IIA-CHAL-QISA Exam Practice Test Instant Access

Question 1

During which phase of the contracting process are contracts drafted for a proposed business activity'

AInitiation phase.

BBidding phase.

CDevelopment phase.

DManagement phase

Answer : C

Contracts are typically drafted during the development phase of the contracting process. This phase follows the initiation and bidding phases and involves detailed negotiations and the preparation of formal agreements that outline the terms and conditions of the proposed business activity. This ensures that both parties have a clear understanding of their obligations and expectations before the contract is finalized and executed

Question 2

Which of the following should be included in a company's year-end inventory valuation?

ACompany goods that were sold during the year, free on board shipping point, that have been shipped but not yet received by the customer

BGoods purchased by the company, free on board destination, that have not yet been received.

CGoods on consignment, which the company is trying to sell for its customers.

DCompany goods for sale on consignment at a consignment shop

Answer : D

Year-end inventory valuation should include all goods owned by the company, regardless of their location. This includes goods for sale on consignment at a consignment shop, as these items remain the property of the company until sold. Goods sold FOB shipping point and goods purchased FOB destination that have not yet been received are not included, as ownership has transferred or not yet been acquired respectively. Goods on consignment that the company is trying to sell for others are also excluded because the company does not own them

Question 3

Which of the following is the next step in understanding a business process once an internal auditor has identified the process?

ADetermine process outputs

BDetermine process inputs.

CDetermine process activities.

DDetermine process goals

Answer : C

Once an internal auditor has identified a business process, the next step is to understand the specific activities involved in that process. This includes mapping out each step or action taken within the process to gain a detailed understanding of how it operates. Identifying process activities helps in evaluating the efficiency, effectiveness, and potential risks associated with the process

Question 4

Which of the following offers the best explanation of why the auditor in charge would assign a junior auditor to complete a complex part of the audit engagement?

AThe senior auditors are unavailable, as they are currently working on other portions of the engagement

BThe auditor in charge believes that the junior auditor should obtain a specific type of experience.

CThe audit engagement has a tight deadline and the work must be completed timely.

DThe auditor in charge is unable to identify audit staff with all of the required skills needed to complete the engagement

Answer : B

Assigning a junior auditor to complete a complex part of an audit engagement can be a strategic decision aimed at providing the junior auditor with valuable experience. This exposure to complex tasks helps in their professional development, building their skills and knowledge for future responsibilities. Although tight deadlines or the unavailability of senior auditors might be factors, the primary reason is often to enhance the junior auditor's competence and career growth.

Question 5

Operational management In the IT department has developed key performance indicator reports, which are reviewed in detail during monthly staff meetings. This activity is designed to prevent which of the following conditions?

AKnowledge/skills gap.

BMonitoring gap.

CAccountability reward failure

DCommunication failure

Answer : B

Key performance indicator (KPI) reports are essential tools for tracking and evaluating the performance of various processes and activities within an organization. By reviewing these reports in detail during monthly staff meetings, operational management in the IT department aims to identify any discrepancies or issues promptly. This continuous monitoring helps to prevent a 'monitoring gap,' which is the failure to adequately oversee and assess operations, potentially leading to undetected problems or inefficiencies

Question 6

The internal audit activity is currently working on several engagements, including a consulting engagement on the management process in the human resources department. Which of the following actions should the chief audit executive take to most efficiently and effectively ensure the quality of the engagement?

AAssign an experienced manager to monitor the whole engagement process.

BEmploy fieldwork peer review to enhance the work quality.

CRequire internal auditors to follow a standardized work program.

DPersonally supervise the engagement

Answer : B

Ensuring Quality: To ensure the quality of the consulting engagement in the human resources department, the chief audit executive (CAE) can implement a fieldwork peer review process. This involves having experienced auditors review the work of their colleagues to ensure adherence to audit standards and procedures.

Efficiency and Effectiveness:

Peer Review: This method helps identify any issues or improvements needed in real-time, enhancing both the efficiency and effectiveness of the audit process.

Standardized Work Programs: While standardized work programs (option C) provide consistency, peer review adds a layer of quality assurance.

Supervision: Personal supervision by the CAE (option D) is not practical for ensuring the quality of all engagements.

Question 7

An engagement supervisor obtains facilities maintenance reports from a contractor during an audit of third-party services. Which of the following is the source of authority for the engagement supervisor to make such contact outside the organization?

AThe policies and procedures of the internal audit activity.

BThe provisions of the internal audit charter.

CThe authority of the CEO.

DThe IIA's Code of Ethics.

Answer : B

Authority Source: The internal audit charter is a formal document that defines the internal audit activity's purpose, authority, and responsibility. It grants internal auditors the right to access all records, personnel, and physical properties relevant to the performance of engagements.

Facilities Maintenance Reports: When an engagement supervisor contacts a third-party contractor for maintenance reports, the authority is derived from the internal audit charter, which ensures auditors have the necessary access to perform their duties.

Importance of the Charter: This ensures the independence and objectivity of the internal audit activity, providing a clear mandate for auditors to obtain information from external parties as needed.

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