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The Internal Audit Practitioner (IIA-IAP) Exam is designed to test the knowledge and skills of entry-level internal auditors. It is an internationally recognized certification offered by the Institute of Internal Auditors (IIA), one of the most respected professional organizations in the field of internal auditing. The IIA-IAP Exam covers a broad range of topics, including internal audit basics, risk management, governance, and ethics.

NO.52 Which of the following creates an opportunity for an employee to commit fraud?

Lack of adequate internal controls

Unfair compensation practices

The need for money to pay personal medical bills

NO.53 According to IIA guidance, which of the following are commonly standardized workpaper elements?

Workpapers should include a uniform cross-referencing system

Workpapers should be completed in an electronic format only

Workpapers should be supported by inclusion of original documentation

NO.54 To be organizationally independent, the chief audit executive should administratively report to which of the following?

The audit committee.

The board of directors.

The chief executive officer.

NO.55 What is the primary objective for testing controls?

To determine whether controls are operating effectively.

To understand whether a control is in place.

To identify major patterns of errors or irregularities that might exist in final account balances.

NO.56 Which of the following elements of the Fraud Triangle is directly under the organization’s control?

Pressure

Rationalization

Opportunity

NO.57 Which of the following tools would assist with the coordination of efforts between the internal audit team and operational management?

Automated workpapers.

Continuous auditing.

Control self-assessment.

NO.58 Which of the following statements is true with regard to the adequacy of a control design?

Regardless of the adequacy of control design, it is important to evaluate the operating effectiveness of all key controls to justify the integrity of the internal audit process.

Even if a control is effective, it may not achieve the control objective due to an inadequate design.

Control designs are considered adequate as long as secondary controls will effectively mitigate the risk.

NO.59 Which of the following conditions would threaten an internal auditor’s objectivity?

Providing assurance services over the activity where the internal auditor was employed 10 months prior.

Using knowledge that the internal auditor gained in his previous position to update systems and controls descriptions.

Providing consulting services over the activity where the internal auditor was employed two years prior.

NO.60 What is the primary purpose of a preliminary survey?

To develop a risk and control matrix for the process under review.

To gain an understanding of the process under review.

To determine why the engagement is being performed.

NO.61 Which of the following best explains why internal auditors should identify risk scenarios during a risk assessment of the area being audited?

To determine what would prevent the achievement of objectives in the area being audited.

To determine whether established controls are operating effectively to mitigate critical risks.

To evaluate the adequacy of management’s risk management process in the area being audited.

NO.62 Which of the following statements is appropriate to include in a high-quality internal audit engagement communication?

The internal audit team conducted a review of the financial reporting process prior to year-end. The overall findings have been provided for management’s consideration prior to the completion of the organization’s annual external financial audit.

The internal audit team noted numerous weaknesses in the organization’s internal controls over financial reporting. The team recommends that management determine the root cause of the weaknesses.

The internal audit team conducted an engagement under the assumption that significant control weaknesses were likely. The purpose of the review was to uncover those weaknesses.

NO.63 Which of the following would have the most direct impact on management’s decision regarding the amount of risk that is considered acceptable?

Risk capacity.

Risk appetite.

Risk perception.

NO.64 An internal auditor wants to establish the reasonableness of the current period’s total payroll costs for the finance department. She divides the actual monthly payroll cost by the number of employees to derive an average cost per employee. Which of the following comparisons to this average cost would be considered trend analysis?

The mean of all actual salary amounts.

Similar data for the department from two prior periods.

Budgeted information of another organization in the same industry.

NO.65 During a review of the payroll department, a payroll associate informs the internal auditor, in confidence, that a co-worker is under a great deal of personal stress and has made several uncharacteristic mistakes over the past few weeks. The payroll associate asks the auditor to be sympathetic to the co-worker when drafting the audit findings. If the auditor adjusts the audit findings in consideration of this request, which of the following IIA Code of Ethics principles would be violated?

Integrity and Objectivity.

Objectivity and Confidentiality.

Integrity and Confidentiality.

NO.66 The internal audit activity has been tasked with evaluating the effectiveness of the organization’s risk management processes. Which of the following activities are appropriate and relevant to consider in the overall evaluation?

The chief audit executive’s observations of the organization’s finance committee

An external audit of the organization’s corporate social responsibility and sustainability management, including communication of findings to management and the board

Evaluation of risk management effectiveness obtained during multiple audit engagements over the past year

NO.67 Which of the following is the best audit procedure to determine whether all of a bank’s loans are backed by sufficient collateral, properly aged as to current payments, and properly categorized as current or noncurrent?

Use generalized audit software to read the total loan file, age the file by last payment due, and select a statistical sample stratified by the current and aged population. Examine each loan selected for proper collateralization and aging.

Select a block sample of all loans in excess of a specified dollar limit and determine whether they are current and properly categorized. For each loan approved, verify aging and categorization.

Select a discovery sample of all loan applications to determine whether each application contains a statement of collateral.

NO.68 The chief audit executive scheduled an exit meeting to discuss conclusions and recommendations with management before issuing the final engagement communication. Which of the following describes the primary reason that the exit meeting should be documented?

The Standards require that the internal auditor document exit meetings

The information may be needed if a disagreement about the content arises

The results of the discussion form part of the internal auditor’s performance review

NO.69 In addition to the internal auditor, which of the following parties need to be present at an exit or closing conference?

Audit committee members

Management over areas covered by the engagement

The chief executive officer

NO.70 During an accounts payable audit engagement, the internal auditor identified a risk that vendor invoices may be paid multiple times. Which of the following would be appropriate preventive controls to mitigate this risk?

System controls to identify identical invoice amounts from the same vendor that prohibit payment after the initial invoice.

System controls to identify identical invoice numbers and dates from the same vendor prior to payment.

Manual controls requiring the reconciliation of paid vendor invoices to monthly invoice statements provided by the vendor.

NO.71 A senior internal auditor is planning a compliance audit of the organization’s global purchasing department.
Which of the following criteria is a relevant consideration for establishing the engagement objectives?

A list of all items acquired through the organization’s global purchasing department in the past year

Current governance laws and regulations in the countries in which the organization operates

Location of all global operations that acquire goods through the organization’s global purchasing department

NO.72 Operational management has asked the internal auditor for recommendations regarding an ineffective process. According to IIA guidance, which of the following would be the auditor’s most appropriate response?

Refrain from providing recommendations to preserve audit independence.

Agree to offer recommendations based on observations and conclusions.

Explain that only management should recommend and implement the corrective action.

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