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Share some IIA-IAP exam online questions below.

1.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?
A. It helps the internal auditors maintain a required level of proficiency.
B. It helps the internal audit activity attain an appropriate organizational status to maintain
independence.
C. It assists the CAE with assessing the results of the internal audit team's development efforts.
Answer: A
Explanation:
Reference to IIA Standards:
Standard 1210 - Proficiency: Internal auditors must possess the knowledge, skills, and competencies
needed to perform their responsibilities.
Continuous professional development ensures the internal audit team maintains proficiency.
Reasoning:
Option A is correct because training enhances the skills and proficiency of the internal audit team,
aligning with the requirement to maintain technical and professional competence.
Option B (organizational status for independence) relates to governance and reporting relationships,
not training.
Option C (assessing development efforts) is a secondary benefit and not the primary goal of providing
training.
Impact of Training:
A well-trained audit team improves the quality of engagements, ensures adherence to professional
standards, and supports the overall effectiveness of the internal audit activity.

2.Which of the following best ensures that the internal audit activity is free from undue interference
from management?
A. Audit policies and procedures that are comprehensive and well-documented, in accordance with
the Standards.
B. A board audit committee that is composed of competent, independent members.
C. An audit charter that defines the chief audit executive's functional reporting relationship with the
board.
Answer: C
Explanation:
Reference to IIA Standards:
Standard 1110 - Organizational Independence: The chief audit executive (CAE) must report
functionally to the board to ensure independence.
The audit charter must define the CAE’s functional reporting line to the board, securing protection
from undue management influence.
Reasoning:
Option C addresses the foundational document?the audit charter?that establishes the CAE’s
authority and independence.
Option A refers to operational standards, but they do not directly safeguard against interference.
Option B strengthens governance but is secondary to the audit charter in securing independence.
Impact:
A robust audit charter formalizes the CAE’s reporting relationship and ensures organizational
independence, empowering internal audit.

3.A member of the internal audit team worked eight months ago in an area of the organization that
she is now being tasked with auditing.
Which of the following would most likely be impacted by her participation in the audit?
A. Integrity
B. Objectivity
C. Competency
Answer: B
Explanation:
Reference to IIA Standards:
Standard 1120 - Individual Objectivity: Internal auditors must perform engagements with honesty and
without any bias.
Serving in an operational or management role in the area being audited within the past year can
impair objectivity, as the auditor may unconsciously favor or critique processes they were involved in
developing or managing.
Reasoning:
Option B is correct because recent involvement in the audited area could compromise objectivity,
leading to potential conflicts of interest or biased assessments.
Option A (integrity) is less likely impacted, as integrity relates to adherence to ethical principles and
honesty.
Option C (competency) is not affected, as the individual’s skills and knowledge remain intact
regardless of the recency of their involvement.
Mitigating Actions:
The chief audit executive (CAE) should evaluate and address potential impairments to objectivity,
possibly assigning the auditor to a different engagement.

4.During an assurance engagement of an organization's procurement process, an internal auditor

obtained the policy that specified the authorized dollar limits for invoices. This document would best
support which of the following attributes of an audit report?
A. Effect
B. Condition
C. Criteria
Answer: C
Explanation:
Reference to Audit Report Elements:
Criteria: The benchmark or standard used for comparison during the audit (e.g., policies, regulations,
contracts).
Condition: The factual observation or evidence identified during the audit. Effect: The impact or
consequence of the condition on the organization. Reasoning:
Option C is correct because the procurement policy specifies authorized limits, serving as the
standard (criteria) against which compliance is assessed.
Option B (condition) refers to the actual state of observed controls, processes, or compliance, not the
benchmark.
Option A (effect) describes the potential or realized impact of non-compliance but not the standard
itself.
Importance of Criteria:
Criteria provide a clear benchmark, ensuring that findings are communicated with context and
actionable insights.

5.What is the primary objective for testing controls?

A. To determine whether controls are operating effectively.
B. To understand whether a control is in place.
C. To identify major patterns of errors or irregularities that might exist in final account balances.
Answer: A
Explanation:
Reference to IIA Standards:
Standard 2130 - Control: Internal auditors must assess whether internal controls are designed and
operating effectively to mitigate identified risks.
Standard 2200 - Engagement Planning: The objective of testing controls is to evaluate their
effectiveness in achieving the desired outcomes.
Reasoning:
Option A is correct because the main goal of testing controls is to determine whether they are
functioning effectively to manage the identified risks and achieve control objectives.
Option B (understanding whether a control is in place) focuses on control design but not its
operational effectiveness.
Option C (identifying patterns of errors) is related to detecting irregularities, not directly testing the
control's effectiveness.
Effectiveness of Controls:
Internal audit testing focuses on evaluating the effectiveness and operational efficiency of controls to
ensure they reduce risks to an acceptable level.

6.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?
A. Preventive
B. Directive
C. Detective
Answer: A
Explanation:
Reference to Internal Controls:
Preventive controls are designed to prevent errors, fraud, or irregularities before they occur by
ensuring that processes and activities are performed correctly from the start.
Standard 2130 - Control: Internal auditors assess the design and effectiveness of controls to prevent
risks from materializing.
Reasoning:
Option A is correct because segregation of duties (ordering, receiving, and paying) is a preventive
control, as it prevents a single person from having the authority to initiate, authorize, and complete a
transaction, reducing the risk of fraud or errors.
Option B (Directive) would focus on guiding behavior, such as setting policies or expectations.
Option C (Detective) refers to controls that identify and detect errors after they occur, such as audits
or reviews.
Impact of Segregation of Duties:
By ensuring duties are segregated, organizations minimize the risk of fraudulent activities and errors,
thus acting as a preventive measure.

7.Which of the following would an internal auditor most likely use to document a complex process that
includes risks and controls, timelines, and ownership of key steps?
A. Process map.
B. Detailed flowchart.
C. Risk and control matrix.
Answer: C
Explanation:
Reference to IIA Standards:
Standard 2330 - Documenting Information: Internal auditors are required to document audit evidence
and processes in a way that is clear, complete, and supports audit conclusions.
Risk and control matrices are effective for documenting risks, controls, and related responsibilities in
a structured way.
Reasoning:
Option C is correct because a risk and control matrix clearly documents processes, the associated
risks, control activities, and ownership of each step. It is the most suitable tool for understanding risks
and controls along with associated timelines and responsibilities.
Option A (process map) documents the steps in a process but does not directly link risks and
controls.
Option B (detailed flowchart) is used to map the flow of a process but also lacks the structure for
detailing risks and control ownership.
Best Practice for Documentation:
A risk and control matrix is the most structured and comprehensive tool for documenting complex
processes that involve risks, controls, and ownership.

8.During a procurement process consulting engagement, the internal auditors reviewed contracts for
the hospital's supply of medicine.
Which of the following would the internal auditors most likely recommend to improve the effectiveness
of the procurement process?
A. The procurement process should begin with clearly specified needs.
B. The procurement process must be comprehensively documented.
C. Only qualified procurement professionals should manage the procurement process.
Answer: A
Explanation:
Reference to Best Practices in Procurement:
Clearly specifying needs at the outset ensures that procurement decisions align with organizational
objectives and operational requirements.
Reasoning:
Option A is correct because specifying needs at the beginning helps avoid over-purchasing, under-
purchasing, or acquiring unsuitable items, thus improving the overall effectiveness of the procurement
process.
Option B (comprehensive documentation) is important for transparency and compliance but does not
directly improve the effectiveness of procurement outcomes.
Option C (qualified professionals) ensures competence but is secondary to having clear, specified
needs driving the process.
Impact of Clear Needs Specification:
It ensures the procurement process delivers value, meets quality requirements, and aligns with
operational demands.

9.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?
A. Reviewing the results of control effectiveness testing of the fixed asset capitalization subprocess.
B. Interviews with fixed asset management, control process walkthroughs, and internal control
questionnaires.
C. Management's cost-benefit analysis of internal control alternatives considered in the design of the
fixed asset accounting process.
Answer: B
Explanation:
Gathering Inputs for the Matrix: Interviews, walkthroughs, and questionnaires are primary tools for
gathering detailed insights into risks, controls, and processes. These activities provide the information
necessary to populate a risk and control matrix effectively.
Reference: IIA Practice Guide on Risk and Control Matrices highlights the importance of using
firsthand observations and management input to complete the matrix.
Other Options:
Option A: Results from control testing provide insights into control effectiveness but are not primary
sources for developing the matrix.
Option C: Cost-benefit analysis informs design decisions but does not directly provide matrix inputs.
Thus, the correct answer is B. Interviews with fixed asset management, control process walkthroughs,
and internal control questionnaires.

10.An internal auditor was gathering information regarding the receiving process and decided that a
narrative memorandum was the best way to document the process.
Which of the following explanations best supports the auditor's decision?
A. The department has comprehensive manuals
B. The process is simple and does not need a visual depiction
C. The audit engagement is not considering efficiency
Answer: B
Explanation:
Narrative Memorandum: A narrative is most suitable for documenting simple processes that do not
require detailed visuals or flowcharts for clarity. If the process can be effectively described in writing, a
narrative is appropriate.
Reference: IIA Practice Guide on Process Mapping recommends narratives for straightforward
processes while reserving diagrams or flowcharts for complex workflows.
Other Options:
Option A: Comprehensive manuals do not necessarily eliminate the need for effective documentation
of the process.
Option C: While efficiency is a factor, it does not explain the preference for a narrative memorandum.
Thus, the correct answer is B.

11.Which of the following is the most appropriate audit objective?

A. Analyze the turnover rates in mining and production subsidiaries.
B. Evaluate common practices of hiring via interviews with responsible personnel.
C. Assess compliance with human resources hiring and compensation policies.
Answer: C
Explanation:
Reference to IIA Standards:
Standard 2210 - Engagement Objectives: Audit objectives must align with the engagement scope and
focus on evaluating compliance, efficiency, and effectiveness.
Reasoning:
Option C is correct because assessing compliance with HR policies is a specific, measurable, and
relevant objective aligned with internal audit’s role in evaluating governance and control processes.
Option A (analyzing turnover rates) is more investigative and does not align with assessing processes
or compliance.
Option B (evaluating common practices) is vague and lacks a clear link to controls, policies, or risks.
Impact of Clear Objectives:
Well-defined objectives, like compliance assessment, ensure the audit delivers actionable insights
and adds value to the organization.

12.When determining the appropriate level of resources needed for an engagement, which of the
following would be the first step?
A. Determine the sufficiency of internal audit staff
B. Identify required technology and audit tools
C. Determine travel and related costs for the engagement
Answer: A
Explanation:
Resource Sufficiency: Ensuring that the internal audit team has sufficient staff with the appropriate
expertise is the foundational step in resource planning for an engagement.
Reference: IIA Standard 2230: Resource Allocation requires determining the sufficiency of resources
before initiating an engagement.
Other Options:
Option B: Technology requirements are secondary considerations after staffing needs are assessed.
Option C: Travel costs are logistical details addressed later in planning.
Thus, the correct answer is A.

13.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?
A. Ignore the EHS review results, as the department is not a reliable source of information due to its
lack of objectivity and independence.
B. Recommend canceling the audit engagement, as it would be a duplication of effort to revisit the
same process already reviewed by EHS.
C. Evaluate the objectivity and competency of the EHS reviewers and their work to determine whether
their review results may be relied upon.
Answer: C
Explanation:
Reference to IIA Standards:
Standard 1220 - Due Professional Care: Internal auditors must consider the reliability of other
assurance providers.
Standard 2050 - Coordination and Reliance: Internal auditors may rely on the work of other assurance
providers if their objectivity, independence, and competency are assessed and deemed adequate.
Why Evaluate EHS Work:
The EHS review results can be useful if the review process was thorough, objective, and performed
by competent individuals.
Dismissing their results without evaluation (Option A) could lead to inefficiencies or redundant work.
Canceling the engagement entirely (Option B) ignores the internal audit's responsibility for
independent assurance.
Audit Planning Impact:
By leveraging the EHS review where appropriate, the internal auditor can focus resources on other
areas not covered or on verifying key findings.

14.Which of the following is a common computer-assisted audit tool used to analyze data?
A. Social media
B. Spreadsheet software
C. Word processing software
Answer: B
Explanation:
Spreadsheet Software: Tools like Microsoft Excel are commonly used for data analysis in auditing
due to their powerful data manipulation, calculation, and visualization capabilities.
Example: Auditors use spreadsheets for sampling, trend analysis, and creating pivot tables.
 Reference: The IIA Practice Guide on Computer-Assisted Audit Tools (CAATs) identifies spreadsheet
software as a common and versatile tool.
Other Options:
Social Media: Not relevant for data analysis in auditing.
Word Processing Software: Useful for documentation but not designed for data analysis.
Thus, the correct answer is
B. Spreadsheet Software.

15.Which of the following creates an opportunity for an employee to commit fraud?

A. Lack of adequate internal controls
B. Unfair compensation practices
C. The need for money to pay personal medical bills
Answer: A
Explanation:
Opportunity: In the Fraud Triangle, "opportunity" refers to the ability to commit fraud due to
weaknesses in internal controls, such as poor segregation of duties, lack of oversight, or inadequate
monitoring systems. These factors are directly within the organization’s control to address.
Reference: IIA Practice Guide on Fraud Risk Management identifies internal control deficiencies as a
key enabler of fraud.
Other Options:
Unfair Compensation Practices (B): This may contribute to "pressure," not opportunity.
The Need for Money (C): Represents "pressure" due to personal financial issues.
Thus, the correct answer is
A. Lack of adequate internal controls.

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