Preview Questions Internal Auditor | Role Specific Skill

Question 1: Which of the following would most likely trigger an impairment review under IAS 36?

Which action should you take?

Choose only one option

Increase in operational efficiency

Significant adverse change in the market environment

Change in the fair value of the asset

Consistent profitability over the last quarter

Question 2: Which of the following best defines "compliance auditing" in the BFSI sector?

Which action should you take?

Choose only one option

A systematic review of policies and procedures to ensure legal and regulatory compliance

The assessment of operational efficiency in business processes

The identification and mitigation of fraud risk

The analysis of financial statements for accuracy and adherence to accounting principles

Question 3: How should an internal auditor assess off-balance-sheet financing in financial reporting?

Which action should you take?

Choose only one option

By assessing the implications on tax liabilities

By reviewing the legal contracts related to financing

By ensuring that it is properly disclosed and does not materially misstate financial health

By evaluating the market conditions influencing financing

Question 4: What is the effect of an impairment loss under IFRS 9 for debt instruments measured at amortized cost?

Which action should you take?

Choose only one option

It reduces the carrying value of the asset and is recognized in profit or loss

It results in a reclassification of the asset to the fair value category

It leads to the immediate reversal of any prior gains

It increases the carrying value of the asset

Question 5: What is the primary difference between "accrual accounting" and "cash basis accounting" in financial reporting?

Which action should you take?

Choose only one option

Cash basis accounting records revenues and expenses when they are earned or incurred, regardless of cash movements

Cash basis accounting requires inventory adjustments at the end of each period

Accrual accounting records revenues and expenses when they are earned or incurred, regardless of when cash is received or paid

Accrual accounting only records cash transactions

Question 6: What is the primary objective of conducting a compliance audit in the BFSI sector?

Which action should you take?

Choose only one option

To assess compliance with legal and regulatory requirements

To review internal controls for operational efficiency

To evaluate the accuracy of financial statements

To ensure adherence to financial reporting standards