Free IIA-CHAL-QISA Practice Test Questions 2026

A rapidly expanding retail organization continues to be tightly controlled by its original small management team. Which of the following is a potential risk in this vertically centralized organization?

A. Lack of coordination among different business units

B. Operational decisions are inconsistent with organizational goals.

C. Suboptimal decision-making.

D. Duplication of business activities.

An engagement supervisor obtains facilities maintenance reports from a contractor during an audit of third-party services. Which of the following is the source of authority for the engagement supervisor to make such contact outside the organization?

A. The policies and procedures of the internal audit activity.

B. The provisions of the internal audit charter.

C. The authority of the CEO.

D. The IIA's Code of Ethics.

A bicycle manufacturer incurs a combination of fixed and variable costs with the production of each bicycle. Which of the following statements is true regarding these costs?

A. if the number of bicycles produced is increased by 15 percent, the variable cost per unit will increase proportionally

B. The fixed cost per unit will vary directly based on the number of bicycles produced during the production cycle.

C. The total variable cost will vary proportionally and inversely with the number of bicycles produced during a production run.

D. if the number of bicycles produced is increased by 30 percent, the fixed cost per unit will decline.

According to IIA guidance, which of the following steps should precede the development of audit engagement objectives?

A. Identification of controls.

B. Scope establishment.

C. Risk assessment.

D. Review of resources.

Which of the following situations best applies to an organization that uses a project, rather than a process, to accomplish its business activities?

A. A clothing company designs, makes, and sells a new item.

B. A commercial construction company is hired to build a warehouse.

C. A city department sets up a new firefighter training program.

D. A manufacturing organization acquires component parts from a contracted vendor

Which of the following best describes the guideline for preparing audit engagement workpapers?

A. Workpapers should be understandable to the auditor in charge and the chief audit executive

B. Workpapers should be understandable to the audit client and the board.

C. Workpapers should be understandable to another internal auditor who was not involved in the engagement.

D. Workpapers should be understandable to external auditors and regulatory agencies

The internal audit activity is currently working on several engagements, including a consulting engagement on the management process in the human resources department. Which of the following actions should the chief audit executive take to most efficiently and effectively ensure the quality of the engagement?

A. Assign an experienced manager to monitor the whole engagement process.

B. Employ fieldwork peer review to enhance the work quality.

C. Require internal auditors to follow a standardized work program.

D. Personally supervise the engagement

At a conference an internal auditor presented a new computer-assisted audit technique developed by his organization The presentation included sample data derived from performing audit engagements for the organization. Travel costs were paid by the conference organizers and the trip was approved by the chief audit executive (CAE). However, neither management nor the CAE was aware that the internal auditor would be making a presentation based on work completed for the organization According to IIA guidance, which of the following statements is most relevant regarding the actions of the auditor?

A. The auditor did not violate the standard of objectivity because the presentation had no impact on the organization.

B. The auditor violated the principle of confidentiality by disclosing information about the organization without approval.

C. The auditor should have obtained permission before using the material, but did not violate the IIA Code of Ethics or Standards

D. The auditor breached the conflict of interest standard by accepting payment for travel costs

Which of the following would be considered a violation of The IIA’s mandatory guidance on independence?

A. The chief audit executive (CAE) reports functionally to the board and administratively to the chief financial officer

B. The board seeks senior managements recommendation before approving the annual salary adjustment of the CAE.

C. The CAE confirms to the board, at least once every five years, the organizational independence of the internal audit act/vity.

D. The CAE updates the internal audit charter and presents it to the board for approval periodically, not on a specific timeline

Which of the following recognized competitive strategies focuses on gaining efficiencies?

A. Focus

B. Cost leadership.

C. Innovation

D. Differentiation

An organization's health-care insurance costs have been rising approximately 10 percent per year for several years Which of the following analytical review procedures would best evaluate the reasonableness of the increase in health-care costs?

A. Develop a comparison of the costs incurred with similar costs incurred by other organizations

B. Obtain the government index of health-care costs for the comparable period of time and compare the rate of increase with that of the cost per employee incurred by the organization.

C. Obtain a bid from another health-care administrator to provide the same administrative services as the current health-care administrator.

D. Review all claims and compare with appropriate procedures to ensure that overpayments have not occurred

Which of the following statements is true regarding the management-by-objectives method?

A. Management by objectives is most helpful in organizations that have rapid changes

B. . Management by objectives is most helpful in mechanistic organizations with rigidly

C. Management by objectives helps organizations to keep employees motivated.

D. Management by objectives helps organizations to distinguish clearly strategic goals from operational goals