Question 1

The five stages of an audit include important audit activities and deliverables.
 What is Stage C?

Accepted Answer

A)   Planning
B)   Fieldwork
C)   Wrap-up
D)   Reporting C

Question 2

Which of the following is the best definition of inquiry?

Accepted Answer

A)   Asking questions of key employees
B)   Watching key employees perform the control
C)   Reviewing documentation such as policies and procedures
D)   Independently re-creating a control situation, often through data analytics A

Question 3

Maeve is a Junior accounting student, interning with RAM Manufacturing LLC, a rapidly growing manufacturer of parts for the automotive industry. Maeve has been asked to prepare a chart that illustrates the three lines of defense. Maeve has a spreadsheet listing the names and job descriptions of five key employees. Using the chart below, help Maeve place each employee in the appropriate part of the IIA's three lines of defense model.
? $\begin{array}{|l|l|l|}
\hline \text {Name }&\text { Responsibility }& \text {Line of Defense} \
\hline&\text {Provides assurance of the effectiveness of internal }\
 \text {Justin Wright} &\text {controls}\ 
\hline& \text {Performs annual reviews and writes opinions} \
\text {Cameron Yoder} &\text {regarding the financial statements of the company}\
\hline& \text {Tests the effectiveness and efficiency of operations} \
\text {Ryan McDermott }& \text {and the reliability and integrity of data}\
\hline& \text {Guides those responsible for developing and} \
\text { Lucy Volna }& \text {implementing policies and procedures}\
\hline& \text {Assists risk owners in defining the target risk} \
\text {Derrick Hile }& \text {exposure}\
\hline
\end{array}$

Accepted Answer

$\begin{array}{|l|l|l|}
\hline \text {Name }&\text { Responsibility }& \text {Line of Defense} \
\hline&\text {Provides assurance of the effectiveness of internal }\
 \text {Justin Wright} &\text {controls}&\text {Third}\ 
\hline& \text {Performs annual reviews and writes opinions} \
\text {Cameron Yoder} &\text {regarding the financial statements of the company}&\text {External Assurance}\
\hline& \text {Tests the effectiveness and efficiency of operations} \
\text {Ryan McDermott }& \text {and the reliability and integrity of data}&\text {Third}\
\hline& \text {Guides those responsible for developing and} \
\text { Lucy Volna }& \text {implementing policies and procedures}&\text {First}\
\hline& \text {Assists risk owners in defining the target risk} \
\text {Derrick Hile }& \text {exposure}&\text {Second}\
\hline
\end{array}$

Question 4

Which part of the external audit report typically presents the auditors' conclusions?

Accepted Answer

A)   Report on the Financial Statements
B)   Management's Responsibility for the Financial Statements
C)   Auditor's Responsibility
D)   Opinion

Question 5

What is the first step an internal audit department takes?

Accepted Answer

A)   Create an audit plan
B)   Create an agile audit
C)   Create a rolling audit plan
D)   Change management

Question 6

The Institute of Internal Auditors (IIA) updated their three lines of defense model in 2020 to reflect the need for aligned assurance from various areas of a company.
 What does B represent in the IIA's Three Lines Model?

Accepted Answer

A)   Governing Body
B)   Management
C)   Internal Audit
D)   External Assurance Providers

Question 7

The five stages of an audit include important audit activities and deliverables. Which of the following is the audit stage where the scoping document is delivered?

Accepted Answer

A)   Planning
B)   Fieldwork
C)   Wrap-up
D)   Reporting

Question 8

The Institute of Internal Auditors (IIA) updated their three lines of defense model in 2020 to reflect the need for aligned assurance from various areas of a company. Which of the following is the best definition of external auditors?

Accepted Answer

A)   External auditors focus on ensuring that the second and third lines of defense are working cohesively to provide appropriate coverage over a company's risks.
B)   External auditors provide the systematic and independent review of data, information, records, and operations of a business to provide assurance of the effectiveness of internal controls and efficiency of processes.
C)   External auditors evaluate whether the financial statements of the audited company are free from material misstatements and are presented in accordance with accounting standards.
D)   External auditors employ rigorous independence checks to ensure that their opinions will be unbiased and that they do not have inappropriate ties to the client.

Question 9

Internal audit's primary purpose is to provide independent assurance that a company's ________, internal controls, and governance processes are effective.

Accepted Answer

A)   Risk management
B)   Audit canvas
C)   Workpapers
D)   Management action plan

Question 10

Historically, auditors were divided into groups based on their expertise: operational or business auditors, financial auditors, and information technology (IT) auditors. Which of the following would be performed by an IT auditor?

Accepted Answer

A)   Financial reporting
B)   Claims processing
C)   Human resources
D)   Security administration

Question 11

What is the audit stage called that is focused on assessing the adequacy of internal controls, compliance, and business processes, including the performance of testing transactions, data, and other procedures necessary to accomplish the audit objectives?

Accepted Answer

A)   Audit fieldwork
B)   Information gathering
C)   Process walkthrough
D)   Design effectiveness

Question 12

The five stages of an audit include important audit activities and deliverables.
 What is Stage B?

Accepted Answer

A)   Planning
B)   Fieldwork
C)   Wrap-up
D)   Reporting

Question 13

The five stages of an audit include important audit activities and deliverables. Which of the following is the audit stage where the workpapers are delivered?

Accepted Answer

A)   Planning
B)   Fieldwork
C)   Wrap-up
D)   Reporting

Question 14

Many companies perform the audit planning process annually and create a 12-month audit plan. Another method is an increasingly popular methodology that involves working in shorter sprints and making changes as needed. What is this auditing approach called?

Accepted Answer

A)   Sprint auditing
B)   Agile auditing
C)   External auditing
D)   Waterfall auditing

Question 15

If you are asking questions of key employees, which operating effectiveness test are you performing?

Accepted Answer

A)   Inquiry
B)   Observation
C)   Inspection
D)   Reperformance

Question 16

Once feedback is gathered from essential stakeholders and updates are made based on those review comments, the ________ is created.

Accepted Answer

A)   exit meeting
B)   management's response
C)   audit recommendations
D)   final audit report

Question 17

Historically, auditors were divided into groups based on their expertise: operational or business auditors, financial auditors, and information technology (IT) auditors. Which of the following would be performed by a financial auditor?

Accepted Answer

A)   Claims processing
B)   Corporate tax
C)   Human resources
D)   Security administration

Question 18

The five stages of an audit include important audit activities and deliverables. Which of the following is the audit stage where the draft audit report is delivered?

Accepted Answer

A)   Planning
B)   Fieldwork
C)   Wrap-up
D)   Reporting

Question 19

Internal audit's primary purpose is to provide independent assurance that a company's risk management, ________, and governance processes are effective.

Accepted Answer

A)   Audit canvas
B)   Internal controls
C)   Workpapers
D)   Management action plan

Question 20

Which of the following is the best definition of inspection?

Accepted Answer

A)   Asking questions of key employees
B)   Watching key employees perform the control
C)   Reviewing documentation such as policies and procedures
D)   Independently re-creating a control situation, often through data analytics

Exam 19: Audit Assurance

The five stages of an audit include important audit activities and deliverables. What is Stage C?

Which of the following is the best definition of inquiry?

Which part of the external audit report typically presents the auditors' conclusions?

What is the first step an internal audit department takes?

The Institute of Internal Auditors (IIA) updated their three lines of defense model in 2020 to reflect the need for aligned assurance from various areas of a company. What does B represent in the IIA's Three Lines Model?

The five stages of an audit include important audit activities and deliverables. Which of the following is the audit stage where the scoping document is delivered?

The Institute of Internal Auditors (IIA) updated their three lines of defense model in 2020 to reflect the need for aligned assurance from various areas of a company. Which of the following is the best definition of external auditors?

Internal audit's primary purpose is to provide independent assurance that a company's ________, internal controls, and governance processes are effective.

Historically, auditors were divided into groups based on their expertise: operational or business auditors, financial auditors, and information technology (IT) auditors. Which of the following would be performed by an IT auditor?

What is the audit stage called that is focused on assessing the adequacy of internal controls, compliance, and business processes, including the performance of testing transactions, data, and other procedures necessary to accomplish the audit objectives?

The five stages of an audit include important audit activities and deliverables. What is Stage B?

The five stages of an audit include important audit activities and deliverables. Which of the following is the audit stage where the workpapers are delivered?

Many companies perform the audit planning process annually and create a 12-month audit plan. Another method is an increasingly popular methodology that involves working in shorter sprints and making changes as needed. What is this auditing approach called?

If you are asking questions of key employees, which operating effectiveness test are you performing?

Once feedback is gathered from essential stakeholders and updates are made based on those review comments, the ________ is created.

Historically, auditors were divided into groups based on their expertise: operational or business auditors, financial auditors, and information technology (IT) auditors. Which of the following would be performed by a financial auditor?

The five stages of an audit include important audit activities and deliverables. Which of the following is the audit stage where the draft audit report is delivered?

Internal audit's primary purpose is to provide independent assurance that a company's risk management, ________, and governance processes are effective.

Which of the following is the best definition of inspection?