Certified Internal Auditor Research & Evidence-Based Practice 4 — Questions and Answers
Question 1: Which IIA document provides the authoritative definition of internal auditing and the core principles guiding the profession?
- Global Technology Audit Guide (GTAG)
- International Professional Practices Framework (IPPF) (Correct answer)
- Practice Advisory on Evidence Gathering
- Internal Audit Capability Model (IA-CM)
Correct answer: International Professional Practices Framework (IPPF)
The IPPF is the authoritative framework that includes the definition of internal auditing, Code of Ethics, Standards, and implementation guidance.
Question 2: An auditor wants to assess whether expense reimbursements follow a normal distribution. Which tool is MOST appropriate?
- Pareto chart
- Benford's Law analysis
- Histogram with normality test (Correct answer)
- Control chart with UCL/LCL
Correct answer: Histogram with normality test
A histogram visualizes the distribution shape, and paired with a statistical normality test (e.g., Shapiro-Wilk), it directly assesses whether data follows a normal distribution.
Question 3: When benchmarking audit findings against industry peers, the MOST significant limitation is:
- Benchmarks are always freely available and thus unreliable
- Peer data may not be comparable due to differences in size, structure, or risk appetite (Correct answer)
- Benchmarking is prohibited under IIA Standards
- Industry averages always understate actual performance
Correct answer: Peer data may not be comparable due to differences in size, structure, or risk appetite
Differences in organizational size, business model, risk tolerance, and reporting practices can make peer benchmarks misleading if applied without careful contextualization.
Question 4: A 'gap analysis' in the context of internal audit research is used to:
- Measure the time gap between audit fieldwork and report issuance
- Identify the difference between current practices and desired or required standards (Correct answer)
- Calculate variances in budget versus actual expenditure
- Determine the staffing shortfall in the audit department
Correct answer: Identify the difference between current practices and desired or required standards
Gap analysis compares the current state of controls or processes against a benchmark or standard to identify areas requiring improvement.
Question 5: Which of the following BEST illustrates the use of deductive reasoning in an audit?
- Observing many transactions and concluding a pattern of fraud exists
- Applying a known control standard to assess whether a specific control meets requirements (Correct answer)
- Interviewing staff to discover undocumented processes
- Reviewing historical data to generate a new risk hypothesis
Correct answer: Applying a known control standard to assess whether a specific control meets requirements
Deductive reasoning moves from a general principle (the standard) to a specific conclusion (whether this control meets it), which is a top-down logical process.
Question 6: In a survey used to gather audit evidence, which factor MOST threatens the validity of responses?
- High response rate from the target population
- Leading questions that suggest a desired answer (Correct answer)
- Using a Likert scale for attitude measurement
- Keeping the survey anonymous
Correct answer: Leading questions that suggest a desired answer
Leading questions bias respondents toward a particular answer, undermining the validity and objectivity of the data collected.
Question 7: An internal auditor reviews academic journals and professional publications before beginning a fraud risk assessment. This practice PRIMARILY supports:
- Compliance with continuing education requirements
- Development of an informed, evidence-based audit program (Correct answer)
- Reduction of the overall audit budget
- Satisfying peer review requirements
Correct answer: Development of an informed, evidence-based audit program
Reviewing current research and professional literature before fieldwork ensures the audit program is grounded in the latest knowledge about fraud schemes, red flags, and effective procedures.
Certified Internal Auditor Research & Evidence-Based Practice 4
Which IIA document provides the authoritative definition of internal auditing and the core principles guiding the profession?