“200”, Aptitude Test Questions and Answers for Internal Audit Officer Grade II – MDA & LGA.
ABSTRACT
This collection contains 200
multiple-choice questions designed to help candidates prepare for the Internal
Audit Officer Grade II public service aptitude test in Tanzania. The questions
reflect real exam style and difficulty, covering internal audit practice, risk
management, internal controls, governance, public financial management, and key
international auditing principles. Many items are scenario-based and focus on
practical application and analytical thinking. Overall, the material serves as
a focused revision tool to strengthen technical understanding and improve
candidates’ readiness for competitive internal audit recruitment exams.
Prepared by: Auditors
Compiled by Johnson Yesaya Mgelwa.
A lawyer stationed in Dar-es-salaam.
0628729934.
Date: December 15, 2025
Dear applicants,
This collection of questions and answers has been carefully prepared to help all of you to understand the key areas tested during the interview. The goal is to provide a useful and practical study guide so you can all perform confidently and fairly in the selection process. I wish you the best of luck, and may this resource support you in achieving success!
Warm regards,
Johnson Yesaya Mgelwa
For Personal Use by Applicants Preparing
for MDA and LGA Internal Audit Officer Grade II interview at Public Service
Recruitment Service.
ALL
QUESTIONS ARE COMPILED TOGETHER.
1. During planning of an internal audit, the auditor prepares a document outlining objectives, scope, timing and procedures to be performed. What is this document called?
A. Audit working paper B. Audit report draft C. Risk register D. Audit program
Answer: D
Rationale: An audit program is a structured plan
detailing the objectives, scope, timing and specific procedures to be performed
during an audit. It guides the auditor on what work should be done and ensures
consistency and completeness. Working papers support evidence, while reports
are prepared after fieldwork, making the audit program the correct planning
document.
2. An Internal Auditor discovers that revenue collected at a local
government office is not reconciled daily. What is the most immediate risk?
A. Overstaffing risk B. Fraud or misappropriation risk C. Budget deficit risk D.
Policy implementation delay
Answer: B
Rationale: Failure to reconcile revenue daily
creates opportunities for fraud, theft, or misappropriation because
discrepancies may remain undetected for long periods. Daily reconciliation is a
key internal control in public finance management. Overstaffing or policy
delays are unrelated to this specific control weakness.
3. Which of the following best describes internal audit
independence within an MDA or LGA?
A. Reporting to the finance officer B. Reporting to operational management C.
Reporting functionally to the Audit Committee D. Reporting to procurement unit
Answer: C
Rationale: Internal audit independence is
strengthened when the internal auditor reports functionally to the Audit
Committee rather than operational management. This structure prevents undue
influence and allows objective reporting. Reporting to finance or procurement
would compromise independence.
4. Before conducting a special investigation, an internal auditor
should first:
A. Issue the final audit report B. Develop an investigation plan C. Approve
disciplinary action D. Close the audit file
Answer: B
Rationale: Investigations require structured
planning to determine scope, procedures, evidence requirements and reporting
lines. Developing an investigation plan ensures the process is systematic and
legally defensible. Final reports and disciplinary actions come after evidence
collection.
5. Which internal control is designed to detect errors after
transactions have occurred?
A. Authorization control B. Preventive control C. Detective control D.
Segregation control
Answer: C
Rationale: Detective controls identify errors or
irregularities after they occur. Examples include reconciliations and reviews.
Preventive controls stop errors before they happen, while authorization and
segregation are preventive in nature.
6. An auditor reviewing procurement notices that the same officer
prepares, approves and records payments. This violates which control principle?
A. Supervision control B. Segregation of duties C. Budget control D.
Documentation control
Answer: B
Rationale: Segregation of duties requires that no
single officer handles all aspects of a transaction. Combining preparation,
approval and recording increases fraud risk and weakens internal controls.
Proper separation ensures accountability and reduces error or manipulation.
7. Which of the following is the primary purpose of risk assessment
during audit planning?
A. To prepare financial statements B. To determine staff salaries C. To
identify areas of high audit focus D. To approve procurement
Answer: C
Rationale: Risk assessment helps auditors identify
high-risk areas requiring more attention and resources. It ensures efficient
allocation of audit effort and improves audit effectiveness. Preparing
financial statements and procurement approval are management roles.
8. A local authority fails to implement previous audit
recommendations. What should the internal auditor do next?
A. Ignore past findings B. Close the audit permanently C. Follow up
implementation status D. Destroy previous reports
Answer: C
Rationale: Following up on implementation of
recommendations is a core internal audit duty. It ensures corrective actions
are taken and improves accountability. Ignoring findings would weaken
governance and control systems.
9. Which document provides evidence that audit procedures were
performed and conclusions reached?
A. Budget estimates B. Audit working papers C. Payroll register D. Procurement
plan
Answer: B
Rationale: Audit working papers document procedures
performed, evidence obtained and conclusions reached. They support audit
opinions and provide proof of work done. Budget estimates and payroll records
are sources of data but not evidence of audit procedures.
10. An auditor finds that cash receipts are recorded but not banked
promptly. Which risk arises most directly?
A. Overbudgeting risk B. Policy noncompliance risk C. Asset depreciation risk D.
Cash misappropriation risk
Answer: D
Rationale: Delayed banking of cash increases the
risk of theft or misuse before deposit. Prompt banking is a key internal
control for safeguarding public funds. Other risks listed are less directly
linked to delayed deposits.
11. Which type of audit focuses on evaluating efficiency and
effectiveness of operations?
A. Financial audit B. Compliance audit C. Performance audit D. Forensic audit
Answer: C
Rationale: Performance audits assess whether
resources are used economically, efficiently and effectively. Financial audits
focus on accuracy of financial statements, while compliance audits examine
adherence to laws and policies.
12. An internal auditor provides advice on improving internal
controls without taking over management functions. This role is known as:
A. Assurance role B. Consulting role C. Enforcement role D. Supervisory role
Answer: B
Rationale: Internal auditors provide consulting
services by advising management on improving systems and controls. However,
they must avoid taking over management responsibilities to maintain
independence. Assurance roles involve evaluating controls rather than advising.
13. Which of the following best indicates strong corporate governance in a public institution?
A. Lack of oversight B. Concentration of authority C. Effective audit committee
oversight D. Absence of internal audit
Answer: C
Rationale: Strong corporate governance includes
oversight by an independent audit committee, transparency and accountability.
Concentrated authority and lack of oversight weaken governance structures.
14. During an audit, management refuses to provide requested
documents. What should the auditor do first?
A. Ignore the issue B. Escalate through proper reporting channels C. Close the
audit D. Alter findings
Answer: B
Rationale: If management withholds information, the
auditor should escalate the issue through proper channels such as senior
management or the audit committee. This ensures independence and access to
information necessary for audit completion.
15. Which of the following is an example of a preventive control?
A. Bank reconciliation B. Independent review C. Authorization before payment D.
Variance analysis
Answer: C
Rationale: Authorization before payment prevents
unauthorized transactions from occurring. Reconciliations and reviews detect
errors after they happen, making them detective controls rather than
preventive.
16. An internal auditor is reviewing a risk register. What is the
main objective?
A. To calculate salaries B. To identify and evaluate institutional risks C. To
prepare financial reports D. To approve budgets
Answer: B
Rationale: Risk registers document identified
risks, likelihood and mitigation measures. Reviewing them helps auditors assess
risk management effectiveness and determine audit priorities. Salary
calculations and budgeting are unrelated.
17. If audit evidence is insufficient, the auditor should:
A. Issue final opinion immediately B. Expand audit procedures C. Ignore missing
evidence D. Assume compliance
Answer: B
Rationale: Auditors must gather sufficient and
appropriate evidence before forming conclusions. If evidence is insufficient,
additional procedures should be performed. Issuing an opinion without evidence
compromises audit quality.
18. Which of the following is NOT a function of internal audit?
A. Evaluating controls B. Monitoring risks C. Managing daily operations D.
Providing recommendations
Answer: C
Rationale: Internal auditors evaluate systems and
provide recommendations but should not manage daily operations. Doing so would
compromise independence and objectivity.
19. In public sector auditing, accountability primarily refers to:
A. Ensuring proper use of public resources B. Increasing salaries C. Reducing
staff D. Eliminating policies
Answer: A
Rationale: Accountability in public sector auditing
focuses on ensuring that public funds and resources are used lawfully,
efficiently and transparently. This supports public trust and good governance.
20. Which tool helps an auditor analyze trends in financial data
over time?
A. Ratio analysis B. Payroll sheet C. Inventory ledger D. Voucher file
Answer: A
Rationale: Ratio and trend analysis help auditors
identify unusual fluctuations and potential risks in financial data. Payroll
sheets and vouchers are source documents but not analytical tools.
21. An auditor identifies duplicate payments to a supplier. What
type of audit finding is this?
A. Compliance weakness B. Control override C. Error or fraud indicator D.
Budget variance
Answer: C
Rationale: Duplicate payments suggest either error
or potential fraud. They indicate weaknesses in controls such as invoice
verification and payment authorization.
22. Which stage of audit involves examining records and collecting
evidence?
A. Planning stage B. Reporting stage C. Follow-up stage D. Fieldwork stage
Answer: D
Rationale: Fieldwork is where auditors perform
tests, examine records and collect evidence. Planning occurs earlier, while
reporting and follow-up occur after fieldwork.
23. An internal auditor must maintain confidentiality of information
obtained during audits. This principle relates to:
A. Integrity B. Objectivity C. Confidentiality D. Competence
Answer: C
Rationale: Confidentiality requires auditors to
protect sensitive information and not disclose it without authority. This is a
key ethical requirement in auditing standards.
24. Which of the following best strengthens internal control over
payroll?
A. Independent review of payroll B. No employee verification C. One person
handles all payroll tasks D. Cash payments without records
Answer: A
Rationale: Independent review ensures payroll
accuracy and prevents fraud such as ghost workers. Combining duties and lack of
verification weakens controls.
25. The main purpose of an internal audit report is to:
A. Approve expenditures B. Hire staff C. Prepare budgets D. Communicate
findings and recommendations
Answer: D
Rationale: Internal audit reports communicate
findings, risks and recommendations to management and oversight bodies. They
support corrective actions and improved controls rather than approving
expenditures or hiring staff.
26. While reviewing an LGA expenditure system, the auditor notices
that payments are supported by documents but lack evidence of approval. What is
the strongest audit concern?
A. Weak authorization control B. Delay in procurement C. Inadequate budget D.
Poor filing system
Answer: A
Rationale: Payments without evidence of approval
indicate a breakdown in authorization controls, which are fundamental to
preventing unauthorized or fraudulent transactions. Even if documents exist,
lack of approval exposes the institution to misuse of funds and weak
accountability.
27. An auditor is planning a risk-based audit. Which factor should
influence audit priority most?
A. Department size B. Staff experience C. Risk exposure and impact D. Office
location
Answer: C
Rationale: Risk-based auditing prioritizes areas
with high likelihood and impact of risk. Audit resources are directed to areas
where failures would significantly affect operations, finances or compliance.
Department size or location alone does not determine risk level.
28. A procurement officer consistently splits purchases to avoid
tender thresholds. This indicates:
A. Budget reallocation B. Procurement efficiency C. Control improvement D.
Possible procurement fraud
Answer: D
Rationale: Splitting purchases to avoid tender
thresholds is a common fraud and compliance violation tactic. It bypasses
procurement regulations and competitive processes, undermining transparency and
value for money.
29. Which of the following best demonstrates professional skepticism
in auditing?
A. Accepting all explanations B. Ignoring unusual transactions C. Questioning
inconsistent evidence D. Trusting management fully
Answer: C
Rationale: Professional skepticism requires
auditors to critically assess evidence and question inconsistencies. Blind
trust or ignoring anomalies undermines audit effectiveness and increases risk
of undetected fraud or error.
30. During audit fieldwork, an auditor finds unsupported payments
made at year-end. What is the most likely explanation to investigate first?
A. Year-end adjustment risk B. Seasonal budgeting C. Staff training need D.
Office relocation
Answer: A
Rationale: Unsupported year-end payments may
indicate attempts to exhaust budgets or manipulate financial results. Such
transactions require careful review for compliance and legitimacy. Seasonal
budgeting alone does not justify unsupported payments.
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