Free IIA IIA-CIA-Part1 Practice Questions 2026 - Page 9

Which of the following statements is true regarding reporting results of the quality assurance and improvement program to senior management and the board?

A. Internal assessments must be reported to the board at least every five years

B. If supported by assessment results, reporting provides assurance that internal auditors demonstrate conformance with the Code of Ethics

C. Following the reporting the board must give the internal audit activity five years to correct any deviations

D. A report, including the results of both internal and external assessments must be provided to the board annually

The accounting department asked the chief audit executive (CAE) to perform a review of suspicious transactions The CAE was an accounting manager for the organization six months ago How should she respond to the request?

A. Decline, if it is consulting engagement because she recently worked in the organization s accounting department

B. Accept, 11 is an assurance engagement, as she has been out of the department long enough to not impair objectivity.

C. Inform the accounting department mat me engagement can take place m the future once she has been removed from accounting for a longer period of time.

D. Accept, it is a consulting engagement with agreed-upon scope and services to be provided by me internal audit activity.

A manufacturer of power tools is experiencing regular fluctuations in the price of electrical power which is having a serious impact on the bottom line. Which of the following would be the most effective risk strategy to reduce the impact of these fluctuations?

A. Use an average cost for power to smooth the bottom line.

B. Analyze the amount of power used to produce each power tool.

C. Review the current process to identify opportunities to reduce power usage.

D. Use a forward contract for bulk power purchases

When taken by a chief audit executive, which of the following actions would be most likely to prevent division management from exaggerating sales reports?

1. Announcing a series of internal audit engagements focusing on compliance with corporate sales-reporting policies.

2. Asking the president and the board to issue a statement of corporate policy stressing the importance of accurate management reporting and the negative consequences of intentional misreporting.

3. Setting up a hotline for employees to report fraudulent behavior anonymously,

4. Assisting the controller in developing and monitoring a series of business process indicators, which are historically correlated with, but independent of sales.

A. 1 and 2 only.

B. 2 and 3 only.

C. 2 and 4 only.

D. 3 and 4 only

Wi ch of the following circumstances would most likely be considered a potential red flag for fraud by the internal audit activity?

A. The monthly payroll reports are not vetted to ensure terminated employees have been removed from the payroll system

B. The volume of nonroutine journal entries has steadily increased over time.

C. The database of approved suppliers has not been reviewed the last year

D. The recent employee survey indicates that some employees remain unaware of the organization’s whistieblower hotline.

Which of the following qualifies as an acceptable consulting service provided by the internal audit activity?

A. Develop training and system rollout plans in response to the results of the change readiness assessment of a new sales distribution model

B. Lead a risk self assessment session for laboratory managers to help identify inherent risks and provide recommendations on how to evaluate the risks

C. Audit a third party cloud service provider to review the effectiveness of governance and management controls in providing secure services to its customers

D. Conduct a post-implementation assessment of the enterprise resource planning system to determine whether project objectives were met and to identify opportunities to maximize potential benefits

Which statement is accurate regarding reporting on the quality assurance and improvement program (OAIP) to conform with the International Standards for the Professional Practice of Internal Auditing?

A. The chief audit executive (CAE) should report all stages of the OAlP's development and key milestones.

B. The CAE should report only corrective action plans that meet external assessor or stakeholder requirements.

C. The CAE should establish the form and content of program communication so that it is in alignment with the internal audit activity charter.

D. The CAE should disclose program details only after both internal and external assessments have been completed.

Which should the internal auditor first consider when assessing fraud risks during an engagement?

A. Compare the organizations fraud strategies with the industry's strategies.

B. Review any related prior fraud investigations.

C. Investigate any related fraud allegations.

D. Communicate any suspicious fraud activities to management.

Which of the following is an example of impairment to internal auditor independence or objectivity'?

A. Assurance engagements for functions over which the chief audit executive (CAE) has responsibility are overseen by a party outside the internal audit activity

B. Internal auditors provide consulting services relating to operations for which they had previous responsibilities

C. Internal auditors provide consulting services relating to operations for which they have current responsibilities

D. Consulting engagements for functions over which the CAE has responsibility are overseen by a party outside the internal audit activity

When dealing with various stakeholders which of the following is true regarding an internal auditor's responsibility to remain objective and independent?

A. When deciding between conflicting reports of a control's performance from a control operator and the operator's manager the internal auditor should generally believe the manager

B. Some audit issues may remain unremediated and unreported if management will accept recommendations that the internal auditor deems more important

C. The internal auditor may initially disagree with management s acceptance of a risk, but reevaluate and agree with management’s judgment after further discussion

D. When working on business unit audits it is sometimes sufficient for the internal auditor to report deficiencies only to the unit manager when remediation is not complex