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Total 181 questions
Exam Code: IIA-ACCA                Update: Oct 14, 2025
Exam Name: ACCA CIA Challenge Exam

IIA ACCA CIA Challenge Exam IIA-ACCA Exam Dumps: Updated Questions & Answers (October 2025)

Question # 1

After finalizing an assurance engagement concerning safety operations in the oil mining process, the audit team concluded that no key controls were compromised. However, some opportunities for improvement were noted. Which of the following would be the most appropriate way for the chief audit executive (CAE) to report these results?

A.

The CAE should send the final report to operational and senior management and the audit committee.

B.

The CAE should send the final report to operational management only, as there is no need to communicate this information to higher levels.

C.

The CAE should notify operational and senior management that the audit engagement was completed with no significant findings to report.

D.

The CAE should send the final report to operational management and notify senior management and the audit committee that no significant findings were identified.

Question # 2

If observed during fieldwork by an internal auditor, which of the following activities is least important to communicate formally to the chief audit executive?

A.

Acts that may endanger the health or safety of individuals.

B.

Acts that favor one party to the detriment of another.

C.

Acts that damage or have an adverse effect on the environment.

D.

Acts that conceal inappropriate activities in the organization.

Question # 3

Which of the following is not a direct benefit of control self-assessment (CSA)?

A.

CSA allows management to have input into the audit plan.

B.

CSA allows process owners to identify, evaluate, and recommend improving control deficiencies.

C.

CSA can improve the control environment.

D.

CSA increases control consciousness.

Question # 4

An employee in the sales department completes a purchase requisition and forwards it to the purchaser. The purchaser places competitive bids and orders the requested items using approved purchase orders. When the employee receives the ordered items, she forwards the packing slips to the accounts payable department. The invoice for the ordered items is sent directly to the sales department, and an administrative assistant in the sales department forwards the invoices to the accounts payable department for payment. Which of the following audit steps best addresses the risk of fraud in the cash receipts process?

A.

Verify that approvals of purchasing documents comply with the authority matrix.

B.

Observe whether the purchase orders are sequentially numbered.

C.

Examine whether the sales department supervisor approves invoices for payment.

D.

Determine whether the accounts payable department reconciles all purchasing documents prior to payment.

Question # 5

Which of the following is least likely to help ensure that risk is considered in a work program?

A.

Risks are discussed with audit client.

B.

All available information from the risk-based plan is used.

C.

Client efforts to affect risk management are considered.

D.

Prior risk assessments are considered.

Question # 6

When forming an opinion on the adequacy of management's systems of internal control, which of the following findings would provide the most reliable assurance to the chief audit executive?

• During an audit of the hiring process in a law firm, it was discovered that potential employees' credentials were not always confirmed sufficiently. This process remained unchanged at the following audit.

• During an audit of the accounts payable department, auditors calculated that two percent of accounts were paid past due. This condition persisted at a follow up audit.

• During an audit of the vehicle fleet of a rental agency, it was determined that at any given time, eight percent of the vehicles were not operational. During the next audit, this figure had increased.

• During an audit of the cash handling process in a casino, internal audit discovered control deficiencies in the transfer process between the slot machines and the cash counting area. It was corrected immediately.

A.

1 and 3 only

B.

1 and 4 only

C.

2 and 3 only

D.

2 and 4 only

Question # 7

Which of the following best illustrates the primary focus of a risk-based approach to control self-assessment?

A.

To evaluate controls regarding the computer security of an oil refinery.

B.

To examine the processes involved in exploring, developing, and operating a gold mine.

C.

To assess the likelihood and impact of events associated with operating a finished goods warehouse.

D.

To link a financial institution's business objectives to a work unit responsible for the associated risk.

Question # 8

Which of the following offers the best evidence that the internal audit activity has achieved organizational independence?

A.

An independent third party has assessed the organization's system of internal controls to be adequate and effective.

B.

The chief audit executive reports both functionally and administratively to the CEO.

C.

The internal audit charter is drafted properly and approved by the appropriate parties.

D.

The mission statement and strategy of the internal audit activity demonstrates alignment to organizational objectives.

Question # 9

An internal auditor is reviewing the accounts receivable when she discovers account balances more than three years old. The auditor was previously supervising the area during this time, and she subsequently advises the chief audit executive (CAE) of a potential conflict.

Which of the following is the most appropriate course of action for the CAE to take?

A.

Replace the auditor with another audit staff member.

B.

Continue with the present auditor, as more than one year has passed.

C.

Withdraw the audit team and outsource the financial audit of the division.

D.

Work with the division's management to resolve the situation.

Question # 10

Which of the following is true regarding the use of a formal risk management framework?

1. It facilitates a methodical approach to risk mitigation.

2. It defines and standardizes the terminology used in risk communication.

3. It establishes the risk tolerance levels to be accommodated in the strategy.

4. It facilitates the alignment of risk mitigation strategies with management priorities.

A.

1.2, and 3.

B.

1,2, and 4.

C.

1.3, and 4.

D.

2. 3, and 4.

Question # 11

In which of the following functions would fraud be most likely to occur?

A.

Maintaining custody of inventory records.

B.

Collecting payments on accounts.

C.

Approving changes to employee records.

D.

Preparing customer statements.

Question # 12

A government agency maintains a system of internal control, according to the COSO model, and has made a change to its employee performance reviews and rewards program. This change relates to which of the following components of COSO's internal control framework?

A.

Control environment.

B.

Control activities.

C.

Information and communication.

D.

Monitoring activities.

Question # 13

Which of the following is most likely to function as a directive control?

A.

Security dogs.

B.

Alert employees.

C.

Insurance claims.

D.

Cycle counts.

Question # 14

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.

Question # 15

An organization is facing a financial downturn and needs to impose major budget reductions to all departments. According to MA guidance, which of the following actions is most appropriate for the board to take to evaluate the potential impact on the internal audit activity?

A.

Ask management to determine which internal audit engagements are lower risk and could be considered for removal from the annual audit plan.

B.

Ask appropriate stakeholders for their opinion on the potential impacts of reducing the scope of the internal audit plan.

C.

Ask the chief audit executive to determine whether budgetary limitations impede the ability of the internal audit activity to execute its responsibilities.

D.

Ask The human resources department to determine how the annual compensation and salary of the audit staff could be adjusted to achieve savings.

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Total 181 questions

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