Deck 19: Audit Assurance

Question 1

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?

A) Cybersecurity
B) Financial reporting
C) Claims processing
D) Human resources

Answer 1

Cybersecurity

Question 2

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?

A) Financial reporting
B) Backups and storage
C) Claims processing
D) Human resources

Answer 2

Backups and storage

Question 3

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?

A) Financial reporting
B) Claims processing
C) Network infrastructure
D) Human resources

Answer 3

Network infrastructure

Question 4

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?

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

Question 5

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?

A) Financial reporting
B) Claims processing
C) Network infrastructure
D) Human resources

Question 6

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?

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

Question 7

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?

A) Claims processing
B) Network infrastructure
C) Accounts payable
D) Human resources

Question 8

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?

A) Claims processing
B) Human resources
C) Security administration
D) Payroll

Question 9

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 operational or business auditor?

A) Claims processing
B) Network infrastructure
C) Accounts payable
D) Change management

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 operational or business auditor?

A) Security administration
B) Corporate investments
C) Payroll
D) Disaster recovery

Question 11

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 operational or business auditor?

A) Network infrastructure
B) Accounts payable
C) Sales and distribution
D) Change management

Question 12

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 operational or business auditor?

A) Security administration
B) Payroll
C) Disaster recovery
D) Human resources

Question 13

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 aligned assurance?

A) Aligned assurance focuses on ensuring that the second and third lines of defense are working cohesively to provide appropriate coverage over a company's risks.
B) Aligned assurance is 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) Aligned assurance evaluates whether the financial statements of the audited company are free from material misstatements and are presented in accordance with generally accepted accounting standards.
D) Aligned assurance employs rigorous independence checks to ensure that their opinions will be unbiased and that they do not have inappropriate ties to the client.

Question 14

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 internal auditing?

A) Auditing focuses on ensuring that the second and third lines of defense are working cohesively to provide appropriate coverage over a company's risks.
B) Auditing is 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) Auditing evaluates whether the financial statements of the audited company are free from material misstatements and are presented in accordance with accounting standards.
D) Auditing employs rigorous independence checks to ensure that their opinions will be unbiased and that they do not have inappropriate ties to the client.

Question 15

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?

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 16

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 internal auditors?

A) Internal 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) Internal 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) Internal auditors evaluate whether the financial statements of the audited company are free from material misstatements and are presented in accordance with generally accepted accounting standards.
D) Internal 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 17

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 A represent in the IIA's Three Lines Model?

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

Question 18

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?

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

Question 19

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 C represent in the IIA's Three Lines Model?

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

Question 20

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 D represent in the IIA's Three Lines Model?

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

Question 21

Who prepares the results of the audit engagement as presented in the independent audit report regarding the financial statements?

A) External auditors
B) Internal auditors
C) Management
D) Audit committee

Question 22

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

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

Question 23

An employee of which of the following companies would likely serve as an external auditor?

A) PwC
B) Coca-Cola
C) Disney
D) Netflix

Question 24

An employee of which of the following companies would likely serve as an internal auditor?

A) PwC
B) Coca-Cola
C) Deloitte
D) EY

Question 25

What is the first step an internal audit department takes?

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

Question 26

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?

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

Question 27

Many companies perform the audit planning process annually and create a ________-month audit plan.

A) 3
B) 6
C) 12
D) 24

Question 28

The audit risk assessment determines which audits the department recommends for the next period. The internal audit department presents its recommendations to the ________ for approval.

A) Nominating committee
B) Finance committee
C) Executive committee
D) Audit committee

Question 29

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

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

Question 30

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

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

Question 31

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

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

Question 32

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

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

Question 33

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

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

Question 34

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?

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

Question 35

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

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

Question 36

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

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

Question 37

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

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

Question 38

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

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

Question 39

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?

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

Question 40

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?

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

Question 41

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

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

Question 42

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

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

Question 43

The five stages of an audit include important audit activities and deliverables. Which of the following is the audit stage where the updated management action plan is delivered?

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

Question 44

Which of the following is the best definition of a scoping document?

A) A scoping document describes the areas of the process that are subject to audit.
B) A scoping document includes key audit planning information.
C) A scoping document is an Agile version of a planning memo.
D) A scoping document is an interview where auditees explain their daily functions to the auditor.

Question 45

Which of the following is the best definition of an audit planning memo?

A) An audit planning memo describes the areas of the process that are subject to audit.
B) An audit planning memo includes key audit planning information.
C) An audit planning memo is an Agile version of a planning memo.
D) An audit planning memo is an interview where auditees explain their daily functions to the auditor.

Question 46

Which of the following is the best definition of an audit canvas?

A) An audit canvas describes the areas of the process that are subject to audit.
B) An audit canvas includes key audit planning information.
C) An audit canvas is an Agile version of a planning memo.
D) An audit canvas is an interview where auditees explain their daily functions to the auditor.

Question 47

Just as a business does not have the resources to mitigate all its risks, internal audit does not have the resources to test every risk and the controls implemented to address each risk. What helps a company prioritize the risks it faces?

A) Risk scores
B) Audit scores
C) Planning scores
D) Scoping scores

Question 48

The plans of the audit team, including the audit planning memo, are presented during what event?

A) The audit wrap-up meeting
B) The audit kickoff meeting
C) The audit fieldwork
D) The audit follow-up meeting

Question 49

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

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

Question 50

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

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

Question 51

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

A) Audit canvas
B) Workpapers
C) Governance processes
D) Management action plan

Question 52

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?

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

Question 53

What is the first step in fieldwork called?

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

Question 54

What is an interview where auditees explain their daily job functions to the auditor called?

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

Question 55

What determines whether a control, if operated as prescribed, meets the company's control objectives and affectively prevents or detects errors or fraud?

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

Question 56

What determines whether a control is operated as designed by a person with appropriate authority and training to perform the control?

A) Operating effectiveness
B) Information gathering
C) Process walkthrough
D) Design effectiveness

Question 57

Which of the following is the best definition of inquiry?

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

Question 58

Which of the following is the best definition of observation?

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

Question 59

Which of the following is the best definition of inspection?

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

Question 60

Which of the following is the best definition of reperformance?

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

Question 61

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

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

Question 62

If you are watching key employees perform the control, which operating effectiveness test are you performing?

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

Question 63

If you are reviewing documentation, such as policies and procedures, which operating effectiveness test are you performing?

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

Question 64

If you are independently re-creating a control situation, which operating effectiveness test are you performing?

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

Question 65

Unlike design effectiveness, operating effectiveness is tested through what?

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

Question 66

What are used to determine if material misstatements exist in the underlying data that is used to create the financial statements?

A) Substantive procedures
B) Document request
C) Design effectiveness
D) Operating effectiveness

Question 67

What is a formal list of all documentation needed for an audit?

A) Substantive procedures
B) Document request
C) Design effectiveness
D) Operating effectiveness

Question 68

What Excel function would you use if you want to split a column into multiple columns using a specified delimiter to divide the column?

A) Text to Columns
B) LEFT
C) CONCAT
D) SUM

Question 69

What Excel function would you use if you want to return a specified number of characters beginning at the left of the column?

A) Text to Columns
B) LEFT
C) CONCAT
D) SUM

Question 70

What Excel function would you use if you want to combine two or more columns into one new column?

A) Text to Columns
B) LEFT
C) CONCAT
D) SUM

Question 71

________ is the core of an audit engagement.

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

Question 72

The ________ gathered about the business and internal controls during the audit engagement must be communicated so that management can implement suggestions and address shortcomings.

A) fieldwork
B) valuable information
C) reporting
D) planning

Question 73

The valuable information gathered about the business and internal controls during the audit engagement must be communicated so that management can

A) ignore and decide to change auditors.
B) instruct the auditors to implement the changes.
C) implement suggestions and address shortcomings.
D) plan for the next audit engagement.

Question 74

What is the first stage after fieldwork, where auditors complete their workpapers and draft an audit report to share with key stakeholders?

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

Question 75

During the wrap-up stage of an audit, what are the notes called that are compiled into formal documentation capturing the results of the control testing performed?

A) Audit findings
B) Wrap-up
C) Audit workpapers
D) Draft audit report

Question 76

What are the results of an audit, such as written explanations of errors, improper activities, control weaknesses or deficiencies, and discovered fraud?

A) Document request
B) Wrap-up
C) Audit workpapers
D) Audit findings

Question 77

Once the first draft of the audit report is complete, the audit team meets with the auditee in a(n) ________ to discuss the findings.

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

Question 78

Management of the business area provides the audit team with ________, in the form of a plan for remediation.

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

Question 79

Once the first draft of the audit report is complete, the audit team meets with the auditee in an exit meeting to discuss the findings. Management of the business area provides the audit team with management's response, in the form of a plan for remediation. But auditors don't come to these meetings empty handed. Instead, they provide ________ that include the cause of the issue, details about the root cause(s), and suggested actions management can take to address the findings.

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

Question 80

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

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