Ethics & Professional Standards Flashcards
7 cards from real CIA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Ethics & Professional Standards flashcards as text
Which principle is violated when an internal auditor knowingly takes part in an illegal activity to protect their employer?
Answer: Integrity
Integrity prohibits knowingly being party to illegal activity or acts that discredit the profession or organization.
An internal auditor's annual bonus depends on the profitability of the business units she audits. What is the main concern?
Answer: It may create a conflict of interest that threatens objectivity
Pay tied to the results of audited units can bias judgment and threaten objectivity.
The CAE is also given responsibility for overseeing the compliance function. What is the appropriate safeguard?
Answer: Establish safeguards, such as having compliance assurance done by an independent party, and disclose to the board
When the CAE has roles beyond internal audit, safeguards must limit impairments, and assurance on those areas should be overseen by an independent party.
Which item should the internal audit charter define to support independence?
Answer: Internal audit's position in the organization, including the CAE's functional reporting to the board, and access to records, personnel, and properties
The charter sets internal audit's organizational position, reporting relationships, authority, and access rights.
An internal auditor who discovers indicators of fraud during an engagement should first:
Answer: Inform the appropriate authorities in the organization according to established procedures
Fraud indicators should be reported through established channels so that an investigation can be properly authorized.
An internal auditor posts general details about a recent engagement on social media, including the name of the auditee department. This most directly conflicts with:
Answer: Confidentiality
Confidentiality requires being careful with information acquired in the course of duties and not disclosing it without authority.
Which statement about the board's role in internal audit independence is correct?
Answer: The board should approve the internal audit charter and the decisions to appoint and remove the CAE
Board approval of the charter and of CAE appointment and removal protects internal audit's independence.