INTERNAL AUDITING UPDATED ACTUAL EXAM
QUESTIONS AND CORRECT ANSWERS
Question 1.
Describe three components of the value proposition for internal auditing
ANSWER
1. Assurance- helps organization achieve its strategic, operational, financial, and compliance
objectives.
2. Insight- Find better ways to do things. Improve an organizations effectiveness and efficiency
based on analyses and assessments of data and business processes. 3. Objectivity- Integrity,
accountability, and independence
Question 2.
What functions do internal auditors perform?
ANSWER
1. Helping the organization accomplish its objectives. (taking company strategy and providing
insight to sustain competitive advantage) helps org. do a better job. 2. Evaluating and
improving the effectiveness of risk management, control, and governance processes. (Testing
practices, procedures, and controls, to see its effectiveness)
3. Assurance and consulting activity designed to add value and improve operations.
4. Independence and objectivity 5. A systematic and disciplined approach( specifically the
engagement processes)
Question 3.
Governance
ANSWER
Process conducted by the board of directors to authorize, direct, and oversee management
towards the achievement of the organization's objectives. (Manage management)
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, Question 4.
Risk management
ANSWER
Process conducted by management to understand and deal with uncertainties that could affect
the organization's ability to achieve its objectives. (What could go wrong and what we can do
about it.)
Question 5.
Control
ANSWER
Procedures/processes used to reduce risks to acceptable levels
Question 6.
The internal audit function should be in a position to accomplish what two objectives?
ANSWER
1. independently evaluate management's assessment of the organization's internal control
system
2. Assess the organization's ability to achieve business objectives and manage, monitor, and
mitigate risks associated with the achievement of those objectives
Question 7.
Describe three functions of an internal audit charter.
ANSWER
1. Establish internal audit position within the organization. (Purpose)
2. Authorize access to records, personnel, and physical properties relevant to performance of
engagement. (Authority)
3. Defines the scope of internal audit activities. (Responsibility)
Question 8.
What does it mean for internal auditors to have individual objectivity?
ANSWER
An unbiased mental attitude that allows internal auditors to perform engagements without
any significant quality compromises being made.
2/6
QUESTIONS AND CORRECT ANSWERS
Question 1.
Describe three components of the value proposition for internal auditing
ANSWER
1. Assurance- helps organization achieve its strategic, operational, financial, and compliance
objectives.
2. Insight- Find better ways to do things. Improve an organizations effectiveness and efficiency
based on analyses and assessments of data and business processes. 3. Objectivity- Integrity,
accountability, and independence
Question 2.
What functions do internal auditors perform?
ANSWER
1. Helping the organization accomplish its objectives. (taking company strategy and providing
insight to sustain competitive advantage) helps org. do a better job. 2. Evaluating and
improving the effectiveness of risk management, control, and governance processes. (Testing
practices, procedures, and controls, to see its effectiveness)
3. Assurance and consulting activity designed to add value and improve operations.
4. Independence and objectivity 5. A systematic and disciplined approach( specifically the
engagement processes)
Question 3.
Governance
ANSWER
Process conducted by the board of directors to authorize, direct, and oversee management
towards the achievement of the organization's objectives. (Manage management)
1/6
, Question 4.
Risk management
ANSWER
Process conducted by management to understand and deal with uncertainties that could affect
the organization's ability to achieve its objectives. (What could go wrong and what we can do
about it.)
Question 5.
Control
ANSWER
Procedures/processes used to reduce risks to acceptable levels
Question 6.
The internal audit function should be in a position to accomplish what two objectives?
ANSWER
1. independently evaluate management's assessment of the organization's internal control
system
2. Assess the organization's ability to achieve business objectives and manage, monitor, and
mitigate risks associated with the achievement of those objectives
Question 7.
Describe three functions of an internal audit charter.
ANSWER
1. Establish internal audit position within the organization. (Purpose)
2. Authorize access to records, personnel, and physical properties relevant to performance of
engagement. (Authority)
3. Defines the scope of internal audit activities. (Responsibility)
Question 8.
What does it mean for internal auditors to have individual objectivity?
ANSWER
An unbiased mental attitude that allows internal auditors to perform engagements without
any significant quality compromises being made.
2/6
