Certified Internal Auditor Research & Evidence-Based Practice 5 — Questions and Answers
Question 1: When evaluating the sufficiency of audit evidence, an auditor should consider:
- Whether the evidence was gathered by the most senior team member
- The quantity of evidence needed to support each audit conclusion (Correct answer)
- Whether management agrees with the evidence collected
- The cost of evidence relative to the audit fee
Correct answer: The quantity of evidence needed to support each audit conclusion
Sufficiency refers to the quantity of evidence needed; IIA Standards require that evidence be sufficient, meaning enough to support the auditor's conclusions.
Question 2: A root cause analysis tool that visually maps contributing causes into categories such as people, process, and technology is known as a:
- Scatter diagram
- Fishbone (Ishikawa) diagram (Correct answer)
- Pareto chart
- Box-and-whisker plot
Correct answer: Fishbone (Ishikawa) diagram
The fishbone (Ishikawa or cause-and-effect) diagram organizes potential root causes into categories to help auditors identify the underlying source of a problem.
Question 3: An auditor conducting evidence-based practice must document working papers that are PRIMARILY intended to:
- Demonstrate the hours spent on each audit task
- Support the audit conclusions and enable review and quality assurance (Correct answer)
- Provide a template for future audits in the same area
- Satisfy external audit firm billing requirements
Correct answer: Support the audit conclusions and enable review and quality assurance
Working papers must support conclusions reached and allow supervisors and quality reviewers to assess whether evidence is sufficient and appropriate.
Question 4: Which approach is MOST aligned with evidence-based practice when an auditor disagrees with management's risk assessment?
- Accept management's view to maintain the relationship
- Document the disagreement and support the auditor's position with objective evidence (Correct answer)
- Escalate immediately to the audit committee without further discussion
- Remove the finding from the report to avoid conflict
Correct answer: Document the disagreement and support the auditor's position with objective evidence
Evidence-based practice requires that audit conclusions be supported by objective evidence; disagreements with management should be documented with supporting evidence.
Question 5: In a qualitative audit study, 'saturation' refers to the point at which:
- The audit budget has been fully expended
- Additional data collection no longer produces new themes or insights (Correct answer)
- All employees in the organization have been interviewed
- The auditor has reviewed 100% of the transaction population
Correct answer: Additional data collection no longer produces new themes or insights
Data saturation in qualitative research occurs when additional data gathering yields no new themes, indicating sufficient depth of understanding has been achieved.
Question 6: Which of the following scenarios represents an inappropriate use of research evidence in internal auditing?
- Citing IIA Standards to support a recommendation
- Selecting only studies that confirm a predetermined audit conclusion (Correct answer)
- Using industry loss data to calibrate fraud risk ratings
- Referencing prior audit findings to assess repeat risk
Correct answer: Selecting only studies that confirm a predetermined audit conclusion
Selectively citing only evidence that supports a pre-existing conclusion is confirmation bias and violates the objectivity principles of evidence-based practice.
Question 7: An auditor uses process mining software to analyze event logs from an ERP system. The PRIMARY research advantage of this approach is:
- It eliminates the need for auditor professional judgment
- It provides an objective, data-driven reconstruction of actual process flows (Correct answer)
- It guarantees detection of all control exceptions
- It replaces the need for any manual testing procedures
Correct answer: It provides an objective, data-driven reconstruction of actual process flows
Process mining reconstructs actual process flows from system event logs, providing objective evidence of how processes were executed versus how they were designed.
Certified Internal Auditor Research & Evidence-Based Practice 5
When evaluating the sufficiency of audit evidence, an auditor should consider: