Free IIA IIA-CIA-Part1 Practice Questions 2026 - Page 14

According to IIA guidance, which of the following is a required aspect of an internal audit charter?

A. Management approval

B. Independent review

C. Reporting relationships

D. Quarterly assessment

A large commercial bank was fined by regulators for fraudulent practices when employees, over a period of time, opened thousands of new accounts for existing clients without the clients' consent. It was later found that employees were given unrealistic new account targets and were aggressively monitored by management on a daily basis.

Which of the following controls would have most likely reduced the likelihood of the fraudulent practice from occurring?

A. An evaluation of the current performance and compensation program.

B. The performance of background investigations on all existing employees.

C. The availability of fraud training to all employees.

D. The availability of an employee whistleblower hotline

The collaborating style for conflict resolution, where the parties promote assertiveness and work together to develop a mutually beneficial solution, is best used in which of the following situations?

A. Parties are confident of the solution and are ready to defend it.

B. There is a high level of trust among the parties.

C. Resolution is time sensitive and a quick decision is necessary.

D. The issue is more important to one patty than the others.

A whistleblower reveals to the chief audit executive (CAE) detailed allegations of potential fraud at the senior management level. Although the CAE has some experience in the area, she chooses to retain an external fraud expert to conduct the investigation. When asked by the director of finance to defend the expenditure, which of the following statements represents the CAE's best response?

A. The CAE refers to the Standards and explains that to protect her independence, she needs to remain isolated from the investigation.

B. The CAE refers to the Standards and explains that the internal audit activity must obtain competent assistance if needed.

C. The CAE refers to the Standards and explains that to protect her objectivity, she needs to remain isolated from the investigation.

D. The CAE describes the specifics of the allegation to underscore the importance of the situation and the need for expert investigation

Due to toe increased operational responsibility of the CEO. The chief audit executive (CAE) of an organization currently reports to the chief financial officer (CFO). What is the likely imped of such a situation?

A. There may be limitation m the scope of engagements that can be undertaken

B. The CPO could provide expert advice when auditing areas under his purview

C. The internal audit activity is adequately positioned when the CAE reports to a member of executive management

D. The expense of finance staff can be catted upon during an audit of finance-related areas

An internal auditor is assessing the effectiveness of the organization's risk management practices She checks to see whether risk management is an intégrai part of decision making and whether risk management is transparent, responsive to change and addresses uncertainty. According to HA guidance on risk management frameworks, which of the following approaches is the auditor most likely using?

A. Maturity model approach

B. Process element approach

C. Key principles approach

D. Key performance indicators approach.

What is expected of internal auditors in regards to due professional care?

A. Auditors perform assurance services without regard to cost

B. Auditors perform assurance services effectively to identify all risks

C. Auditors perform assurance services needed to achieve the engagement's objectives

D. Auditors perform assurance services to guarantee all significant risks will be addressed

According to MA guidance, which of the following gives the internal audit activity the authority to request supporting documentation for the invoices of a third-party service provider?

A. The internal audit policy manual.

B. The internal audit charter.

C. The board of directors.

D. The quality assurance and improvement program.

An internal auditor is reviewing the results of an employee survey at a mining company. Which of the following would alert the auditor to a potential ethics issue?

A. Women account for 20% of the total number of employees in the company.

B. Thirty percent of employees feel confident in raising concerns without a fear of retaliation.

C. Most employees believe that transparent and fair decision-making forms the basis of business ethics.

D. Employees with longer work experience believe that they deserve more privileges than new hires.

The chief audit executive (CAE) of a new internal audit activity is creating an internal audit charter According to IIA guidance, which of the following terms is most likely to be included in the charter?

A. Senior management will be present whenever the CAE interacts with the board, to ensure effective communication among all three parties.

B. Internal auditors will advise on the design of control policies and procedures in any area where the organization does not possess the requisite expertise,

C. Internal auditors will demonstrate competence, concern, and the dedication expected of a professional,

D. Internal auditors will receive performance-based compensation, including bonuses for reporting more than a stipulated number of observations.