Free IIA-ACCA Practice Test Questions 2026

Which of the following actions should the audit committee take to promote organizational independence for the internal audit activity?

A. Delegate final approval of the risk-based internal audit plan to the chief audit executive (CAE).

B. Approve the annual budget and resource plan for the internal audit activity.

C. Assist the CAE with hiring objective and competent internal audit staff.

D. Encourage the CAE to communicate and coordinate with the external auditor.

Which of the following enhances the independence of the internal audit activity?

A. The chief audit executive (CAE) approves the annual internal audit plan.

B. The CAE administratively reports to the board.

C. The audit committee approves the CAE's annual salary increase.

D. The chief executive officer approves the internal audit charter.

Which of the following is an example of a detective control?

A. Automatic shut-off valve.

B. Auto-correct software functionality.

C. Confirmation with suppliers and vendors.

D. Safety instructions.

A furniture manufacturer has installed a new fire sprinkler system at its central warehouse and canceled the existing fire insurance policy on that property. What change of risk response strategy does this course of action most likely reflect?

A. From sharing to reduction.

B. From acceptance to reduction.

C. From sharing to avoidance.

D. From acceptance to avoidance.

Which of the following items should the chief audit executive disclose to senior management regarding the results of the internal audit activity's quality assessments?

A. The internal audit activity's plan for resource allocation.

B. The amount of the organization's potential loss prevented by the risk-based auditing of the internal audit activity.

C. The number of audits from the annual internal audit plan that were completed last year.

D. The qualifications and independence of the assessment Team.

According to IIA guidance, which of the following scenarios demonstrates an internal auditor exercising due professional care?

When auditing investments, the auditor identified instruments with which he was unfamiliar. He decided not to select that type of investment in his sample, as he did not have the knowledge needed to

A. perform a proper assessment.

B. An auditor was reviewing inventory counts conducted by the warehouse staff. One truck containing an immaterial amount of inventory was off-site and wasn't verified by the auditor.

C. An auditor visited a plant that produces a significant portion of the organization's inventory. The day he arrived, the plant manager was out sick, so the auditor issued the report without interviewing the manager.

D. An auditor in charge needed to have testing completed by the end of the month, but was behind schedule. He identified a junior auditor to conduct the work for him on a complex area of the organization.

A headquarters-based internal auditor has been sent to a major overseas subsidiary to conduct various engagements. Initially, the internal auditor spends time to become familiar with local customs and organization's practices while embarking on the first engagement. Which of the following competencies does the internal auditor exercise?

A. Communication.

B. Persuasion and collaboration.

C. Business acumen.

D. Governance, risk, and control.

An organization invests its savings in a volatile stock with the potential for high gains rather than a mutual fund with a lower expected return and lower volatility. This best describes which of the following risk concepts?

A. Risk identification.

B. Risk appetite.

C. Risk capacity.

D. Risk tolerance.

Evidence discovered during the course of an engagement suggests that multiple incidents of fraud have occurred. There do not appear to be sufficient controls in place to prevent reoccurrence. Which of the following is the internal auditor's most appropriate next step?

A. Immediately notify management of the area under review and the other internal auditors involved in the engagement.

B. Discuss the situation with the engagement supervisor to determine whether fraud investigation experts are required to investigate the matter properly.

C. Fully document in the workpapers the evidence that has been discovered and recommend appropriate controls to address the fraud.

D. Provide the evidence that was discovered to local law enforcement for possible prosecution of the suspected fraud.

While performing an accounts payable engagement, a senior auditor wants to conduct several tests of controls for travel expenses. Which of the following actions are most appropriate for the senior auditor to undertake?

1. Ensure all tests use a random sampling technique.
2. Consider a judgmental approach for the sample size.
3. Assess testing errors through root cause analysis.
4. Ensure that the entire data set is tested.

A. 1 and 2.

B. 1 and 3.

C. 2 and 3.

D. 2 and 4.

Which of the following professional development approaches would offer internal auditors the most opportunities to broaden their engagement experiences?

A. Assign more experienced internal auditors to mentor the less experienced auditors.

B. Send internal auditors to external trainings in advanced internal audit topics.

C. Appraise internal auditors' performance and competencies at least annually and issue constructive feedback.

D. Rotate internal auditors among different engagement assignments.

According to IIA guidance, which of the following statements is true when an internal auditor performs consulting services that improve an organization's operations?

A. The services must be aligned with those defined in the internal audit charter.

B. The services must not be performed by the same internal auditor who performed assurance services, in order to maintain objectivity.

C. The services may preclude assurance services from the consulting engagement.

D. The services impose no responsibility to communicate information other than to the engagement client.