Certified Internal Auditor Certified Internal Auditor MCQ 3

Question 1

An internal auditor is assessing a company's enterprise risk management (ERM) program. According to COSO ERM, which component focuses on an organization's risk appetite and strategy?

Accepted Answer

Strategy and Objective-Setting

Answer

The Strategy and Objective-Setting component of COSO ERM is where risk appetite is established and aligned with strategy.

Question 2

Which of the following is NOT a characteristic of a well-written audit observation (finding)?

Accepted Answer

Cost — the budget allocated for remediation

Answer

The standard elements of an audit finding are criteria, condition, cause, and effect/risk — not the remediation budget.

Question 3

An auditor uses regression analysis during an engagement. This is an example of which type of audit procedure?

Accepted Answer

Analytical procedure

Answer

Regression analysis is an analytical procedure used to identify relationships and unusual variations in data.

Question 4

Under the IIA Code of Ethics, which principle requires internal auditors to perform their work with honesty, diligence, and responsibility?

Accepted Answer

Integrity

Answer

The Integrity principle requires auditors to perform their work honestly, diligently, and responsibly.

Question 5

During a payroll audit, an auditor wants to verify that all employees on the payroll actually exist. Which audit procedure is most appropriate?

Accepted Answer

Physically observing a payroll distribution or confirming employee identities with HR records

Answer

Physical observation or HR confirmation directly tests whether payroll employees are real, addressing ghost-employee fraud risk.

Certified Internal Auditor Practice Test

Certified Internal Auditor Practice Test

Certified Internal Auditor Certified Internal Auditor MCQ 3