IIA PRACTICE TEST -
PART 1 EXAM TEST AND
COMPLETE SOLUTIONS
What is the primary purpose of internal auditing?
Answer: The primary purpose of internal auditing is to provide independent, objective
assurance and consulting services designed to add value and improve an organization's
operations. Internal auditing helps an organization accomplish its objectives by bringing a
systematic, disciplined approach to evaluate and improve the effectiveness of risk management,
control, and governance processes.
Question 2:
Which of the following is an attribute of a strong internal control environment?
● A. Management's philosophy and operating style
● B. Presence of an audit committee
● C. Segregation of duties
● D. Compliance with all laws and regulations
Answer:
A. Management's philosophy and operating style
Question 3:
An internal auditor is reviewing the process for purchasing supplies and notes that there
is no requirement for competitive bidding. Which internal control principle is most likely
violated?
● A. Authorization of transactions
● B. Segregation of duties
● C. Adequate documentation
● D. Safeguarding of assets
Answer:
A. Authorization of transactions
, Question 4:
Which of the following best describes the role of the internal audit function regarding
risk management?
● A. To manage and implement risk management policies.
● B. To provide assurance that risks are identified and managed effectively.
● C. To be the sole risk owners in the organization.
● D. To develop risk management policies.
Answer:
B. To provide assurance that risks are identified and managed effectively
Question 5:
An internal auditor finds that several employees share the same login credentials to
access a critical financial system. Which control issue does this situation primarily
represent?
● A. Lack of segregation of duties
● B. Weakness in access controls
● C. Inadequate documentation
● D. Insufficient training
Answer:
B. Weakness in access controls
Question 6:
During an audit, the internal auditor finds that the company’s inventory records are
inaccurate. Which internal control component might be deficient?
● A. Monitoring activities
● B. Information and communication
● C. Control activities
● D. Risk assessment
Answer:
B. Information and communication
Question 7:
Which of the following is a responsibility of the audit committee?
● A. Preparing financial statements
● B. Selecting and overseeing the external auditors
● C. Managing the internal audit department
● D. Implementing internal controls
PART 1 EXAM TEST AND
COMPLETE SOLUTIONS
What is the primary purpose of internal auditing?
Answer: The primary purpose of internal auditing is to provide independent, objective
assurance and consulting services designed to add value and improve an organization's
operations. Internal auditing helps an organization accomplish its objectives by bringing a
systematic, disciplined approach to evaluate and improve the effectiveness of risk management,
control, and governance processes.
Question 2:
Which of the following is an attribute of a strong internal control environment?
● A. Management's philosophy and operating style
● B. Presence of an audit committee
● C. Segregation of duties
● D. Compliance with all laws and regulations
Answer:
A. Management's philosophy and operating style
Question 3:
An internal auditor is reviewing the process for purchasing supplies and notes that there
is no requirement for competitive bidding. Which internal control principle is most likely
violated?
● A. Authorization of transactions
● B. Segregation of duties
● C. Adequate documentation
● D. Safeguarding of assets
Answer:
A. Authorization of transactions
, Question 4:
Which of the following best describes the role of the internal audit function regarding
risk management?
● A. To manage and implement risk management policies.
● B. To provide assurance that risks are identified and managed effectively.
● C. To be the sole risk owners in the organization.
● D. To develop risk management policies.
Answer:
B. To provide assurance that risks are identified and managed effectively
Question 5:
An internal auditor finds that several employees share the same login credentials to
access a critical financial system. Which control issue does this situation primarily
represent?
● A. Lack of segregation of duties
● B. Weakness in access controls
● C. Inadequate documentation
● D. Insufficient training
Answer:
B. Weakness in access controls
Question 6:
During an audit, the internal auditor finds that the company’s inventory records are
inaccurate. Which internal control component might be deficient?
● A. Monitoring activities
● B. Information and communication
● C. Control activities
● D. Risk assessment
Answer:
B. Information and communication
Question 7:
Which of the following is a responsibility of the audit committee?
● A. Preparing financial statements
● B. Selecting and overseeing the external auditors
● C. Managing the internal audit department
● D. Implementing internal controls
