Free CIA Auditing & Internal Controls Questions and Answers

Question 1

Which component of the COSO internal control framework relates to the ethical tone and culture established by an organization's leadership?

Accepted Answer

Control Environment

Answer

Risk Assessment

Answer

Control Activities

Answer

Monitoring

Question 2

What is the primary purpose of risk assessment in an internal control system?

Accepted Answer

To identify and analyze risks

Answer

To monitor employee performance

Answer

To implement physical safeguards

Answer

To approve financial statements

Question 3

Which type of audit evidence is considered most reliable?

Accepted Answer

External Confirmations

Answer

Oral Representations

Answer

Internally Generated Documents

Answer

Observation Only

Question 4

What does segregation of duties help prevent in an organization?

Accepted Answer

Errors and Fraud

Answer

Increased Efficiency

Answer

Better Communication

Answer

Higher Sales

Question 5

Which audit procedure evaluates the reasonableness of account balances by comparing to expectations?

Accepted Answer

Analytical Procedures

Answer

Inspection of Records

Answer

Observation of Processes

Answer

Inquiry Only

Question 6

What is the purpose of an audit trail?

Accepted Answer

To track transaction flow

Answer

To increase sales

Answer

To manage payroll

Answer

To set budgets

Question 7

During audit planning, what must the auditor assess?

Accepted Answer

Risk of Material Misstatement

Answer

Market Share of the Entity

Answer

Employee Turnover Rates

Answer

Office Supplies Inventory

Question 8

Which audit opinion indicates that the financial statements are presented fairly in all material respects?

Accepted Answer

Unqualified Opinion

Answer

Qualified Opinion

Answer

Disclaimer of Opinion

Answer

Adverse Opinion

Question 9

Which internal control activity involves management comparing actual results to budgets or forecasts?

Accepted Answer

Performance Reviews

Answer

Physical Controls

Answer

Segregation of Duties

Answer

Authorization Procedures