Certified Internal Auditor Professional Standards & Competencies 2 — Questions and Answers
Question 1: According to the IIA Standards, which attribute standard addresses the organizational independence of the internal audit function?
- Standard 1000 – Purpose, Authority, and Responsibility
- Standard 1100 – Independence and Objectivity (Correct answer)
- Standard 1200 – Proficiency and Due Professional Care
- Standard 1300 – Quality Assurance and Improvement Program
Correct answer: Standard 1100 – Independence and Objectivity
Standard 1100 – Independence and Objectivity requires the internal audit function to be independent and auditors to be objective in performing their work.
Question 2: The IIA's Code of Ethics principle of 'integrity' primarily requires internal auditors to:
- Maintain confidentiality of information acquired during engagements
- Perform work with honesty and avoid acts that discredit the profession (Correct answer)
- Disclose all material facts known to them in reports
- Refrain from accepting gifts of any monetary value
Correct answer: Perform work with honesty and avoid acts that discredit the profession
The integrity principle requires auditors to perform work with honesty, diligence, and responsibility, and to avoid acts that discredit the profession.
Question 3: An internal auditor discovers that a close personal friend works in a department being audited. The auditor should FIRST:
- Complete the audit but document the relationship in workpapers
- Recuse themselves and disclose the conflict to the CAE (Correct answer)
- Limit their testing to areas not involving the friend
- Obtain written consent from the friend before proceeding
Correct answer: Recuse themselves and disclose the conflict to the CAE
When a personal relationship creates a potential independence impairment, the auditor must immediately disclose the conflict to the CAE for reassignment or other resolution.
Question 4: Under the IIA Standards, 'due professional care' requires internal auditors to consider which of the following during planning?
- The probability of significant errors, fraud, or noncompliance (Correct answer)
- The personal qualifications of each audit team member
- The number of prior engagements performed in the area
- The budget approved by the audit committee
Correct answer: The probability of significant errors, fraud, or noncompliance
Standard 1220 requires auditors to consider the likelihood of significant errors, irregularities, or noncompliance when applying due professional care.
Question 5: A Quality Assurance and Improvement Program (QAIP) must include which two types of assessments?
- Peer reviews and regulatory inspections
- Ongoing monitoring and periodic self-assessments or external assessments (Correct answer)
- Management surveys and board evaluations
- Benchmarking studies and client satisfaction surveys
Correct answer: Ongoing monitoring and periodic self-assessments or external assessments
Standard 1300 requires the QAIP to include ongoing internal monitoring and periodic internal and external assessments to evaluate conformance with the Standards.
Question 6: The IIA Standards require an external quality assessment of the internal audit function at least once every:
- Two years
- Three years
- Five years (Correct answer)
- Seven years
Correct answer: Five years
Standard 1312 requires external assessments to be conducted at least once every five years by a qualified, independent assessor or assessment team.
Question 7: Which statement best describes the concept of 'organizational independence' for an internal audit function?
- Each auditor must be free from any bias when performing fieldwork
- The CAE must report to a level within the organization that allows the function to fulfill its responsibilities (Correct answer)
- Auditors cannot audit any area where they previously worked
- The internal audit budget must be approved directly by external auditors
Correct answer: The CAE must report to a level within the organization that allows the function to fulfill its responsibilities
Organizational independence requires the CAE to report to a level—typically the board or audit committee—that enables the function to accomplish its mandate without management interference.
Certified Internal Auditor Professional Standards & Competencies 2
According to the IIA Standards, which attribute standard addresses the organizational independence of the internal audit function?