Preview Questions Internal Auditor | Role Specific Skill

Question 1: What does IFRS 9 require for impairment of financial assets at amortized cost?

Which action should you take?

Choose only one option

Provision based on incurred credit loss

Provision based on market risk factors

Provision based on historical credit loss

Provision based on expected credit loss

Question 2: Under IAS 37, a provision should be recognized when:

Which action should you take?

Choose only one option

The amount can be estimated with certainty

There is a present obligation arising from a past event

The entity expects no outflow of resources

The event is highly probable to occur

Question 3: How should an internal auditor evaluate compliance with financial consumer protection laws, such as the Truth in Lending Act (TILA)?

Which action should you take?

Choose only one option

By confirming appropriate loan provisioning practices

By reviewing loan agreements for clarity and full disclosure

By ensuring proper loan provision reserves

By assessing the accuracy of customer transactions

Question 4: What does a walkthrough test in internal auditing aim to verify?

Which action should you take?

Choose only one option

Whether clients' data is secure and protected

Whether audit fees are allocated correctly

Whether the process is functioning as intended and controls are being applied as designed

Whether financial records are being properly archived

Question 5: Which of the following best describes the relationship between risk and return in risk management?

Which action should you take?

Choose only one option

Higher risk always leads to higher returns

Lower risk always leads to lower returns

Risk and return are unrelated concepts

Higher risk may lead to higher returns but also increases the likelihood of loss

Question 6: In relation to IAS 32, how is an instrument classified as equity or liability?

Which action should you take?

Choose only one option

It depends on whether the issuer has the obligation to deliver cash or another financial asset

It is classified depending on the issuer's profitability

It is classified based on the duration of the instrument

It is classified based on the company's cash flow projections