Practice Examples and Dumps & Tips for 2025 Latest IAA-IAP Valid Tests Dumps [Q24-Q47]

Q24. Which of the following would best support the overall risk assessment?

Policies and process procedures provided by the manager of the process under review.

Process narratives and process maps with descriptions of risks and controls.

Detailed organizational charts to understand roles and reporting lines in the area under review.

Q25. 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?

Residual

Inherent

Control

Q26. Which of the following is an important consideration when providing quality audit communications?

Include as much detail as possible.

Provide a fair and balanced assessment.

Demonstrate knowledge by using technical language.

Q27. If an internal auditor needs to evaluate compliance with an internal control policy, which sampling method is most appropriate?

Attribute sampling

Difference estimation sampling

Probability-proportional-to-size sampling

Q28. Operational management has asked the internal auditor for recommendations regarding an ineffective process. According to IIA guidance, which of the following would be the auditor’s most appropriate response?

Refrain from providing recommendations to preserve audit independence.

Agree to offer recommendations based on observations and conclusions.

Explain that only management should recommend and implement the corrective action.

Q29. 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?

Poor cash management due to potentially lost payment discounts

Poor cash management due to potentially paying fraudulent invoices

Poor cash management due to potentially paying the wrong vendors

Q30. As part of the annual training plan, the chief audit executive (CAE) has arranged for a local audit training institute to provide an in-house training session for the internal audit team. Which of the following best explains the primary purpose of this approach?

It helps the internal auditors maintain a required level of proficiency.

It helps the internal audit activity attain an appropriate organizational status to maintain independence.

It assists the CAE with assessing the results of the internal audit team’s development efforts.

Q31. Duties in a purchasing system are segregated and performed by different people. One person orders the goods, another person receives the goods, and another pays for the goods. This is an example of which of the following controls?

Preventive

Directive

Detective

Q32. Which of the following would be considered out of scope for a purchasing process audit engagement?

Authorization of requisitions

Control of goods

Matching goods received to requisitions

Q33. When is it appropriate for the internal auditor to determine the engagement’s scope and objectives?

During the planning of the engagement

During the performance of the engagement

In the final engagement report

Q34. An internal auditor is performing an internal control assessment at a manufacturing company. The auditor observed that the accounts payable clerks have the ability to create new vendors without management’s review and approval. How should the auditor document this observation?

The observation doesn’t affect the adequacy of the internal controls because the existing process controls ensure that invoices are promptly and accurately paid.

The observation is an internal control weakness; therefore, additional testing should be performed to determine whether secondary mitigating controls exist or whether the control should be redesigned.

The observation is a sign of adequate internal controls; however, effectiveness testing should be performed to ensure that the controls are operating as designed and intended.

Q35. Which of the following would provide the most reliable information on a process under review?

Documentation of a walkthrough conducted on the process under review

Testimonial evidence, such as survey responses, on the process under review

Benchmarking information on the process under review compared to similar industries or organizational units

Q36. A senior internal auditor is using a risk and control matrix to facilitate an internal control assessment of the fixed asset accounting process. Which of the following activities would aid the auditor in determining inputs for the risk and control matrix?

Reviewing the results of control effectiveness testing of the fixed asset capitalization subprocess.

Interviews with fixed asset management, control process walkthroughs, and internal control questionnaires.

Management’s cost-benefit analysis of internal control alternatives considered in the design of the fixed asset accounting process.

Q37. During an accounts payable audit engagement, the internal auditor identified a risk that vendor invoices may be paid multiple times. Which of the following would be appropriate preventive controls to mitigate this risk?

System controls to identify identical invoice amounts from the same vendor that prohibit payment after the initial invoice.

System controls to identify identical invoice numbers and dates from the same vendor prior to payment.

Manual controls requiring the reconciliation of paid vendor invoices to monthly invoice statements provided by the vendor.

Q38. Which of the following conditions would threaten an internal auditor’s objectivity?

Providing assurance services over the activity where the internal auditor was employed 10 months prior.

Using knowledge that the internal auditor gained in his previous position to update systems and controls descriptions.

Providing consulting services over the activity where the internal auditor was employed two years prior.

Q39. Management requested that the chief audit executive (CAE) include an audit of the organization’s health and safety program in next year’s annual audit plan. However, the internal audit activity has no expertise in this area. Which of the following would be the most appropriate actions for the CAE?

Work with an internal subject matter expert to complete the audit.

With management’s agreement, amend the audit scope so that specialized expertise is not needed.

Accept the request, provided management has conducted a thorough risk assessment prior to the engagement to help guide the audit.

Q40. Which of the following statements is appropriate to include in a high-quality internal audit engagement communication?

The internal audit team conducted a review of the financial reporting process prior to year-end. The overall findings have been provided for management’s consideration prior to the completion of the organization’s annual external financial audit.

The internal audit team noted numerous weaknesses in the organization’s internal controls over financial reporting. The team recommends that management determine the root cause of the weaknesses.

The internal audit team conducted an engagement under the assumption that significant control weaknesses were likely. The purpose of the review was to uncover those weaknesses.

Q41. To be organizationally independent, the chief audit executive should administratively report to which of the following?

The audit committee.

The board of directors.

The chief executive officer.

Q42. According to the IIA’s Code of Ethics, which of the following best describes the conduct of an internal auditor who demonstrates the principle of competency?

The auditor continually improves her proficiency and the effectiveness and quality of her services

The auditor is prudent in the use and protection of information acquired in the course of her work

The auditor does not accept anything that may impair or be presumed to impair her professional judgment

Q43. Which of the following would have the most direct impact on management’s decision regarding the amount of risk that is considered acceptable?

Risk capacity.

Risk appetite.

Risk perception.

Q44. Which of the following would be the best indicator that the organization’s risk management processes are operating effectively?

Management openly discusses both risks and opportunities facing the organization.

Management established policies and procedures that state risk will be considered.

The organization implemented formal operational risk management processes.

Q45. A newly hired internal auditor has been asked to examine the sales of a specific product over the last four years. Which of the following analytical review techniques should the auditor employ?

Ratio analysis.

Trend analysis.

External benchmarking.

Q46. During a travel expense audit engagement, the internal auditor discovered that the accounts payable staff spend a significant amount of time previewing expense reports before the reports are sent to managers for review and approval. The total of all expense reports during a year represents less than 1% of the organization’ s total budget. Which of the following best supports the auditor’srecommendation to reduce the level of reviews?

The inherent risk of travel expense fraud is low.

The cost of the control outweighs the benefit.

The duplication of effort in the review process is unnecessary.

Q47. An internal auditor is planning a business continuity audit engagement at a remote manufacturing plant. During planning interviews, the plant manager stated that the local Environmental, Health, and Safety (EHS) Department, which reports to the plant manager, had completed a similar review six months ago. The EHS review did not find any significant weaknesses. How should the internal auditor consider the EHS review results in the current audit engagement planning?

Ignore the EHS review results, as the department is not a reliable source of information due to its lack of objectivity and independence.

Recommend canceling the audit engagement, as it would be a duplication of effort to revisit the same process already reviewed by EHS.

Evaluate the objectivity and competency of the EHS reviewers and their work to determine whether their review results may be relied upon.