CIA Ethics & Professional Standards 4 — Questions and Answers
Question 1: How often must an external quality assessment of the internal audit function be performed?
- Every year
- At least once every three years
- At least once every five years (Correct answer)
- Only when the board requests it
Correct answer: At least once every five years
External quality assessments must be performed at least once every five years by a qualified, independent assessor or team.
Question 2: Internal audit may state that its engagements are conducted in conformance with the IIA Standards only when:
- The CAE personally believes the function conforms
- Results of the quality assurance and improvement program support that statement (Correct answer)
- Management approves the wording
- The external auditor has issued an unqualified opinion
Correct answer: Results of the quality assurance and improvement program support that statement
Conformance claims must be supported by the results of the quality assurance and improvement program, including external assessments.
Question 3: A nonconformance with the Standards affects the overall scope or operation of the internal audit function. The CAE should:
- Disclose the nonconformance and its impact to senior management and the board (Correct answer)
- Correct it silently in the next year
- Disclose it only to the external auditor
- Remove the conformance statement without explanation
Correct answer: Disclose the nonconformance and its impact to senior management and the board
Nonconformance that impacts the function's overall scope or operation must be disclosed to senior management and the board.
Question 4: When planning an engagement, which consideration best reflects due professional care?
- Testing every transaction regardless of cost
- Weighing the relative complexity, materiality, and cost of assurance against potential benefits (Correct answer)
- Using only the procedures from last year's program
- Limiting work to areas management suggests
Correct answer: Weighing the relative complexity, materiality, and cost of assurance against potential benefits
Due professional care includes considering the extent of work, complexity, materiality, and cost relative to benefits.
Question 5: A third party requests internal audit workpapers. Who should normally approve releasing them outside the organization?
- Any staff auditor who worked on the engagement
- The CAE, after obtaining approval from senior management and/or legal counsel as appropriate (Correct answer)
- The auditee manager
- No approval is needed for completed engagements
Correct answer: The CAE, after obtaining approval from senior management and/or legal counsel as appropriate
Releasing engagement records to external parties requires CAE control with senior management or legal approval as appropriate.
Question 6: An internal auditor is pressured by a senior executive to soften a finding about weak controls in the executive's division. Which principle requires the auditor to resist?
- Competency
- Objectivity (Correct answer)
- Confidentiality
- Efficiency
Correct answer: Objectivity
Objectivity requires unbiased judgment and not letting others' influence subordinate the auditor's judgment.
Question 7: Which situation is the clearest example of an impairment to individual objectivity?
- An auditor reviewing a department in which their spouse holds a key control role (Correct answer)
- An auditor who has strong analytical skills
- An auditor who completed CPE in the audited area
- An auditor who has audited the area once before
Correct answer: An auditor reviewing a department in which their spouse holds a key control role
Close personal relationships with people responsible for the audited activity create a conflict of interest that impairs objectivity.
