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IIA IIA-ACCA Exam
ACCA CIA Challenge Exam (Page 3 )

Updated On: 12-Feb-2026
Page 3 of 122
PDF with 604 Questions

An organization is beginning to implement an enterprise risk management program. One of the first steps is to develop a common risk language.
Which of the following statements about a common risk language is true?

  1. Management will be able to reduce inherent risk because they will have a better understanding of risk.
  2. Internal auditors will be able to reduce their sample sizes because controls will be more consistent.
  3. Stakeholders will have more assurance that the risks are assessed consistently.
  4. Decision makers will understand that the likelihood of missing or ineffective controls will be reduced.

Answer(s): C



An organization invests its savings in a volatile stock with the potential for high gains rather than a mutual fund with a lower expected return and lower volatility. This best describes which of the following risk concepts?

  1. Risk identification.
  2. Risk appetite.
  3. Risk capacity.
  4. Risk tolerance.

Answer(s): D



Which of the following best describes the misdirection of payments on accounts receivable to an employee's bank account?

  1. Fraud open on the books.
  2. Fraud hidden on the books.
  3. Fraud off the books.
  4. Fraud on the balance sheet.

Answer(s): C



When auditing the award of a major contract, which of the following should an internal auditor suspect as a red flag for a bidding fraud scheme?
1. Subsequent change orders increase requirements for low-bid items.
2. Material contract requirements are different on the actual contract than on the request for bids.
3. A high percentage of employees are charged to indirect accounts.

4. Losing bidders are hired as subcontractors.

  1. 1 only
  2. 2 only
  3. 1 and 3.
  4. 2 and 4.

Answer(s): D



Which of the following combinations of conditions is most likely a red flag for fraud?

  1. The practice of surprise audits and the implementation of an employee support program.
  2. Hiring an employee with a prior fraud conviction and yearly management review.
  3. Occasional accounting department overrides and discontinuation of the anonymous fraud hotline due to infrequent use.
  4. A veteran employee in upper management experiencing financial difficulties and recently implemented enhanced controls.

Answer(s): C






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