Certified Internal Auditor Quality Control & Assurance 3 — Questions and Answers
Question 1: An internal auditor discovers that a prior audit engagement did not test a key control that was within scope. This situation BEST represents a failure in:
- Risk assessment
- Engagement supervision (Correct answer)
- Audit committee communication
- External assessment
Correct answer: Engagement supervision
Failure to test a control within scope indicates inadequate engagement supervision, which should catch gaps in audit coverage during workpaper review.
Question 2: When a CAE states that the internal audit activity 'conforms with the International Standards for the Professional Practice of Internal Auditing,' this statement requires support from:
- The external auditor's attestation letter
- Results of the QAIP, including both internal and external assessments (Correct answer)
- Approval by the audit committee only
- A self-declaration filed with the IIA annually
Correct answer: Results of the QAIP, including both internal and external assessments
Per Standard 1321, the CAE may only make this conformance statement when supported by QAIP results that include both internal assessments and a current external assessment.
Question 3: Which of the following is a key characteristic of a qualified external assessor for a quality assessment of the internal audit activity?
- Must be a member of the same industry as the organization being assessed
- Must be independent of the organization and competent in internal audit practices (Correct answer)
- Must be approved by the external financial statement auditor
- Must hold a CPA designation in addition to CIA certification
Correct answer: Must be independent of the organization and competent in internal audit practices
Qualified external assessors must be independent of the organization and possess competency in internal auditing, including familiarity with the IIA Standards.
Question 4: A periodic self-assessment of the internal audit activity differs from ongoing monitoring in that it:
- Focuses on a specific engagement rather than the whole activity
- Provides a comprehensive evaluation of the entire internal audit function at a point in time (Correct answer)
- Is performed by an external party rather than internal staff
- Occurs continuously throughout the year
Correct answer: Provides a comprehensive evaluation of the entire internal audit function at a point in time
Periodic self-assessments are comprehensive evaluations of the entire internal audit activity conducted at defined intervals, unlike ongoing monitoring which is continuous and engagement-level.
Question 5: Which metric is MOST useful for measuring the efficiency of the internal audit activity as part of a QAIP?
- Number of audit committee meetings attended by the CAE
- Ratio of planned audit hours to actual hours incurred per engagement (Correct answer)
- Total number of recommendations issued across all engagements
- Percentage of staff holding advanced degrees
Correct answer: Ratio of planned audit hours to actual hours incurred per engagement
Comparing planned versus actual hours per engagement measures scheduling accuracy and resource efficiency, both key QAIP efficiency metrics.
Question 6: An internal audit activity that 'partially conforms' with the IIA Standards during an external assessment should PRIMARILY:
- Immediately cease all audit operations until full conformance is achieved
- Develop and implement a corrective action plan to address deficiencies (Correct answer)
- Disclose partial conformance in the annual report to shareholders
- Transfer responsibility for the QAIP to the external auditor
Correct answer: Develop and implement a corrective action plan to address deficiencies
When an activity receives a 'partially conforms' rating, the CAE should develop a corrective action plan to remediate identified deficiencies and improve conformance.
Question 7: Which of the following BEST describes the purpose of client satisfaction surveys as part of a QAIP?
- To determine whether audit fees are competitive with market rates
- To gather feedback on audit service quality and usefulness from auditees and stakeholders (Correct answer)
- To satisfy regulatory requirements for stakeholder communication
- To evaluate the technical competency of individual auditors
Correct answer: To gather feedback on audit service quality and usefulness from auditees and stakeholders
Client satisfaction surveys capture stakeholder perceptions of audit quality, relevance, and added value, which are important QAIP effectiveness measures.
Certified Internal Auditor Quality Control & Assurance 3
An internal auditor discovers that a prior audit engagement did not test a key control that was within scope.
This situation BEST represents a failure in: