the success of the organization.
2. Reliability of operational information.
3. Behaviors and actions expected of employees.
4. How inputs combine with outputs to generate activities.
- A. 2 and 4 only
- B. 3 and 4 only
- C. 1 and 2 only
- D. 1 and 3 only
Answer: D
NEW QUESTION 347
Which of the following most accurately describes the purpose of application authentication controls?
- A. To ensure that data input into business applications is valid, complete, and accurate.
- B. To prevent or detect errors in data processed using business applications.
- C. To ensure the validity, accuracy, and completeness of outputs from business applications.
- D. To ensure that business applications are protected from unauthorized logical access.
Answer: D
NEW QUESTION 348
Which of the following borrowing options is an unsecured loan?
- A. Second-mortgage financing from a bank.
- B. Asset-based financing.
- C. An issue of commercial paper.
- D. Pledged accounts receivable.
Answer: C
NEW QUESTION 349
Which of the following has the greatest effect on the efficiency of an audit?
- A. The complexity of deficiency findings.
- B. The method and amount of supporting detail used for the audit report.
- C. The adequacy of preliminary survey information.
- D. The organization and content of workpapers.
Answer: C
NEW QUESTION 350
Which of the following is the primary engagement responsibility of an entry-level internal auditor?
- A. Documentation.
- B. Reporting.
- C. Leadership.
- D. Analysis.
Answer: D
NEW QUESTION 351
The internal audit activity (IAA) wants to measure its performance related to the quality of audit recommendations. Which of the following client survey questions would best help the IAA meet this objective?
- A. Were the findings reported in a timely manner?
- B. Does the audit report format present issues clearly and concisely?
- C. Were audit findings relevant and useful to management?
- D. Does the IAA work with a high degree of professionalism and objectivity?
Answer: C
NEW QUESTION 352
Reviewing prior audit reports and supporting workpapers before an engagement starts enables an internal auditor to do which of the following?
1. To understand better the activity and processes that will be audited.
2. To identify the audit procedures that will be used during the engagement.
3. To ensure that matters of greatest vulnerability will be addressed.
4. To use the information obtained as evidence in the current engagement.
- A. 4 only
- B. 1 and 4 only
- C. 2, 3, and 4 only
- D. 1 and 3 only
Answer: D
NEW QUESTION 353
When writing a business memorandum, the writer should choose a writing style that achieves all of the following except:
- A. Draws positive attention to the writing style.
- B. Develops ideas without overstatement.
- C. Treats all receivers with respect.
- D. Suits the method of presentation and delivery.
Answer: A
NEW QUESTION 354
Which of the following techniques is the most relevant when an internal auditor conducts a valuation of an organization's physical assets?
- A. Original cost.
- B. Observation.
- C. Inspection.
- D. Vouching.
Answer: C
NEW QUESTION 355
The cost to enter a foreign market would be highest in which of the following methods of global expansion?
- A. Licensing.
- B. Joint ventures.
- C. Exporting.
- D. Overseas production.
Answer: D
NEW QUESTION 356
Which of the following re a result of implementing an e-commerce system, which relies heavily on electronic data interchange and electronic funds transfer, for purchasing and billing?
- A. Higher inventory balances
- B. Higher accounts payable
- C. Higher cash flow and treasury balances
- D. Higher accounts receivable
Answer: D
NEW QUESTION 357
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