CIA Exam Prep
CIA EXAM PREP NEWEST 2026/2027 ACTUAL EXAM COMPLETE
200 QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+||BRAND NEW VERSION!!
During the course of an engagement, an internal auditor discovers that a clerk is
embezzling funds from the organization. Although this is the first embezzlement
ever encountered and the organization has a security department, the internal
auditor decides to interrogate the suspect. If the internal auditor is violating The
IIA's Code of Ethics, the rule violated is most likely
A. Failing to exercise due diligence.
B. Lack of loyalty to the organization.
C. Lack of competence in this area.
D. Failing to comply with the law. - Correct Answer-C
Internal auditors who fail to maintain their proficiency through continuing
education could be found to be in violation of
A. The International Standards for the Professional Practice of Internal Auditing.
B. The IIA's Code of Ethics.
C. Both the International Standards for the Professional Practice of Internal
Auditing and The IIA's Code of Ethics.
D. None of the answers are correct. - Correct Answer-C.
A new staff internal auditor was told to perform an engagement in an area with
which the internal auditor was not familiar. Because of time constraints, no
supervision was provided. The assignment represented a good learning
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experience, but the area was clearly beyond the internal auditor's competence.
Nonetheless, the internal auditor prepared comprehensive working papers and
communicated the results to management. In this situation,
A. The internal audit activity violated the Standards by hiring an internal auditor
without proficiency in the area.
B. The internal audit activity violated the Standards by not providing adequate
supervision.
C. The CAE has not violated The IIA's Code of Ethics because it does not address
supervision.
D. The Standards and The IIA's Code of Ethics were followed by the internal audit
activity. - Correct Answer-B
During an engagement to evaluate the organization's accounts payable function,
an internal auditor plans to confirm balances with suppliers. What is the source of
authority for such contacts with units outside the organization?
A. Internal audit activity policies and procedures.
B. The Standards.
C. The Code of Ethics.
D. The internal audit activity's charter. - Correct Answer-D.
The board of an organization has charged the CAE with upgrading the internal
audit activity. The CAE's first task is to develop a charter. What item should be
included in the statement of objectives?
A. Report all engagement results to the board every quarter.
B. Notify governmental regulatory agencies of unethical business practices by
organization management.
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C. Evaluate the adequacy and effectiveness of the organization's controls.
D. Submit budget variance reports to management every month. - Correct
Answer-C
The authority of the internal audit activity is limited to that granted by
A. The board and the controller.
B. Senior management and the Standards.
C. Management and the board.
D. The board and the chief financial officer. - Correct Answer-C
Internal auditing has planned an engagement to evaluate the effectiveness of the
quality assurance function as it affects the receipt of goods, the transfer of the
goods into production, and the scrap costs related to defective items. The
engagement client argues that such an engagement is not within the scope of the
internal audit activity and should come under the purview of the quality
assurance department only. What is the most appropriate response?
A. Refer to the internal audit activity's charter and the approved engagement plan
that includes the area designated for evaluation in the current time period.
B. Because quality assurance is a new function, seek the approval of management
as a mediator to set the scope of the engagement.
C. Indicate that the engagement will evaluate the function only in accordance with
the standards set by, and approved by, the quality assurance function before
beginning the engageme - Correct Answer-A.
The reporting structure that is most likely to allow the internal audit activity to
accomplish its responsibilities is to report administratively to the
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A. Board and functionally to the chief executive officer.
B. Controller and functionally to the chief financial officer.
C. Chief executive officer and functionally to the board of directors.
D. Chief executive officer and functionally to the external auditor. - Correct
Answer-
Which of the following facts, by themselves, could contribute to a lack of
independence of the internal audit activity?
I. the CEO accused the new auditor of not operating "in the bests interest of the
organization."
II. the majority of audit committee members come from within the organization.
III. the internal audit activity's charter has not been approved by the board.
A. I only.
B. II only.
C. II and III only.
D. I, II, and III. - Correct Answer-D
To avoid being the apparent cause of conflict between an organization's senior
management and the board, the CAE should
A. Communicate all engagement results to both senior management and the
board.
B. Strengthen the independence of the internal Audit activity through
organizational position.
C. Discuss all reports to senior management with the board first.
4|Page
CIA EXAM PREP NEWEST 2026/2027 ACTUAL EXAM COMPLETE
200 QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+||BRAND NEW VERSION!!
During the course of an engagement, an internal auditor discovers that a clerk is
embezzling funds from the organization. Although this is the first embezzlement
ever encountered and the organization has a security department, the internal
auditor decides to interrogate the suspect. If the internal auditor is violating The
IIA's Code of Ethics, the rule violated is most likely
A. Failing to exercise due diligence.
B. Lack of loyalty to the organization.
C. Lack of competence in this area.
D. Failing to comply with the law. - Correct Answer-C
Internal auditors who fail to maintain their proficiency through continuing
education could be found to be in violation of
A. The International Standards for the Professional Practice of Internal Auditing.
B. The IIA's Code of Ethics.
C. Both the International Standards for the Professional Practice of Internal
Auditing and The IIA's Code of Ethics.
D. None of the answers are correct. - Correct Answer-C.
A new staff internal auditor was told to perform an engagement in an area with
which the internal auditor was not familiar. Because of time constraints, no
supervision was provided. The assignment represented a good learning
1|Page
, CIA Exam Prep
experience, but the area was clearly beyond the internal auditor's competence.
Nonetheless, the internal auditor prepared comprehensive working papers and
communicated the results to management. In this situation,
A. The internal audit activity violated the Standards by hiring an internal auditor
without proficiency in the area.
B. The internal audit activity violated the Standards by not providing adequate
supervision.
C. The CAE has not violated The IIA's Code of Ethics because it does not address
supervision.
D. The Standards and The IIA's Code of Ethics were followed by the internal audit
activity. - Correct Answer-B
During an engagement to evaluate the organization's accounts payable function,
an internal auditor plans to confirm balances with suppliers. What is the source of
authority for such contacts with units outside the organization?
A. Internal audit activity policies and procedures.
B. The Standards.
C. The Code of Ethics.
D. The internal audit activity's charter. - Correct Answer-D.
The board of an organization has charged the CAE with upgrading the internal
audit activity. The CAE's first task is to develop a charter. What item should be
included in the statement of objectives?
A. Report all engagement results to the board every quarter.
B. Notify governmental regulatory agencies of unethical business practices by
organization management.
2|Page
, CIA Exam Prep
C. Evaluate the adequacy and effectiveness of the organization's controls.
D. Submit budget variance reports to management every month. - Correct
Answer-C
The authority of the internal audit activity is limited to that granted by
A. The board and the controller.
B. Senior management and the Standards.
C. Management and the board.
D. The board and the chief financial officer. - Correct Answer-C
Internal auditing has planned an engagement to evaluate the effectiveness of the
quality assurance function as it affects the receipt of goods, the transfer of the
goods into production, and the scrap costs related to defective items. The
engagement client argues that such an engagement is not within the scope of the
internal audit activity and should come under the purview of the quality
assurance department only. What is the most appropriate response?
A. Refer to the internal audit activity's charter and the approved engagement plan
that includes the area designated for evaluation in the current time period.
B. Because quality assurance is a new function, seek the approval of management
as a mediator to set the scope of the engagement.
C. Indicate that the engagement will evaluate the function only in accordance with
the standards set by, and approved by, the quality assurance function before
beginning the engageme - Correct Answer-A.
The reporting structure that is most likely to allow the internal audit activity to
accomplish its responsibilities is to report administratively to the
3|Page
, CIA Exam Prep
A. Board and functionally to the chief executive officer.
B. Controller and functionally to the chief financial officer.
C. Chief executive officer and functionally to the board of directors.
D. Chief executive officer and functionally to the external auditor. - Correct
Answer-
Which of the following facts, by themselves, could contribute to a lack of
independence of the internal audit activity?
I. the CEO accused the new auditor of not operating "in the bests interest of the
organization."
II. the majority of audit committee members come from within the organization.
III. the internal audit activity's charter has not been approved by the board.
A. I only.
B. II only.
C. II and III only.
D. I, II, and III. - Correct Answer-D
To avoid being the apparent cause of conflict between an organization's senior
management and the board, the CAE should
A. Communicate all engagement results to both senior management and the
board.
B. Strengthen the independence of the internal Audit activity through
organizational position.
C. Discuss all reports to senior management with the board first.
4|Page
