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IIA Internal Audit Practitioner Sample Questions:

1. Which of the following describes an internal auditor's use of external benchmarking?

A) The auditor evaluates operating income margin between geographical areas within an organization to analyze its profitability.
B) The auditor compares return on equity for a beverage company against its competitor to analyze profitability.
C) The auditor calculates the net profit margin for a business segment to analyze the profitability.

2. An internal auditor is planning a business continuity audit engagement at a remote manufacturing plant. During planning interviews, the plant manager stated that the local Environmental, Health, and Safety (EHS) Department, which reports to the plant manager, had completed a similar review six months ago. The EHS review did not find any significant weaknesses. How should the internal auditor consider the EHS review results in the current audit engagement planning?

A) Recommend canceling the audit engagement, as it would be a duplication of effort to revisit the same process already reviewed by EHS.
B) Ignore the EHS review results, as the department is not a reliable source of information due to its lack of objectivity and independence.
C) Evaluate the objectivity and competency of the EHS reviewers and their work to determine whether their review results may be relied upon.

3. Which of the following describes how the internal audit activity can add the greatest value by assisting management with internal controls?

A) Internal auditors should monitor how internal controls are functioning.
B) Internal auditors should evaluate the effectiveness and efficiency of internal controls.
C) Internal auditors should assist in designing strong controls.

4. Which of the following is considered an organization-level control, as opposed to process-level or transaction- level?

A) Personnel policies requiring the employment of competent personnel, based on training and experience, to manage complex functions such as accounting and financial reporting.
B) Segregated budgeting responsibilities of finance employees, including review and approval of financial reports.
C) Supervision of finance employees, including day-to-day oversight and periodic performance evaluations.

5. Which of the following analytical procedures would be most effective for an internal auditor to examine changes in performance over time?

A) Analysis of common size financial statements
B) Trend analysis
C) Ratio analysis

Solutions: