Preview Questions Internal Auditor | Role Specific Skill

Question 1: Which of the following is a key principle of IAS 12 on Income Taxes?

Which action should you take?

Choose only one option

Tax expense is based only on taxable income

Tax expense is based solely on tax paid

Deferred tax should be recognized for all temporary differences

No provision for taxes is needed for uncertain tax positions

Question 2: What is the key difference between operating leases and finance leases in financial reporting?

Which action should you take?

Choose only one option

Operating leases are capitalized, while finance leases are disclosed

Finance leases are treated as expenses, while operating leases are disclosed off-balance-sheet

Finance leases involve a higher interest expense than operating leases

Operating leases are treated as expenses while finance leases are capitalized on the balance sheet

Question 3: How should an internal auditor approach the evaluation of risk in a financial institution's operations?

Which action should you take?

Choose only one option

By focusing only on operational risks

By only considering external factors, like market risks

By evaluating both the likelihood and impact of various risks

By evaluating risk based solely on financial losses

Question 4: How should an internal auditor assess the effectiveness of a company's compliance training programs?

Which action should you take?

Choose only one option

By reviewing the company's social media presence

By assessing the company's revenue generation capabilities

By checking if employee compensation aligns with industry standards

By evaluating whether employees are properly educated on compliance risks and regulations

Question 5: When auditing financial reports for a bank, which of the following areas would require the most scrutiny?

Which action should you take?

Choose only one option

The accuracy of loan loss provisions

The allocation of operating costs between departments

The proper classification of short-term and long-term debt

The accounting treatment of deposits and withdrawals

Question 6: When performing a risk inventory, what is the first action an internal auditor should take?

Which action should you take?

Choose only one option

Prioritize risks based on budget availability

Identify and document all potential risks across the organization

Assess the probability of risks without defining controls

Start by reviewing historical audit reports