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Internal Audit Exam Final Questions and
Answers (Expert Solutions)
Q: Which of the following would be a typical consulting engagement activity performed
by the internal audit function?
ANS 🗹🗹: Reviewing and commenting on a draft of a new ethics policy created by
the company.
Q: Which of the following is not a required consideration regarding proficiency and due
professional care when choosing to perform a consulting engagement?
ANS 🗹🗹: Potential impact on the independent outside auditor's financial statement
audit.
Q: Senior management of an organization has requested that the internal audit function
help educate employees about internal control concepts. This work is an example of:
ANS 🗹🗹: A training consulting engagement.
Q: It would be appropriate for the internal audit function to perform which of the
following:
ANS 🗹🗹: Review a new IT application before implementation.
Q: Which of the following is not likely to be a step during a consulting engagement?
ANS 🗹🗹: Expressing a conclusion on the design adequacy and operating
effectiveness of a process.
Q: The chief operating officer (COO) has requested that the internal audit function advise
her regarding a new incentive plan being developed for sales representatives. Which of
the following tasks should the CAE decline with respect to providing advice to the COO?
ANS 🗹🗹: Determining the appropriate bonus formula for inclusion in the plan.
Q: When conducting a consulting engagement to improve the efficiency of a production
process, the internal audit team is faced with a scope limitation because several months of
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the production data has been lost or is incomplete. Faced with this scope limitation, the
CAE should:
ANS 🗹🗹: Discuss the problem with the customer and together evaluate whether the
engagement should be continued.
Q: The audit committee has requested that the internal audit function assist with the
annual risk assessment process. What type of consulting engagement does this assistance
represent?
ANS 🗹🗹: A facilitative consulting engagement.
Q: A financial services organization is planning on staffing a complex consulting
engagement that involves the consolidation of two large banking organizations, including
changing many of the processes. Which of the following skills is the least important skill
for auditors to possess in assisting in the review of target processes?
ANS 🗹🗹: Experience in performing testing of controls.
Q: Internal auditors are working to become trusted advisors to management on risk
management techniques. Which of the following would be the best way for internal audit
to demonstrate they are truly a trusted advisor?
ANS 🗹🗹: Providing guidance and audit resources to develop an enterprise risk
management process for the organization.
Q: Which of the following areas of culture presents the greatest challenge for internal
audit functions who want to become trusted advisors?
ANS 🗹🗹: Educating all areas on the internal audit function's role in performing
consultative internal audit services.
Q: Which of the following best describes internal audit workpapers for consulting
engagements?
ANS 🗹🗹: Workpaper requirements for consulting engagements are similar to
assurance engagements but typically have less documentation.
Q: Which auditor will be the most successful in being perceived as a "Trusted Advisor"?
ANS 🗹🗹: One who collaborates with management to reach a consensus on the best
solution to balance controls and efficient processes.
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Q: In which of the following scenarios do consulting services provided by the internal
audit function prove to be most beneficial?
ANS 🗹🗹: An organization that has frequent, significant change.
Q: What is the difference between a blended engagement and a consulting engagement?
ANS 🗹🗹: Blended engagements include components of both assurance and
consulting services.
Q: The chief operating officer (COO) has requested that the internal audit function advise
her regarding a new incentive plan being developed for sales representatives. Which of
the following tasks should the CAE decline with respect to providing advice to the COO?
ANS 🗹🗹: Determining the appropriate bonus formula for inclusion in the plan
Q: Which of the following would be a typical consulting engagement activity performed
by the internal audit function?
ANS 🗹🗹: Reviewing and commenting on a draft of a new ethics policy created by
the company.
Q: When conducting a consulting engagement to improve the efficiency of a production
process, the internal audit team is faced with a scope limitation because several months of
the production data has been lost or is incomplete. Faced with this scope limitation, the
CAE should:
ANS 🗹🗹: Discuss the problem with the customer and together evaluate whether the
engagement should be continued.
Q: It would be appropriate for the internal audit function to perform which of the
following:
ANS 🗹🗹: Review a new IT application before implementation.
Q: Senior management of an organization has requested that the internal audit function
help educate employees about internal control concepts. This work is an example of:
ANS 🗹🗹: A training consulting engagement.
Q: Which of the following would be a typical consulting engagement activity performed
by the internal audit function?
Internal Audit Exam Final Questions and
Answers (Expert Solutions)
Q: Which of the following would be a typical consulting engagement activity performed
by the internal audit function?
ANS 🗹🗹: Reviewing and commenting on a draft of a new ethics policy created by
the company.
Q: Which of the following is not a required consideration regarding proficiency and due
professional care when choosing to perform a consulting engagement?
ANS 🗹🗹: Potential impact on the independent outside auditor's financial statement
audit.
Q: Senior management of an organization has requested that the internal audit function
help educate employees about internal control concepts. This work is an example of:
ANS 🗹🗹: A training consulting engagement.
Q: It would be appropriate for the internal audit function to perform which of the
following:
ANS 🗹🗹: Review a new IT application before implementation.
Q: Which of the following is not likely to be a step during a consulting engagement?
ANS 🗹🗹: Expressing a conclusion on the design adequacy and operating
effectiveness of a process.
Q: The chief operating officer (COO) has requested that the internal audit function advise
her regarding a new incentive plan being developed for sales representatives. Which of
the following tasks should the CAE decline with respect to providing advice to the COO?
ANS 🗹🗹: Determining the appropriate bonus formula for inclusion in the plan.
Q: When conducting a consulting engagement to improve the efficiency of a production
process, the internal audit team is faced with a scope limitation because several months of
, Page | 2
the production data has been lost or is incomplete. Faced with this scope limitation, the
CAE should:
ANS 🗹🗹: Discuss the problem with the customer and together evaluate whether the
engagement should be continued.
Q: The audit committee has requested that the internal audit function assist with the
annual risk assessment process. What type of consulting engagement does this assistance
represent?
ANS 🗹🗹: A facilitative consulting engagement.
Q: A financial services organization is planning on staffing a complex consulting
engagement that involves the consolidation of two large banking organizations, including
changing many of the processes. Which of the following skills is the least important skill
for auditors to possess in assisting in the review of target processes?
ANS 🗹🗹: Experience in performing testing of controls.
Q: Internal auditors are working to become trusted advisors to management on risk
management techniques. Which of the following would be the best way for internal audit
to demonstrate they are truly a trusted advisor?
ANS 🗹🗹: Providing guidance and audit resources to develop an enterprise risk
management process for the organization.
Q: Which of the following areas of culture presents the greatest challenge for internal
audit functions who want to become trusted advisors?
ANS 🗹🗹: Educating all areas on the internal audit function's role in performing
consultative internal audit services.
Q: Which of the following best describes internal audit workpapers for consulting
engagements?
ANS 🗹🗹: Workpaper requirements for consulting engagements are similar to
assurance engagements but typically have less documentation.
Q: Which auditor will be the most successful in being perceived as a "Trusted Advisor"?
ANS 🗹🗹: One who collaborates with management to reach a consensus on the best
solution to balance controls and efficient processes.
, Page | 3
Q: In which of the following scenarios do consulting services provided by the internal
audit function prove to be most beneficial?
ANS 🗹🗹: An organization that has frequent, significant change.
Q: What is the difference between a blended engagement and a consulting engagement?
ANS 🗹🗹: Blended engagements include components of both assurance and
consulting services.
Q: The chief operating officer (COO) has requested that the internal audit function advise
her regarding a new incentive plan being developed for sales representatives. Which of
the following tasks should the CAE decline with respect to providing advice to the COO?
ANS 🗹🗹: Determining the appropriate bonus formula for inclusion in the plan
Q: Which of the following would be a typical consulting engagement activity performed
by the internal audit function?
ANS 🗹🗹: Reviewing and commenting on a draft of a new ethics policy created by
the company.
Q: When conducting a consulting engagement to improve the efficiency of a production
process, the internal audit team is faced with a scope limitation because several months of
the production data has been lost or is incomplete. Faced with this scope limitation, the
CAE should:
ANS 🗹🗹: Discuss the problem with the customer and together evaluate whether the
engagement should be continued.
Q: It would be appropriate for the internal audit function to perform which of the
following:
ANS 🗹🗹: Review a new IT application before implementation.
Q: Senior management of an organization has requested that the internal audit function
help educate employees about internal control concepts. This work is an example of:
ANS 🗹🗹: A training consulting engagement.
Q: Which of the following would be a typical consulting engagement activity performed
by the internal audit function?
