Question 1

Management has implemented a segregation-of-duties policy for handling inventory. Which of the following fraud risks would be more concerning to an internal auditor following the implementation of this new policy?

Options :

A : The risk of collusion between parties.

B : The risk of falsified reconciliations.

C : The risk of low-liquidity inventory.

Answer: B

Question 2

When planning an assurance engagement in a sales department, an internal auditor wants to obtain a general understanding of the sales returns statuses by reviewing the sales return files in the IT system. Which of the following competencies is important for the internal auditor to conduct this task?

Options :

A : Data analytics.

B : Risk assessment.

C : Information gathering.

D : Organizational behavior awareness.

Answer: A

Question 3

During an audit of an organization's accounts payable area, an internal auditor identified anomalies in the information examined that may indicate potential fraud. Which test should the auditor perform first to verify this?

Options :

A : Verify the completeness and integrity of the data being analyzed.

B : Identify duplicated organizational transactions.

C : Analyze all transactions within the targeted area.

D : Check control totals that have may have been falsified.

Answer: A

Question 4

Which of the following statements best describes internal auditors’ role in fraud detection?

Options :

A : Internal auditors’ roles are similar to those performed by loss prevention managers or fraud investigators.

B : Internal auditors’ demonstration of adequate professional skepticism during an audit engagement is of paramount importance.

C : Internal auditors should consider fraud risks in every assignment and demonstrate due care by detecting fraud instances.

D : Internal auditors should possess a fraud-related body of knowledge, enabling them to carry out preventative and detective measures.

Answer: B

Question 5

Which of the following would be a violation of the IIA Code of Ethics?

Options :

A : Reporting information that could be damaging to the organization, at the request of a court of law.

B : Including an issue in the final audit report after management has resolved the issue.

C : Participating in an audit engagement for which the auditor does not have the necessary experience or training.

D : Accepting a gift that is a commercial advertisement available to the public.

Answer: C

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