Most Recent IIA-IAP Exam Dumps

Prepare for the IIA Internal Audit Practitioner exam with our extensive collection of questions and answers. These practice Q&A are updated according to the latest syllabus, providing you with the tools needed to review and test your knowledge.

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The questions for IIA-IAP were last updated on Mar 30, 2025.

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Question No. 1

During a travel expense audit engagement, the internal auditor discovered that the accounts payable staff spend a significant amount of time previewing expense reports before the reports are sent to managers for review and approval. The total of all expense reports during a year represents less than 1% of the organization's total budget. Which of the following best supports the auditor's recommendation to reduce the level of reviews?

AThe inherent risk of travel expense fraud is low.

BThe cost of the control outweighs the benefit.

CThe duplication of effort in the review process is unnecessary.

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Correct Answer: B

Comprehensive and Detailed Step-by-Step Explanation:

Cost-Benefit Analysis: Controls should be cost-effective. Spending significant resources on a process that accounts for less than 1% of the budget indicates that the cost of the control (extensive reviews) outweighs the potential benefits.

Other Options:

Option A: While inherent risk is a factor, the primary justification here is the cost-benefit imbalance.

Option C: Duplication of effort is inefficient, but it does not directly address cost considerations.

Thus, the correct answer is B. The cost of the control outweighs the benefit.

Question No. 2

Which of the following would be a common benefit of using generalized audit software?

AIt enables internal auditors to perform tests on data with the assistance of the organization's IT personnel.

BIt enables internal auditors to analyze very large quantities of data.

CIt eliminates the need to obtain access privileges to relevant and reliable data.

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Correct Answer: B

Comprehensive and Detailed Step-by-Step Explanation:

Analyzing Large Data Sets: Generalized audit software (GAS) like ACL or IDEA allows auditors to process and analyze large volumes of data efficiently, identifying patterns, anomalies, and exceptions.

Other Options:

Option A: GAS is designed to minimize reliance on IT personnel by enabling auditors to directly access and analyze data.

Option C: Access privileges must still be obtained to ensure data reliability and integrity.

Thus, the correct answer is B.

Question No. 3

Which of the following would have the most direct impact on management's decision regarding the amount of risk that is considered acceptable?

ARisk capacity.

BRisk appetite.

CRisk perception.

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Correct Answer: B

Comprehensive and Detailed Step-by-Step Explanation:

Reference to IIA Standards:

Standard 2120 - Risk Management: Internal audit should evaluate the organization's risk appetite and alignment with decision-making processes.

Definitions:

Risk Appetite (Option B): The level of risk an organization is willing to accept in pursuit of its objectives, making it the most direct determinant of acceptable risk levels.

Risk Capacity (Option A): The organization's ability to absorb risk, which is more strategic and long-term.

Risk Perception (Option C): Subjective views of risk, which can influence decisions but do not directly determine acceptable risk.

Question No. 4

Which of the following is an advantage of communicating audit observations as they are identified?

AThe auditor may receive additional pertinent documentation or other relevant information

BThe auditor may not need to communicate the final results of the audit to the board

CThe auditor may be able to plan more efficiently next year's audit

Show Answer

Correct Answer: A

Comprehensive and Detailed Step-by-Step Explanation:

Real-Time Communication: Sharing audit observations promptly allows management to provide additional documentation or clarifications that could affect findings or conclusions.

Other Options:

Option B: Final results are still communicated to the board to fulfill reporting requirements.

Option C: While observations may indirectly inform future planning, this is not the primary advantage of real-time communication.

Thus, the correct answer is A.

Question No. 5

Which of the following statements is appropriate to include in a high-quality internal audit engagement communication?

AThe internal audit team conducted a review of the financial reporting process prior to year-end. The overall findings have been provided for management's consideration prior to the completion of the organization's annual external financial audit.

BThe internal audit team noted numerous weaknesses in the organization's internal controls over financial reporting. The team recommends that management determine the root cause of the weaknesses.

CThe internal audit team conducted an engagement under the assumption that significant control weaknesses were likely. The purpose of the review was to uncover those weaknesses.

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Correct Answer: A

Comprehensive and Detailed Step-by-Step Explanation:

Reference to IIA Standards:

Standard 2420 - Quality of Communications: Reports should be accurate, objective, clear, concise, constructive, and complete.

Findings must be presented factually and free from assumptions or bias.

Reasoning:

Option A is correct because it presents the purpose, timing, and findings in a clear and professional manner, allowing management to take informed action.

Option B lacks balance and shifts responsibility for identifying root causes to management without actionable recommendations.

Option C includes a biased assumption, undermining the report's objectivity and professionalism.

Impact of Quality Communication:

High-quality communications support decision-making by presenting findings and recommendations constructively.

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