2025 Realistic IAA-IAP Dumps Exam Tips Test Pdf Exam Material [Q57-Q75]

QUESTION 57
During which stage of an audit engagement would the engagement supervisor identify the tasks that were already completed and the remaining tasks to be performed?

When allocating resources.

When developing the test approach.

When documenting the work program.

QUESTION 58
Which of the following situations is most likely to require a compliance engagement from the internal audit activity?

An organization must restate its financial statements due to an error in fixed asset valuation.

An organization is preparing to launch an enhanced service for its online customer information system.

An organization is subject to newly imposed industry health and safety regulations.

QUESTION 59
According to IIA guidance, which of the following is the primary criterion that should determine the extent of supervision required for an audit engagement?

The number of hours approved by the board for that engagement.

The proficiency of the internal auditors and the complexity of the engagement.

Whether the engagement involves possible violations of laws and governmental regulations.

QUESTION 60
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 mitigatethe risk.

QUESTION 61
Which of the following internal auditor attributes benefits the most from continuous professional development?

Integrity.

Objectivity.

Competency.

QUESTION 62
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.

QUESTION 63
Which of the following is the most important initial action for a chief audit executive to perform when establishing a new internal audit activity?

Establish an internal audit charter.

Establish a code of ethics for the internal audit activity.

Approve the internal audit budget.

QUESTION 64
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.

QUESTION 65
An internal auditor is conducting a human resources audit engagement. Which of the following observations would increase the probability of fraud?

Vague job descriptions.

Lack of background checks.

Poor interview skills.

QUESTION 66
Which of the following is a common computer-assisted audit tool used to analyze data?

Social media

Spreadsheet software

Word processing software

QUESTION 67
When determining the appropriate level of resources needed for an engagement, which of the following would be the first step?

Determine the sufficiency of internal audit staff

Identify required technology and audit tools

Determine travel and related costs for the engagement

QUESTION 68
During engagement planning, which of the following would provide an internal auditor with a sufficient understanding of the process being audited?

The mission, vision, and strategic objectives of the organization.

Management’s opinion on the thoroughness of a previous internal audit of the same process.

The objectives and risk management of the process.

QUESTION 69
Which of the following is a purpose of an embedded audit module?

It enables continuous monitoring of transaction processing.

It identifies program code that may have been inserted for unauthorized purposes.

It verifies the correctness of account balances on a master file.

QUESTION 70
Based on the three elements of the Fraud Triangle, which of the following might be considered a fraud indicator related to the opportunity element?

Reserves were established based on conservative assumptions to maximize the amounts set aside for when operating results may not meet investors’ expectations

Executive management establishes financial performance objectives for business unit managers. The objectives include significant increases in annual sales and market penetration

Poor segregation of duties allows for an executive assistant to authorize payments to one-time vendors without supervisory approvals

QUESTION 71
Which of the following scenarios would be the strongest indicator of fraud in an accounts payable process?

The accounts payable manager was unable to provide documentation relating to travel expenses on one of the samples selected.

The invoices submitted by one of the organization’s vendors are more than six months old.

The address on one of the vendor invoices matches an employee’s residential address.

QUESTION 72
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

QUESTION 73
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.

QUESTION 74
An internal auditor is performing an internal control assessment at a manufacturing company. The auditor observed that the accounts payable clerks have the ability to create new vendors without management’s review and approval. How should the auditor document this observation?

The observation doesn’t affect the adequacy of the internal controls because the existing process controls ensure that invoices are promptly and accurately paid.

The observation is an internal control weakness; therefore, additional testing should be performed to determine whether secondary mitigating controls exist or whether the control should be redesigned.

The observation is a sign of adequate internal controls; however, effectiveness testing should be performed to ensure that the controls are operating as designed and intended.

QUESTION 75
Which of the following is considered an organization-level control, as opposed to process-level or transaction- level?

Personnel policies requiring the employment of competent personnel, based on training and experience, to manage complex functions such as accounting and financial reporting.

Supervision of finance employees, including day-to-day oversight and periodic performance evaluations.

Segregated budgeting responsibilities of finance employees, including review and approval of financial reports.