Free IIA-CRMA-ADV Practice Test Questions 2026

According to IIA guidance, which of the following statements is false regarding continuing professional education for the internal audit activity (IAA)?

A. Continuing professional education can be obtained through IAA involvement in research projects.

B. Employers are responsible for ensuring that the continuing professional education needs of the IAA are met.

C. Completion of self-study courses fulfills IAA continuing professional education requirements.

D. Specialized education that meets unique organizational needs cannot qualify as IAA professional development.

An accounts receivable clerk receives cash payments, posts the payments to customer accounts, and prepares the daily cash deposit. The clerk has been stealing some cash and manipulating the customer payments to hide the theft. This fraud could be detected with which of the following controls?

A. Monthly bank reconciliations are performed by the clerk on a timely basis.

B. Total cash deposits for the month are reconciled to the cash receipts journal.

C. Names, amounts, and dates on remittance advices are reconciled with the names, amounts, and dates recorded in the cash receipts journal.

D. Total cash deposits are compared with the bank reconciliation.

When an internal auditor applies due professional care to perform an assurance engagement, which of the following must she consider?
1. Findings of the last audit engagement performed.
2. Probability of significant errors, irregularities, or noncompliance.
3. Extent of work needed to achieve engagement objectives.
4. Cost of the engagement versus the potential benefits.

A. 1 and 4 only

B. 2 and 3 only

C. 2, 3, and 4 only

D. 1, 2, 3, and 4

During an account receivables audit, an internal auditor found a significant number of input errors resulting in a $500, 000 balance understatement. Which of the following is the most important question the internal auditor should ask to develop an appropriate recommendation for this finding?

A. Who?

B. How?

C. Why?

D. When?

Which of the following is not a role of the internal audit activity in facilitating risk identification and evaluation?

A. Evaluating risk management processes.

B. Recommending accountability for risk management.

C. Providing assurance that risks are evaluated correctly.

D. Supporting managers to identify ways to mitigate risks.

A chief audit executive (CAE) of an international charity reports functionally to the audit committee of the board of directors and administratively to the charity's chief financial officer (CFO).
Which of the following would impair the internal audit function's independence?

A. The CFO determines the scope of internal audit work in the accounting department.

B. The CFO manages the accounting of the budget for the internal audit function.

C. The CFO administers the annual evaluation process for the internal auditors.

D. The CFO provides feedback on the CAE's audit reports.

An internal auditor for a large retail chain suspects that a store manager has been stealing money from cash sales by listing the sales as accounts receivable and then writing off the accounts as bad debts. Which of the following irregularities is the most likely cause of the auditor's suspicion?

A. A much higher bad debt expense as a percentage of sales than that of previous years.

B. A much higher bad debt expense as a percentage of sales than that of other stores.

C. A much higher percentage of past-due accounts receivable than that of other stores.

D. A much higher percentage of past-due accounts receivable than that of previous years.

Which of the following would most likely be considered a red flag for fraud?

A. An organization lacks a whistleblower hotline for reporting suspicious activity.

B. A senior manager has been delegating the authority to sign-off on small dollar amount purchases to a subordinate.

C. An employee in charge of payroll disbursements has rotated these duties with several colleagues.

D. An employee with significant personal debt is in charge of handling large wire transfers for the organization.

Which of the following is an example of a transaction-level control?

A. Human resource policies.

B. Tone at the top.

C. Reconciliations of primary accounts.

D. Inventory counts.

Which of the following is the most effective strategy to manage the risk of foreign exchange losses due to sales to foreign customers?

A. Hire a risk consultant.

B. Implement a hedging strategy.

C. Maintain a large foreign currency balance.

D. Insist that customers only pay in a stable currency.

Which of the following actions should an internal auditor take to exercise due professional care?
1. Consider the probability of significant noncompliance in each audit engagement.
2. Weigh the cost of assurance against the benefits.
3. Perform assurance procedures with sufficient care to ensure that all risks are identified.

A. 1 and 2 only

B. 1 and 3 only

C. 2 and 3 only

D. 1, 2, and 3

When conducting an interview, an internal auditor is most likely to ask open-ended questions in order to:

A. Obtain specific answers and maximize efficiency.

B. Gather factual data on several different topics.

C. Determine agreement or disagreement with a stated viewpoint.

D. Obtain information based on the person's own perspective.