Only for CIA Part 1 students
Mocktest on Internal Audit Activity, it's Independence Objectivity Confidentiality, scope limitations and Resource limitations.. please solve..Answers will be provided tommorrow morning
1. What is a scope limitation in internal auditing?
A) A limitation on the resources available to the auditor
B) A restriction on the scope of the audit
C) A limitation on the auditor's ability to test certain transactions
D) A restriction on the auditor's access to certain areas or systems
Answer:
2. Which of the following is an example of a scope limitation?
A) Insufficient budget to conduct the audit
B) Limited access to certain procurement records
C) Inadequate technology to analyze complex financial transactions
D) Lack of expertise to test certain IT systems
Answer:
3. What is a resource limitation in internal auditing?
A) A restriction on the scope of the audit
B) A limitation on the resources available to the auditor
C) A limitation on the auditor's ability to test certain transactions
D) A restriction on the auditor's access to certain areas or systems
Answer:
4. Which of the following is an example of a resource limitation?
A) Limited access to certain procurement records
B) Insufficient budget to conduct the audit
C) Inadequate technology to analyze complex financial transactions
D) Lack of expertise to test certain IT systems
Answer:
5. How can internal auditors manage scope limitations?
A) By increasing the audit budget
B) By using specialized software or technology
C) By negotiating with management to expand the scope of the audit
D) By using alternative audit procedures
Answer:
6. How can internal auditors manage resource limitations?
A) By increasing the audit budget
B) By using specialized software or technology
C) By outsourcing certain audit tasks or procedures
D) By using alternative audit procedures
Answer
7. What is the primary purpose of maintaining independence in internal auditing?
A) To ensure compliance with laws and regulations
B) To provide assurance on the effectiveness of internal controls
C) To maintain objectivity and avoid conflicts of interest
D) To promote organizational efficiency and effectiveness
Answer:
8. Which of the following is a threat to objectivity in internal auditing?
A) Reporting to the audit committee
B) Having a direct reporting line to the CEO
C) Participating in management decision-making processes
D) Providing consulting services to management
Answer:
9. What is the primary purpose of maintaining confidentiality in internal auditing?
A) To protect sensitive information from unauthorized disclosure
B) To ensure compliance with laws and regulations
C) To provide assurance on the effectiveness of internal controls
D) To promote organizational efficiency and effectiveness
Answer:
10. Which of the following is a characteristic of a professional approach in internal auditing?
A) Maintaining independence and objectivity
B) Providing consulting services to management
C) Participating in management decision-making processes
D) Focusing solely on compliance with laws and regulations
Answer:
11. What is the primary benefit of adopting a professional approach in internal auditing?
A) To ensure compliance with laws and regulations
B) To provide assurance on the effectiveness of internal controls
C) To promote organizational efficiency and effectiveness
D) To enhance the credibility and reputation of the internal audit function
Answer:
12. Which of the following is a potential consequence of failing to maintain independence and objectivity in internal auditing?
A) Loss of credibility and reputation
B) Inability to provide assurance on the effectiveness of internal controls
C) Failure to identify and report material weaknesses
D) All of the above
Answer:
13. What is the primary purpose of establishing a code of ethics in internal auditing?
A) To ensure compliance with laws and regulations
B) To provide assurance on the effectiveness of internal controls
C) To promote organizational efficiency and effectiveness
D) To establish guidelines for professional behavior and conduct
Answer:
14. Which of the following is a characteristic of a code of ethics in internal auditing?
A) It is mandatory and enforceable
B) It is voluntary and non-binding
C) It applies only to internal auditors
D) It applies to all employees of the organization
Answer:
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