Welcome to your Internal Audit Diploma Exam

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  1. Study Material
  2. International Professional Practices Framework (IPPF)
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1 / 40

The internal auditing activity (IAA) encounters a scope limitation from senior management that will affect its ability to meet its goals and objectives for a potential engagement client.

The nature of the scope limitation should be:

2 / 40

Which of the following describes a control weakness?

3 / 40

Auditing standards state that "reports may include recommendations for potential improvements." Which of the following would be a valid justification for omitting recommendations in an audit report?

The auditor:

4 / 40

One payroll audit objective is to determine if there is proper segregation of duties. Which of the following activities are incompatible?

5 / 40

Which of the following is an appropriate responsibility of an audit committee?

6 / 40

Which of the following controls would most likely minimize defects in finished goods because of poor quality raw materials?

7 / 40

As a staff auditor, which of the following actions would be considered a violation of the Standards or Code of Ethics?

8 / 40

Which of the following best defines control?

9 / 40

A multinational corporation has an office in a foreign branch with a money transfer facility. Effective internal control requires that:

10 / 40

  • An internal auditor observes that a receivables clerk has physical access to and control of cash receipts.
  • The auditor worked with the clerk several years before and has a high level of trust in the individual.
  • Accordingly, the auditor notes in the engagement working papers that controls over receipts are adequate.

Based on this information, has the auditor exercised due professional care?

11 / 40

The Standards would not require the chief audit executive (CAE) to:

12 / 40

Effective internal control:

13 / 40

The purposes of the Standards include all of the following except:

14 / 40

Due to professional care calls for:

15 / 40

An internal auditor who suspects fraud should:

16 / 40

Communication skills are important to internal auditors. They should be able to convey effectively all of the following to engagement clients except:

17 / 40

A working paper is complete when it:

18 / 40

An internal auditor's responsibility for reporting fraud includes:

19 / 40

Which of the following activities is not presumed to impair the objectivity of an internal auditor?

  1. Recommending standards of control for a new information system application
  2. Drafting procedures for running a new computer application to ensure that proper controls are installed
  3. Performing reviews of procedures for a new computer application before it is installed

20 / 40

An appropriate internal auditing role in a feasibility study is to:

21 / 40

An element of authority that should be included in the charter of the internal audit activity (IAA) is:

22 / 40

Independence permits internal auditors to render impartial and unbiased judgments. The best way to achieve independence is through:

23 / 40

Budgets are a necessary component of financial decision making because they help provide a(n):

24 / 40

The internal auditors' responsibility for the prevention of fraud includes all of the following except:

25 / 40

Who should have the least influence on the appointment of the chief audit executive (CAE)?

26 / 40

Due to professional care implies reasonable care and competence, not infallibility or extraordinary performance. Thus, which of the following is unnecessary?

27 / 40

Internal auditors often include summaries within their working papers. Which of the following best describes the purpose of such summaries?

28 / 40

To minimize the risk that agents in the purchasing department will use their positions for personal gain, the organization should:

29 / 40

A key feature that distinguishes fraud from other types of crime or impropriety is that fraud always involves the:

30 / 40

An internal auditor who had been supervisor of the accounts payable section should not perform an assurance review of that section:

31 / 40

Proficiency is required of internal auditors with respect to which discipline?

32 / 40

An activity appropriately performed by the internal auditing activity (IAA) is:

33 / 40

If the internal audit activity does not have the skills to perform a particular task, an outside service provider could be brought in from:

  1. The organization's external audit firm.
  2. An outside consulting firm
  3. The engagement client
  4. A college or university

34 / 40

The procedure requiring preparation of a prelisting of incoming cash receipts, with copies of the prelist going to the cashier and to accounting, is an example of which type of control?

35 / 40

The audit committee strengthens the control processes of an organization by:

36 / 40

Which of the following most seriously compromises the independence of the internal audit activity?

37 / 40

Assuming that the internal auditing staff possesses the necessary experience and training, which of the following services is most appropriate for a staff internal auditor to undertake?

38 / 40

A primary purpose for establishing a code of conduct within a professional organization is to:

39 / 40

Which of the following gives the internal auditor the authority to investigate fraud?

40 / 40

Formal internal quality assessment of the internal audit activity (IAA) primarily serve the needs of:


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