CIA Client Relations 5

Question 1

Which stakeholder is the internal audit activity's PRIMARY reporting relationship for functional purposes?

Accepted Answer

The board or audit committee

Answer

The CAE reports functionally to the board to support independence and administratively to senior management.

Question 2

When an engagement client requests a quick informal review of a new system right before go-live, the internal auditor should:

Accepted Answer

Treat it as a consulting engagement, clarify scope and limitations, and document the agreement

Answer

Informal advisory work should still have an agreed understanding and appropriate documentation.

Question 3

During an engagement, the auditor discovers indicators of fraud involving the auditee's supervisor. The auditor should:

Accepted Answer

Communicate the matter to appropriate authorities per the organization's policies, such as the CAE and legal

Answer

Fraud indicators must be escalated through proper channels, not discussed with potentially involved parties.

Question 4

Which practice helps internal audit understand stakeholder expectations when developing the annual audit plan?

Accepted Answer

Soliciting input from senior management and the board

Answer

Risk-based planning considers input from senior management and the board.

Question 5

An auditee responds to a recommendation by proposing an alternative corrective action. The internal auditor should:

Accepted Answer

Evaluate whether the alternative adequately addresses the underlying risk

Answer

Management may choose different actions as long as the risk is adequately mitigated.

CIA - Certified Internal Accountant Practice Test