IIA-CHAL-QISA Free Practice Test

A chief audit executive (CAE) identifies that the internal audit activity lacks a necessary skill to perform a management request for a consulting engagement. According to IIA guidance, which of the following Is the most appropriate action the CAE should take regarding the request?

1. A. Assign the engagement to a more senior internal auditor.
2. B. Decline the engagement request.
3. C. Allow the internal auditors to acquire the needed skills while performing the engagement.
4. D. Supervise the assigned internal auditors throughout the engagement.

Correct Answer: B
According to the IIA's Standards, specifically Standard 1210 - Proficiency, internal auditors must possess the knowledge, skills, and other competencies needed to perform their individual responsibilities. If the internal audit activity lacks the necessary skill set to conduct a requested consulting engagement, the most appropriate action for the CAE is to decline the engagement request. This ensures that the internal audit activity does not compromise the quality and effectiveness of its services.
Reference: IIA Standard 1210 - Proficiency

According to IIA guidance, which of the following actions by the chief audit executive would best ensure that internal auditors demonstrate due professional care?

1. A. Developing policies and procedures for the internal audit activity
2. B. Ensuring the internal audit activity is not found fallible during audit engagements.
3. C. Undertaking all engagements that management requests of the internal audit activity.
4. D. Ensuring the internal audit activity reports functionally to the board of directors

Correct Answer: A
✑ Professional Care:Ensuring that internal auditors demonstrate due professional care involves establishing clear policies and procedures that guide their activities.
✑ Guidance and Standards:These policies and procedures help ensure that the internal audit activity adheres to professional standards and best practices.
✑ Standard Compliance:According to the IIA??s Performance Standard 2040 – Policies and Procedures, the CAE must establish policies and procedures to guide the internal audit activity.
✑ Quality Assurance:Properly developed policies and procedures contribute to the overall quality and effectiveness of the internal audit activity, ensuring that engagements are conducted with due professional care.
References:
✑ IIA Standard 2040 – Policies and Procedures .

Which of the following could increase risks to the organization??s control environment?

1. A. Strong board of directors oversight.
2. B. Incentive-based compensation structures
3. C. Lower than average employee turnover.
4. D. Implementation of a fraud hotline

Correct Answer: B
Incentive-based compensation can increase the risk of unethical behavior or fraudulent activities as employees might be tempted to manipulate results to achieve their performance targets.
This could undermine the control environment and lead to significant risks if not managed properly

An organization has a mature control environment but limited internal audit resources. Given this scenario, on which of the following should the internal auditors focus their testing?

1. A. Detective compensating controls
2. B. Preventive compensating controls.
3. C. Detective key controls.
4. D. Preventive key controls

Correct Answer: D
When internal audit resources are limited, it is crucial to focus on the most critical aspects of the control environment. Preventive key controls are designed to prevent errors or irregularities from occurring, which are essential for maintaining a strong control environment. Given the mature control environment of the organization, prioritizing preventive key controls ensures that potential issues are addressed before they materialize, providing a proactive approach to risk management.
Reference: IIA Practice Guide "Assessing the Adequacy of Internal Controls"

Which of the following best demonstrates that the internal audit activity is using due professional care?

1. A. The internal audit activity reports directly to the board on the engagements it performs.
2. B. Internal auditors undertake the necessary training to complete their audit work.
3. C. The completion of engagements is based on the assumption that fraudulent activities may exist.
4. D. Internal auditors consider the use of technology-based audit and other data analysis techniques

Correct Answer: D
Demonstrating due professional care involves using appropriate technology and data analysis techniques to enhance the audit's effectiveness and efficiency. These tools help auditors identify anomalies, trends, and potential areas of risk more accurately and timely, reflecting a higher standard of care in their audit activities.
References:
✑ "Auditing Standards and Guidelines," which emphasize the importance of using advanced techniques in audit processes.