The Multiple Choice Questions Blog

Which ONE of the following roles should the internal audit function NOT take on to help the board in its management of the company and still operate effectively?

Select ONE answer:

1. Giving expert advice on technical accounting matters
2. Liaising with the external auditors
3. Carrying out the statutory audit
4. Auditing board reports not audited by the external auditors

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – it is the external auditors who have the legal duty to carry out the statutory audit. It is, however, usually encouraged that there is some co-operation between the internal and external auditors where this is possible.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following roles could the internal audit carry out in respect of risk management and still operate effectively?

Select ONE answer:

1. Monitoring a random company’s overall sales strategy
2. Testing of internal controls in the company’s purchasing department
3. Designing an internal control system in a production department
4. Implementing internal controls in the sales department

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – Options 3 and 4 are NOT correct as they are too operational and would compromise internal audit’s monitoring role.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following roles could the internal audit carry out in respect of risk management and still operate effectively?

Select ONE answer:

1. Monitoring the company’s overall risk strategy
2. Designing an internal control system in a production department
3. Implementing internal controls in the sales department
4. Testing of internal controls in a competitor’s sales order process

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – Options 2 and 3 are NOT correct as they are too operational and would compromise internal audit’s monitoring role.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The scope and objectives of the internal audit function vary widely and depend on the size and structure of the entity and the requirements of its management.

Which ONE of the following functions could the internal audit perform and still operate effectively?

Select ONE answer:

1. Authorisation of unusual transactions
2. Development of internal control systems
3. Examination of the competitors’ websites
4. Review of the company’s compliance with laws and regulations

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – Authorising unusual transactions and developing internal control systems are part of the accounting function in an entity. For the internal audit function to operate objectively and independently, it should not be involved in these activities.

This work is licensed under a Creative Commons Attribution 4.0 International License.

The scope and objectives of the internal audit function vary widely and depend on the size and structure of the entity and the requirements of its management.

Which ONE of the following functions could the internal audit perform and still operate effectively?

Select ONE answer:

1. Authorisation of unusual transactions
2. Development of internal control systems
3. Examination of financial and operating information
4. Review of the company’s compliance with website design standards

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – Authorising unusual transactions and developing internal control systems are part of the accounting function in an entity. For the internal audit function to operate objectively and independently, it should not be involved in these activities.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.