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IIA Internal Audit Practitioner Sample Questions:

1. Which of the following would have the most direct impact on management's decision regarding the amount of risk that is considered acceptable?

A) Risk perception.
B) Risk appetite.
C) Risk capacity.

2. Which of the following conditions would threaten an internal auditor's objectivity?

A) Providing consulting services over the activity where the internal auditor was employed two years prior.
B) Using knowledge that the internal auditor gained in his previous position to update systems and controls descriptions.
C) Providing assurance services over the activity where the internal auditor was employed 10 months prior.

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

A) The need for money to pay personal medical bills
B) Lack of adequate internal controls
C) Unfair compensation practices

4. Which of the following best describes the difference between inherent risk and residual risk?

A) Inherent risk is the level of risk the organization is willing to accept, residual risk is the level of risk deemed unacceptable by the organization.
B) Inherent risk is the level of risk in the absence of any targeted actions or controls to alter its severity, residual risk is the risk remaining after implementing corrective actions.
C) Inherent risk is the level of risk before the risk assessment process, residual risk is the level of risk remaining after completing the risk assessment process.

5. 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) Only qualified procurement professionals should manage the procurement process.
C) The procurement process must be comprehensively documented.

Solutions: