IIA Certification in Risk Management Assurance Sample Questions:

1. Which of the following decisions made during the testing phase of a compliance audit requires the most judgment by an internal auditor?

A) What level of noncompliance is acceptable.
B) Which sampling methodology to select for testing.
C) Which fields to examine on each invoice.
D) Whether an individual expenditure is allowable.

2. Which of the following is the most effective strategy to manage the risk of foreign exchange losses due to sales to foreign customers?

A) Insist that customers only pay in a stable currency.
B) Hire a risk consultant.
C) Maintain a large foreign currency balance.
D) Implement a hedging strategy.

3. Which of the following is a valid statement about the use of visual observations during an audit engagement?
1. Visual observations can be used to detect ineffective controls, idle resources, and safety hazards.
2. Visual observations can be used during both preliminary survey and fieldwork stages of the audit engagement.
3. Visual observations can provide unsubstantiated facts to management if the internal auditor believes the information is useful.
4. Visual observations can assist an auditor in determining if a material observation should be communicated through informal means to the organization's senior management.

A) 3 and 4 only
B) 2 and 3 only
C) 1 and 2 only
D) 1 and 4 only

4. A former line supervisor from the Financial Services Department has completed six months of a two-year development opportunity with the internal audit activity (IAA). She is assigned to a team that will audit the organization's payroll function, which is managed by the Human Resources Department. Which of the following statements is most relevant regarding her independence and objectivity with respect to the payroll audit?

A) She may participate, because she did not previously work in the Human Resources Department.
B) She may participate for training purposes, to build her knowledge of the IAA.
C) She may participate, but only after she has completed one year with the IAA.
D) She may participate, but she must be supervised by the auditor in charge.

5. Which of the following is an example of collusion?

A) An employee works with the IT manager to develop a program for identifying duplicate invoice payments.
B) A vendor sends a duplicate invoice with a new invoice number, and the accounts payable system fails to detect the duplication.
C) An employee includes a faked receipt in his expense claim, and the claim is signed by the employee's manager.
D) A vendor inflates the price of an item and remits a portion of the excess to the purchasing manager.

Solutions: