Q1: Which of the following is not an element
Governance process
of assurance engagements?
a. appropriate subject matter
b. suitable criteria
c. two-party contract
d. written report
(should be a three-party contract)
Q2: Internal auditing provides absolute
assurance.
a. True
b. False
(audit only provides up to reasonable
assurance)
Q3: Which of the following is not a reason
why organizations report?
a. Gain competitive advantage
b. Improve risk management process
c. Provide shareholders less transparency
d. Respond to stakeholder pressure
(it should be providing shareholders more
transparency)
Q4: Internal auditing improves
organization’s ability to achieve goals
related to the following, except:
a. Risk management
b. Financial reporting and compliance
c. Control
d.
(financial reporting and compliance is not
included)
Q5: A duty to act solely to another party’s
interest.
a. Entity concept
b. Fiduciary
c. Stakeholder theory
d. System theory
(a fiduciary duty is a legal duty to act solely
in another party’s interests)
Entity Concept - treat the affairs of the entity
separate from the business, cover reporting
those affecting the transactions of the
organization and not personal transactions
of those stakeholders.
System Theory - open to the environment to
achieve what is considered long-term
sustainability (adapt to environmental
changes)
Stakeholder Theory - adding value, not only
to the shareholders, but also other parties.
Q6: These refer to economic stakeholders.
a. Primary
b. Secondary
c. Other
d. None
(stakeholders can be categorized as (they are driven by new rules, poor
economic/primary and performance, compliance issues, and
noneconomic/secondary) anomalous revenues or expenses)

Q7: Which threat refers to strong customer Q10: The planning phase includes the
and vendor relations? following, except:

a. Operational a. Scoping

b. Technological b. Budgeting

c. Strategic c. Announcing the audit

d. Environmental d. Testing

(referring to concerns related to strong

customer and vendor relations, customer
Q11: Which of the following is important in
loyalty, building effective business
planning especially during risk
partnerships, outsourcing arrangements,
assessments?
and mergers and acquisitions)
a. Risk factor

b. Time budget summary

Q8: In many ways, operational audits share
similarities to traditional financial reviews. c. Audit program

a. True d. Audit evidence

b. False

(operational audits share similarities to
traditional accounting/financial reviews, yet
there are some important differences worth
examining)
Q12: What type of evidence covers looking
at conditions and dynamics to the subject of
the review?
a. Testimonial

b. Observation
Q9: The objectives of review are driven by:
c. Recalculation
a. Old rules
d. Document inspection
b. Good performance

c. Governance issues
Q13: A process of observing the flow of
d. Anomalous revenues transactions from inception to finality.

a. Reperformance
b. Observation

c. Walkthrough

d. Controls testing

Q14: The relevance of the evidence

collected is affected by the source and
nature of evidence.

a. True

b. False

(it is the reliability/persuasiveness that is

affected, not relevance)

Q15: An attitude whereby the management

is treated is neither honest or dishonest.

a. Conversational

b. Participative

c. Skeptical

d. Supportive

Q16: The most popular documentation tool

used by internal auditors in review.

a. Narrative memorandum

b. Flowcharts

c. Internal control questionnaire

d. Working draft