EMT Practice Test

1. Question Content...

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Question1: According to the IIA Code of Ethics, which of the following best describes the conduct of an internal auditor who demonstrates the principle of competency?

Question2: What would be the proper sequence of steps for an internal auditor to take in order to draw a conclusion on internal control effectiveness and adequacy after ascertaining the key controls?

Question3: Which of the following would a chief audit executive most likely use to identify a need for improvement in a staff internal auditor's business acumen?

Question4: Senior management and the board have expressed concerns about the length of engagements and whether their outcome aligns with the organization's strategies and objectives. Which of the following actions, if taken by the chief audit executive, could address these concerns?

Question5: According to IIA guidance, which of the following statements is true with regard to the chief audit executive's (CAE's) responsibility for conducting a self-assessment of the internal audit activity?
1 The CAE should select an independent reviewer or review team to perform sufficient tests of the self-assessment to validate the results
2 The CAE should validate results by engaging experienced audit professionals from a separate internal audit activity outside of the organization to reperform all of the tests conducted for the assessment
3. The CAE should select independent, nonaudit professionals who are knowledgeable about the organization and the industry in which it operates to assist with performing the self-assessment
4. The CAE may consider performing a self-assessment with independent external validation in Iieu of performing a full external assessment

Question6: An organization is considering purchasing a new banking software system and has asked the internal audit activity to evaluate the system. An internal auditor assigned to perform the engagement worked at the software company two years ago and is familiar with the system's design strengths and weaknesses. Which of the following is true regarding impairment to the auditor's objectivity?

Question7: A new internal audit activity is considering the adoption of a risk and control framework. Which of the following is the most appropriate consideration during this process?

Question8: Which of the following describes a primary responsibility for the internal audit activity in helping management maintain effective controls?

Question9: To comply with the proficiency standard which of the following would the chief audit executive likely consider as the primary hiring criterion when choosing a new internal auditor?

Question10: The chief audit executive (CAE) decided to conduct a self-assessment with independent validation. Which of the following is the most likely reason the CAE selected this course of action?

Question11: During an assurance engagement, an internal auditor reviews a tender inviting vendors to submit bids to supply financial services software to the organization. She suspects that the tender was tailored for the bidder who eventually won the contract. What should the auditor do next?

Question12: Which of the following is the most appropriate way to ensure that a newly formed internal audit activity remains free from undue influence by management?

Question13: An iniernal auditor creates a professional development plan to obtain more experience in the organization's environmental, social, and corporate governance initiatives. Which of the following would the auditor include in the plan to support these objectives?

Question14: Which of the following internal control components has COSO identified as the most important?

Question15: Which of the following should play a leading role in overseeing ihe ethical atmosphere of an organization?

Question16: An internal auditor found that his organization did not make a disclosure that is required by law. However, the auditor decided not to raise an audit finding. Which of the following Code of Ethics principles was violated?

Question17: Which of the following statements is true regarding how the scope of a consulting engagement should be established?

Question18: Which of the following offers the feast evidence that the internal audit activity has achieved organizational independence?

Question19: Once an organization's risks are identified, what would be the next step to ensure resources are properly allocated to manage those risks?

Question20: According to HA guidance, which of the following would best support the internal auditor's conclusion that the organization's risk management processes are effective?

Question21: Which of the following Code of Ethics principles specifically requires internal auditors to disclose all material facts known to them that, if not disclosed, may distort the reporting of activities under review?

Question22: Who has the ultimate responsibility of implementing the organization's governance system?

Question23: There is a growing perception that employees generally evade their responsibilities. What impact will an internal auditor most likely see during an engagement?

Question24: Which type(s) of assessments in an internal audit activity's quality assurance and improvement program requires ongoing monitoring to evaluate internal audit activity's efficiency and effectiveness?

Question25: With regard to governance, which of the following is a board-level responsibility rather than a management responsibility?

Question26: Which of the following statements demonstrates that internal auditors are in conformance with the standard of due professional care?

Question27: According to The IIA's Code of Ethics, which of the following best describes the principle of integrity?

Question28: Which of the following best demonstrates internal auditors performing their work with proficiency?

Question29: With regard to the internal audit activity's quality assurance and improvement program, which of the following must be reported to the board?

Question30: Which of the following is a detective control?

Question31: While preparing the audit plan for an automobile manufacturing company, the chief audit executive (CAE) noted that the company's engineering department received a high risk ranking. However, the internal audit activity is understaffed, and current staff do not possess the necessary skills to adequately assess the effectiveness of the engineering department. What is the most appropriate course of action for the CAE to take?

Question32: According to IIA guidance, a new internal auditor is expected to possess which of the following competencies?

Question33: The chief audit executive (CAE) is drafting the annual internal audit plan and seeks input from senior management and the external auditor prior to submitting it for approval to the board. According to MA guidance, which of the following statements is true regarding this scenario?

Question34: Which of the following is a primary benefit of implementing a governance risk management and compliance framework within an organization?

Question35: Which of the following techniques should an internal auditor use in order to conduct an effective interview?

Question36: What is the best course of action when the internal audit activity does not have the knowledge necessary to perform a planned audit of the organization's new IT data backup process?

Question37: Which of the following is the most effective way any organization can ensure proper governance over its internal controls?

Question38: An internal auditor failed to identify transactions between the parent organization and a subsidiary. What is the most likely reason for the failure?

Question39: An internal auditor discovered that a former colleague from the internal audit activity now works in a junior position in a department scheduled for an upcoming audit. How can the auditor best ensure his objectivity for this engagement?

Question40: A new chief audit executive realized that the internal audit charter has not been updated in five years and only includes the Core Principles for the Professional Practice of Internal Auditing, the Code of Ethics, and the Standards. What mandatory component is missing?

Question41: Prior to commencing a financial compliance engagement, the engagement supervisor reads the business plan for the finance department and meets informally with the director to learn more about any key issues. Which of the following competencies is the engagement supervisor demonstrating?

Question42: Which of the following is an indicator that the internal audit activity does not fully conform with the Standards?

Question43: Which of the following survey questions would be most effective to identify ethics violations within the organization?

Question44: The chief audit executive (CAE) has hired a new internal auditor who was immediately assigned to a procurement function audit. Because the new auditor's name is similar to that of the procurement manager, some staff members think the two are related, although they are not. Which of the following actions is most appropriate for the CAE to take?

Question45: The internal audit activity conducted an organization wide risk assessment. One of the most significant risks identified is associated with the oil price market. The chief audit executive (CAE) is considering including in the annual aud it plan an assessment of the effectiveness of oil price risk management. The manager responsible commented that the assessment was not needed, as market risks were regularly addressed by the financial risk committee. If the CAE decides to include this activity in the annual audit plan anyway, how should it be recorded?

Question46: An internal auditor is reviewing the results of an employee survey at a mining company. Which of the following would alert the auditor to a potential ethics issue?

Question47: With regard to the internal audit activity's quality assurance and improvement program, which of the following topics would the chief audit executive include on the quarterly board meeting agenda?

Question48: According to IIA guidance, which of the following is ultimately responsible for seeing that the internal control system of an organization's social responsibility program is effective?

Question49: Which of the following would best describe a control implemented to detect cash register disbursement fraud in a large retail store?

Question50: Due to unfavorable economic conditions management decided to postpone new investments for the next year. Which of the following best describes the risk management strategy used to address this situation?

Question51: According to the Standards, in today's technology and business environments, how much computer and information systems-related knowledge and skills must an internal auditor have to be effective in fulfilling his job responsibilities?

Question52: Which of the following actions best demonstrates an internal auditor exercising due professional care?

Question53: An organization established 20 years ago has had its internal audit activity in place for the last three years. Which of the following would allow the internal audit activity to accurately state that it is in conformance with the Standards'?

Question54: Nearing the completion of fieldwork, an internal auditor shared the draft report findings with management prior to the closing meeting. During the closing meeting, management expressed dissatisfaction in that they were not familiar with some of the findings. Management also noted that some aspects of the report seemed confusing. Which of the following competencies appears to have been lacking in this scenario?

Question55: With regard to the internal audit activity's quality assurance and improvement program, which of the following topics would the chief audit executive include on the quarterly board meeting agenda?

Question56: According to HA guidance, if an internal auditor suspects fraud during an assurance engagement, what should the auditor do first?

Question57: An internal auditor at a multinational organization is reviewing the effectiveness of the organization's risk management framework. In this scenario, which of the following statements is true?

Question58: Which of the following statements is true regarding reporting results of the quality assurance and improvement program to senior management and the board?

Question59: Wi ch of the following circumstances would most likely be considered a potential red flag for fraud by the internal audit activity?

Question60: An internal auditor is finalizing an audit report on the effectiveness of the organization's overall system of internal control. Several audit tests were performed, and the only issue identified was that the CEO frequently asks employees to make exceptions or bypass the organization's standard written policies and procedures. Which of the following conclusions is most appropriate for the auditor to report?

Question61: Which of the following statements is true regarding how the scope of a consulting engagement should be established?

Question62: Which of the following can be used to minimize employees' resentment of controls?

Question63: Which of the following best demonstrates organizational independence of the internal audit activity?

Question64: Which of the following is an example of an impairment to an internal auditor's independence?

Question65: An internal auditor assessed the controls within his organization's payroll process and suspects that erroneous payments may have been made to a fraudulent bank account. What is the best course of action for the auditor to take?

Question66: Which of the following should be considered in developing a risk and control model for use in an engagement?

Question67: IT management requires all employees in the IT department to attend annual training on the department's mission values and key performance measures This activity is designed to prevent which of the following conditions?

Question68: According to IIA guidance, which of the following statements is true regarding consulting engagements performed by the internal audit activity?

Question69: In a retail organization, sales teams compete with each other to achieve and exceed sales targets. Each quarter, the members of the top sales team receive a bonus. In this environment, management should closely monitor for the emergence of which of the following potential risks?

Question70: According to IIA guidance, which of the following actions by the chief audit executive (CAE) best demonstrates the organizational independence of the internal audit activity?

Question71: A multinational organization has asked the internal audit activity to assist in setting up the organization's risk management system. The chief audit executive (CAE) agrees to take on the engagement as a consultant. Which of the following tasks is appropriate for the CAE to undertake?

Question72: A financial services organization's board is assessing increased regulations and its effect on current industry lending practices. Which of the following committees would help the board identify and assess the effects of the increased regulations?

Question73: Which of the following best describes the role of internal control frameworks?

Question74: Which of the following are some of the requirements of the quality assurance and improvement program (QAIP)?

Question75: A risk assessment showed that the cost of addressing a particular risk in the organization's human resources department is greater than the perceived benefit. Which risk response approach should the organization take in this scenario?

Question76: Which of the following actions should the organization's governing body perform to provide the most effective governance over the organization's culture?

Question77: Which of the following requests, if accepted by the internal audit activity, would impair its independence?

Question78: Which of the following would most likely be classified as a consulting engagement?

Question79: According to IIA guidance which of the following statements regarding ethics is true?

Question80: Which of the following practices, applied by the chief audit executive {CAE), most likely indicates an effective continuing professional educational program for the internal audit activity?

Question81: Which of the following fundamental principles of The IIA's Code of Ethics is best described as performing work honestly diligently and responsibly?

Question82: A chief audit executive (CAE) is concerned that the internal audit activity is not receiving adequate training and continuing education. Which of the following approaches should the CAE take?

Question83: Which statement is accurate regarding reporting on the quality assurance and improvement program (OAIP) to conform with the International Standards for the Professional Practice of Internal Auditing?

Question84: Which of the following actions would be most effective to help an internal auditor determine how successful the organization has been in communicating the existence of its ethics hotline?

Question85: Which of the following statements is the most appropriate for a chief audit executive to include in the internal audit policy manual in order to promote objectivity?

Question86: During an audit of company expenses, the internal auditor performed a test using data analytics and identified a violation of the company's expenses policy. The auditor who discovered the issue considered it a potential fraudulent transaction and informed the chief financial officer (CFO). The CFO dismissed the concern because he did not understand the data analytics test that was performed and the transaction was of a low value. Given this situation, which skills or competencies should this internal auditor seek to improve?

Question87: Which of the following would be most helpful to measure whether an internal audit activity successfully provides risk-based assurance?

Question88: Which should the internal auditor first consider when assessing fraud risks during an engagement?

Question89: The internal auditor of a small manufacturer noted that the accounting department has insufficient staff to achieve proper segregation of duties. What type of controls would the auditor likely recommend to management to specifically address this problem?

Question90: Which of the following relates to the concept of due professional care?

Question91: Which of the following accurately describes the concept of inherent risk?

Question92: In a small company with a small budget, the board and senior management asked the chief audit executive (CAE) to develop specific controls prompted by a new regulatory requirement affecting a specific process. The CAE was also directed to report functionally to senior management. An audit engagement on this process was already set in the internal audit plan. Which of the following represents an impairment to the internal audit activity's independence?