Preview Questions Internal Auditor | Role Specific Skill

Question 1: In the context of financial reporting, what is the primary concern of an internal auditor regarding management estimates?

Which action should you take?

Choose only one option

Reviewing the impact of estimates on cash flows

Verifying if the estimates are accurate based on historical data

Evaluating whether the estimates are reasonable, consistent, and in line with industry standards

Ensuring that management estimates do not affect tax liabilities

Question 2: In the context of a financial institution, which of the following would NOT typically be a focus area in a compliance audit?

Which action should you take?

Choose only one option

Auditing the compliance with local, state, and federal tax laws

Verifying the implementation of Basel III capital adequacy standards

Ensuring that anti-bribery policies are in place and followed

Reviewing the company's performance on stock exchanges

Question 3: Under the Dodd-Frank Act, which of the following would require a compliance audit?

Which action should you take?

Choose only one option

Mortgage servicing regulations

Asset management fee disclosures

Credit card interest rates

Bank lending policies

Question 4: Under IFRS 3, how is goodwill recognized in a business combination?

Which action should you take?

Choose only one option

Amortized over a maximum of 5 years

At fair value, with impairment tested annually

As the difference between the price paid and net assets acquired

As the excess of the fair value of acquired assets over liabilities

Question 5: How should an internal auditor evaluate compliance with financial consumer protection laws, such as the Truth in Lending Act (TILA)?

Which action should you take?

Choose only one option

By confirming appropriate loan provisioning practices

By reviewing loan agreements for clarity and full disclosure

By ensuring proper loan provision reserves

By assessing the accuracy of customer transactions

Question 6: In IFRS 16, how should a lessee account for a lease liability?

Which action should you take?

Choose only one option

At the present value of future lease payments

As a contingent liability

Only when lease payments are due

At the asset's market value