INTERNAL AUDIT QUIZ EXPECTED QUESTIONS WITH
VERIFIED ANSWERS
Question 1.
Which of the following is true regarding business process outsourcing?
a. Outsourcing a core, high-risk business process reduces the overall operational risk.
b. Outsourced processes should not be included in the internal audit universe.
c. The independent outside auditor is required to review all significant outsourced business processes.
d. Management's controls to ensure the outsourcing provider meets contractual performance
requirements should be tested by the internal audit function.
ANSWER
d. Management's controls to ensure the outsourcing provider meets contractual performance
requirements should be tested by the internal audit function.
Question 2.
After business risk have been identified, they should be assessed in terms of their inherent:
a. Impact and likelihood
b. Likelihood and probability
c. Significance and severity
d. Significance and control effectiveness
ANSWER
a. Impact and likelihood
1/9
, Question 3.
The term "risk" is best defined as the possibility that
a. An internal auditor will fail to detect a material misstatement that causes financial statements or
internal reports to be misstated or misleading.
b. An event could occur affecting the achievement of objectives.
c. Management will, either knowingly or unknowingly, make decisions that increase the potential
liability of the organization.
d. Financial statements or internal records will contain material misstatements.
ANSWER
b. An event could occur affecting the achievement of objectives.
Question 4.
Which of the following are components of the definition of internal auditing?
a. Independence and objectivity
b. A systematic and disciplined approach
c. Helping the organization accomplish its objectives
d. All of the above
ANSWER
d. All of the above
- Independence and objectivity
- A systematic and disciplined approach
- Helping the organization accomplish its objectives
2/9
VERIFIED ANSWERS
Question 1.
Which of the following is true regarding business process outsourcing?
a. Outsourcing a core, high-risk business process reduces the overall operational risk.
b. Outsourced processes should not be included in the internal audit universe.
c. The independent outside auditor is required to review all significant outsourced business processes.
d. Management's controls to ensure the outsourcing provider meets contractual performance
requirements should be tested by the internal audit function.
ANSWER
d. Management's controls to ensure the outsourcing provider meets contractual performance
requirements should be tested by the internal audit function.
Question 2.
After business risk have been identified, they should be assessed in terms of their inherent:
a. Impact and likelihood
b. Likelihood and probability
c. Significance and severity
d. Significance and control effectiveness
ANSWER
a. Impact and likelihood
1/9
, Question 3.
The term "risk" is best defined as the possibility that
a. An internal auditor will fail to detect a material misstatement that causes financial statements or
internal reports to be misstated or misleading.
b. An event could occur affecting the achievement of objectives.
c. Management will, either knowingly or unknowingly, make decisions that increase the potential
liability of the organization.
d. Financial statements or internal records will contain material misstatements.
ANSWER
b. An event could occur affecting the achievement of objectives.
Question 4.
Which of the following are components of the definition of internal auditing?
a. Independence and objectivity
b. A systematic and disciplined approach
c. Helping the organization accomplish its objectives
d. All of the above
ANSWER
d. All of the above
- Independence and objectivity
- A systematic and disciplined approach
- Helping the organization accomplish its objectives
2/9
