Free IIA IIA-CIA-Part1 Practice Questions 2026 - Page 3

Which of the following most accurately describes corporate social responsibility at an organization?

A. An organizational locus on improving the overall environment, even it is to the detriment of the local community.

B. A philosophy driven by employees that flows up to senior management and the board of directors.

C. An overall commitment of the organization to improve the quality of life for not only the employees but the community at large.

D. A policy of ensuring that the organization is socially responsible, even if it leads to unprofitability due to increased costs.

Senior management asks the chief audit executive to review the organization's compliance with recently introduced legislation on international transfer pricing. The review requires an internal auditor who thoroughly understands the legislation and pricing methods. The internal audit activity does not have an auditor with those skills. Which of the following is the most appropriate course of action?

A. Outsource the engagement to an external audit firm that has appropriate skills.

B. Recruit a lawyer with knowledge of the legislation to the audit team and ask the new auditor to perform the engagement.

C. Decline to perform the engagement, as the internal audit activity does not have the appropriate skill set.

D. Carry out the engagement using existing internal audit staff to help them gain the appropriate experience.

According to The IIA's Competency Framework, which competency is considered the mandatory minimum for internal auditors to possess when performing internal audit engagements?

A. To recognize red flags that indicate fraud.

B. To recommend controls to prevent fraud.

C. To apply forensic auditing techniques to detect fraud.

D. To evaluate the potential for fraud.

Which of the following fraud prevention measures is most likely to trigger undesired adverse behavior if improperly designed?

A. Disclosure of outside business activities

B. Ethics training programs

C. Compensation programs

D. Exit interviews

At what point in time can an organization conclude that the established organizational governance framework was correctly implemented?

A. When the internal auditor conducts observations and fieldwork.

B. When management completes the risk assessment.

C. When the internal auditor evaluation shows its soundness.

D. When the organization's goals and objectives are met.

The internal audit activity completed its analysis of sample transactions to determine occurrences of double billings According to If A guidance, which of the following best demonstrates that internal auditors exercised due professional care during the review?

A. Internal auditors found no instances of double billing and concluded there were no significant risks in this area.

B. Internal auditors documented the scope and methodology of the data testing.

C. Internal auditors discussed with management how data is safeguarded.

D. Internal auditors received formal performance feedback from the engagement supervisor.

Which of the following situations undermines the independence of the internal audit activity?

A. The internal audit activity is responsible for the company's risk management function, and its head manager reports to the chief audit executive.

B. A senior member of the internal audit activity once worked in the corporate finance department.

C. The organization’s CEO reviews the internal audit activity’s annual budget per the organization’s policies and procedures.

D. The internal audit activity often uses management's risk profile to build its own risk profile for annual planning.

In an assurance engagement focused on the adequacy of organizationwide risk management practices, which of the following best describes a primary area of interest for the engagement?

A. The effectiveness of process-level and transaction-level controls.

B. Conflicts of interest within the organizational structure of the senior management.

C. The alignment of management decisions with the level of risk the organization is willing to accept.

D. The actions of upper management in response to the internal audit activity's reporting

Which of the following actions should an organization take to detect an emerging risk of potential fraud?

A. Adopt reward and recognition programs that promote good behaviors

B. Undertake background checks for new employees as part of the hiring process

C. Establish an anonymous platform for reporting suspected unethical behaviors

D. Institute periodic educational training on expected ethical behaviors

Which of the following is a true statement regarding controls such as ethical values, tone at the top and operational style?

A. Transaction testing, mapping and flowcharting is applicable while testing such controls

B. Breakdowns in the these types of controls have historically led to fraudulent financial reporting

C. Such controls can be defined as inherently ob)ective and tangible elements of control

D. From an audit perspective it is significantly easier to assess ethical values than segregation of duties