Interview Test 12 Test 12 Welcome to AADVIKMS! Empowering Finance Careers Connect with top finance professionals and employers for exciting opportunities. Total Number of Questions: 40 Time: 40 Minutes All the best... Kind Regards CMA Madhuri Kashyap & CMA Sandeep Kumar - Founder - International Navodaya Chamber of Commerce Name Email Phone State 1. What is the primary objective of internal audit? To improve operational efficiency To detect fraud and errors To ensure compliance with laws To give an independent opinion on financial statements None 2. Which standard governs the internal audit function? AS 2 AS 10 IIA Standards SA 240 None 3. Internal Audit reports directly to which of the following? External Auditors Chief Financial Officer (CFO) Audit Committee or Board of Directors Finance Department None 4. Which of the following is NOT a type of internal audit? Compliance Audit Operational Audit Marketing Audit Financial Statement Audit None 5. The primary role of an internal auditor is to: Prevent fraud Monitor compliance Detect fraud Provide assurance and consulting None 6. Which of the following is NOT part of the internal audit process? Planning Execution Reporting Hiring employees None 7. Internal auditors evaluate risk to: Provide controls Eliminate risk entirely Reduce risk to an acceptable level Transfer risk to third parties None 8. Which of the following best defines "audit risk"? Risk of incorrect audit findings Risk that material misstatement goes undetected Risk of non-compliance with standards Risk of financial loss None 9. The scope of internal audit is determined by: External Auditor Internal Auditor - Management and Audit Committee Regulatory Authorities None 10. Which risk is associated with poor control processes? Operational risk Control risk Compliance risk Market risk None 11. An internal auditor’s independence is compromised when: They report to the board They audit a department they previously worked in They work with external auditors They perform both assurance and consulting roles None 12. What is the primary focus of an operational audit? Detecting financial errors Assessing the efficiency and effectiveness of operations Verifying financial statements Ensuring compliance with laws None 13. A “walkthrough test” in internal audit involves: Reviewing transactions from start to finish Interviewing department heads Observing employee performance Testing security controls None 14. An internal audit report typically includes: Detailed instructions on fixing issues Summary of findings, recommendations, and action plans Company policy updates Financial statements None 15. Which of these is a type of fraud detected in an internal audit? Embezzlement Inventory shrinkage Overstatement of assets All of the above None 16. Internal control procedures do NOT include: Physical safeguards Financial statement analysis Documentation Authorization and approval None 17. Which tool helps identify, assess, and prioritize risks? COSO Framework FMEA (Failure Mode Effect Analysis) Risk Assessment Matrix SWOT Analysis None 18. An internal auditor uses sampling techniques to: Reduce workload Ensure accuracy of all data Identify fraud directly Meet compliance requirements None 19. Who is responsible for establishing internal controls? Internal Auditors External Auditors Management Shareholders None 20. Control activities in an internal audit are best described as: Policies and procedures ensuring risks are mitigated Action plans for increasing productivity Revenue-enhancing activities None 21. An audit program includes: Audit objectives, scope, and audit procedures Audit findings and recommendations Financial data summaries Risk assessment matrix None 22. In COSO's framework, "Monitoring" means: Assessing the effectiveness of internal controls over time Reporting directly to shareholders Improving communication channels Increasing efficiency in operations None 23. A deficiency in internal control design means: Controls are perfectly effective Controls exist but are ineffective No controls are in place Controls are in place but redundant None 24. Materiality in internal auditing refers to: Only monetary impact Significance of an error or omission in decision-making Report size Scope of the audit None 25. The role of an internal audit in risk management is to: Define business objectives Provide guidelines for capital management Evaluate risk management processes Set the risk appetite None 26. Which of the following is a key component of the COSO Internal Control Framework? Risk Assessment Financial Reporting External Auditing Market Analysis None 27. Segregation of duties in internal control aims to: Increase operational efficiency Prevent errors and fraud Reduce staffing costs Enhance customer satisfaction None 28. Which of the following is NOT a typical responsibility of internal auditors? Evaluating internal controls Evaluating internal controls Assessing risk management processes Conducting compliance audits None 29. The "Three Lines of Defense" model includes all EXCEPT: Operational Management Internal Audit External Audit Risk Management and Compliance Functions None 30. Which of the following best describes "control environment"? The overall attitude, awareness, and actions of the board and management regarding internal controls The physical environment where controls are implemented The external factors affecting internal controls The technological tools used for control activities None 31. An internal auditor's objectivity is impaired when: They audit a function they previously managed They report findings to the audit committee They use statistical sampling in audits They attend training sessions on new regulations None 32. Which of the following is a preventive control? Reconciliations Segregation of duties Internal audits Post-transaction reviews None 33. The primary purpose of a compliance audit is to: Assess the efficiency of operations Verify the accuracy of financial statements Ensure adherence to laws, regulations, and policies Evaluate the effectiveness of internal controls None 34. Which of the following is an example of detective control? Password protection Security cameras - Employee training programs Pre-approval of transactions None 35. Internal auditors should possess which of the following qualities? Independence and objectivity Technical proficiency Effective communication skills All of the above None 36. Which document outlines the scope, objectives, and timing of an internal audit? Audit Charter Engagement Letter Audit Plan Risk Assessment Matrix None 37. Continuous auditing involves: Auditing all transactions in real-time Periodic audits at regular intervals Auditing only when issues are reported Annual audits of financial statements None 38. Which of the following is a limitation of internal control systems? They are infallible They can be circumvented by collusion They eliminate the need for external audits They are cost-free to implement None 39. The "tone at the top" refers to: The organization's financial performance The ethical climate set by the organization's leadership The volume of communication within the organization The hierarchical structure of the organization None 40. Which of the following is NOT a responsibility of the internal audit function? Designing and implementing internal controls Evaluating the effectiveness of internal controls Providing recommendations for improvement Monitoring compliance with policies and procedures None Thank you for participating in our test series! We hope it boosted your knowledge and prepared you well for finance job interviews. Keep leveraging what you've learned to build confidence and excel. Wishing you great success in your career journey! Time's upTime is Up!
