Certified Internal Auditor (CIA) Part 1 | Practice Questions & Verified Answers | 2026-2027
The mandatory guidance of the IPPF consists of the The Core Principles, the Definition of Internal Auditing, the Code of Ethics, and the
following elements: Standards.
Internal audit definition An independent, objective assurance and consulting activity designed to add value
and improve an organization's operations. It helps an organization accomplish its
objectives by bringing a systematic, disciplined approach to evaluating and
improving the effectiveness of risk management, control, and governance
processes (Definition of Internal Auditing).
Functions of a code of ethical behavior: Functions of a code of ethical behavior for a professional organization include
communicating acceptable values to all members, establishing objective standards
against which individuals can measure their own performance, and communicating
the organization's values to outsider
Principles of The IIA's Code of Ethics Integrity, objectivity, confidentiality, and competency.
Know the difference between integrity, objectivity
(especially), confidentiality, and competency
T/F Final approval of the internal audit charter resides with Final approval of the internal audit charter resides with the board.
the chief audit executive.
In their reporting, internal auditors are required by The B. Disclose material facts known to the internal auditor that could distort the final
IIA's Code of Ethics to: engagement communication if not revealed.
A. Present sufficient factual information without revealing
confidential matters that could be detrimental to the
organization.
B. Disclose material facts known to the internal auditor that
could distort the final engagement communication if not
revealed.
C. Disclose all material information obtained by the auditor
as of the date of the final engagement communication.
D. Obtain factual information within the established time
and budget parameters.
The purposes of the Standards include all of the following D. Guiding the ethical conduct of internal auditors.
except:
Guiding the ethical conduct of internal auditors is the purpose of the Code of Ethics,
A. Guiding adherence to the mandatory elements of the not the Standards.
IPPF.
B. Fostering improved organizational processes and
operations.
C. Establishing the basis for the measurement of internal
audit performance.
D. Guiding the ethical conduct of internal auditors.
Which situation is most likely a violation of The IIA's Code D. Reporting apparent violations of antitrust statutes by officers to government
of Ethics? regulators.
A. Cooperating with the government's criminal An internal auditor must (1) not knowingly be a party to any illegal activity (Rule of
investigation of the organization. Conduct 1.3); (2) disclose all material facts known to him or her that, if not
B. Immediately reporting a violent crime observed at work disclosed, might distort the reporting of activities under review (Rule of Conduct
to local law enforcement agencies. 2.3); and (3) respect and contribute to the legitimate and ethical objectives of the
C. Reporting apparent violations of antitrust statutes by organization (Rule of Conduct 1.4). Thus, when apparent violations of antitrust
officers to the board of directors. statutes by officers come to the internal auditor's attention, (s)he should report to
D. Reporting apparent violations of antitrust statutes by the board of directors rather than directly to the government regulators. An internal
officers to government regulators. auditor also must observe the law and make any disclosures required by the law or
by the profession (Rule of Conduct 1.2).
,Certified Internal Auditor (CIA) Part 1 | Practice Questions & Verified Answers | 2026-2027
The chief audit executive meets with the members of the D. Explaining administrative policies and obtaining suggestions from the staff.
internal audit activity at scheduled staff meetings. Which of
the following is the most appropriate function of such a One reason for staff meetings is to explain routine administrative matters, to teach
staff meeting? new techniques, and even to let off steam. For example, staff members should be
able to raise questions about ineffective procedures, promotions, salaries, or other
A. Revising travel, promotion, and compensation policies. problems.
B. Developing the engagement work schedule.
C. Developing long-range training programs that will meet
the staff's needs.
D. Explaining administrative policies and obtaining
suggestions from the staff.
Which Standards expand upon the other categories of C. Implementation Standards
Standards?
Implementation Standards expand upon the Attribute and Performance Standards.
A. Attribute Standards. They provide requirements applicable to assurance or consulting engagements.
B. Performance Standards.
C. Implementation Standards.
D. All of the choices are correct.
The chief audit executive is aware of a material inventory C. Discuss the issue with management and take appropriate action to ensure that
shortage caused by internal control deficiencies at one the external auditors are informed.
manufacturing plant. The shortage and related causes are
of sufficient magnitude to affect the external auditor's All material facts known by the internal auditors should be disclosed (Rule of
report. Based on The IIA's Code of Ethics, what is the Conduct 2.3). The CAE should share information and coordinate activities with other
CAE's most appropriate course of action? internal and external providers of relevant assurance and consulting services (Perf.
Std. 2050).
A. Say nothing; guard against interfering with the
independence of the external auditors.
B. Communicate the shortages to the board and allow
them to communicate it to the external auditor.
C. Discuss the issue with management and take
appropriate action to ensure that the external auditors are
informed.
D. Inform the external auditors of the possibility of a
shortage but allow them to make an independent
assessment of the amount.
Under The IIA's Code of Ethics, an entity that provides C. Comply with the International Standards for the Professional Practice of Internal
internal auditing services is specifically required to Auditing.
A. Comply with organizational policy. The IIA's Code of Ethics applies not only to individuals but also to entities that
provide internal auditing services. Rule of Conduct 4.2 under the competency
B. Maintain certain predetermined staffing requirements for principle states, "Internal auditors shall perform internal audit services in
engagements. accordance with the International Standards for the Professional Practice of Internal
Auditing."
C. Comply with the International Standards for the
Professional Practice of Internal Auditing.
D. Participate in a formal continuing education program.
,Certified Internal Auditor (CIA) Part 1 | Practice Questions & Verified Answers | 2026-2027
A professional engineer applied for a position in the D. May hire the engineer despite the lack of knowledge of internal audit standards.
internal audit activity of a high technology firm. The
engineer became interested in the position after observing Each member of the internal audit activity need not be qualified in all disciplines.
several internal auditors while they were performing an
engagement in the engineering department. The chief
audit executive
A. May hire the engineer because of the knowledge of
internal auditing gained in the previous position.
B. Should not hire the engineer because of the lack of
knowledge of accounting and taxes.
C. Should not hire the engineer because of the lack of
knowledge of internal audit standards.
D. May hire the engineer despite the lack of knowledge of
internal audit standards.
The reporting structure that is most likely to allow the D. Chief executive officer and functionally to the board of directors.
internal audit activity to accomplish its responsibilities is to
report administratively to the Reporting functionally to the board and administratively to the organization's CEO
facilitates organizational independence.
A. Chief executive officer and functionally to the external
auditor.
B. Board and functionally to the chief executive officer.
C. Controller and functionally to the chief financial officer.
D. Chief executive officer and functionally to the board of
directors.
Independence permits internal auditors to render impartial A. A dual-reporting relationship.
and unbiased judgments. The best way to achieve
independence is through Independence is the freedom from conditions that threaten the ability of the internal
audit activity to carry out internal audit responsibilities in an unbiased manner. To
A. A dual-reporting relationship. achieve the degree of independence necessary to effectively carry out the
responsibilities of the internal audit activity, the CAE has direct and unrestricted
B. Supervision within the organization. access to senior management and the board. This can be achieved through a dual-
reporting relationship (Inter. Std. 1100).
C. Organizational knowledge and skills.
D. Individual knowledge and skills.
The internal auditors must be able to distinguish carefully B. The board reviews the engagement work schedule for the year and deletes an
between a scope limitation and other limitations. Which of engagement that the chief audit executive thought was important to conduct.
the following is not considered a scope limitation?
The board's decision to delete an engagement from the annual engagement work
A. The engagement client has indicated that certain schedule is not a scope limitation. The board's approval of the internal audit plan is
customers cannot be contacted because the organization part of the functional reporting relationship of the internal audit activity to the board.
is in the process of negotiating a long-term contract with
the customers and they do not want to upset the
customers.
B. The board reviews the engagement work schedule for
the year and deletes an engagement that the chief audit
executive thought was important to conduct.
C. The divisional management of an engagement client
has indicated that the division is in the process of
converting a major computer system and has indicated
that the information systems portion of the planned
engagement will have to be postponed until next year.
D. None of the answers are correct.
, Certified Internal Auditor (CIA) Part 1 | Practice Questions & Verified Answers | 2026-2027
As a part of a quality program, internal assessment teams D. Measures of project budgets and audit plan completion.
most likely will examine which of the following to evaluate
the quality of engagement planning and documentation for Internal assessments must include ongoing monitoring of the performance of the
individual engagements? internal audit activity and periodic self-assessments or assessments by other
persons within the organization with sufficient knowledge of internal auditing
A. The long-range engagement work schedule. practices (Attr. Std. 1311). The processes and tools used in ongoing internal
assessments include, among other things, measures of project budgets,
B. Project assignment documentation. timekeeping systems, and audit plan completion. These may help to determine
whether the appropriate amount of time was spent on all parts of the engagement
C. Weekly status reports. (IG 1311).
D. Measures of project budgets and audit plan completion.
A quality assurance and improvement program of an A. 1, 3, and 4 only.
internal audit activity provides reasonable assurance that
internal auditing work is performed in accordance with its A quality assurance and improvement program (QAIP) is designed to provide
charter. Which of the following are designed to provide reasonable assurance that the internal audit activity conforms with the Standards
feedback on the effectiveness of an internal audit activity? and the Code of Ethics. QAIP processes include appropriate supervision, periodic
Proper supervision internal assessments and ongoing monitoring of quality assurance, and periodic
Proper training external assessments.
Internal reviews
External reviews
A. 1, 3, and 4 only.
B. 1, 2, 3, and 4.
C. 1, 2, and 3 only.
D. 2, 3, and 4 only.
When is initial use of the conformance phrase by internal B. After an external review completed within the past 5 years.
auditors appropriate?
The chief audit executive may state that the internal audit activity conforms with the
A. After an internal review completed within the past 10 International Standards for the Professional Practice of Internal Auditing only if the
years. results of the quality assurance and improvement program support this statement
(Attr. Std. 1321). The internal audit activity conforms with mandatory guidance when
B. After an external review completed within the past 5 it achieves the outcomes described in the Code of Ethics and the Standards. The
years. results of the quality assurance and improvement program include the results of
both internal and external assessments. All internal audit activities will have the
C. After an external review completed within the past 10 results of internal assessments. Internal audit activities in existence for at least 5
years. years will also have the results of external assessments (Inter. Std. 1321; Attr. Std.
1312). Thus, to use the phrase, the chief audit executive of an internal audit activity
D. After an internal review completed within the past 5 in existence for at least 5 years must have the results of an external assessment
years. within that period.
The mandatory guidance of the IPPF consists of the The Core Principles, the Definition of Internal Auditing, the Code of Ethics, and the
following elements: Standards.
Internal audit definition An independent, objective assurance and consulting activity designed to add value
and improve an organization's operations. It helps an organization accomplish its
objectives by bringing a systematic, disciplined approach to evaluating and
improving the effectiveness of risk management, control, and governance
processes (Definition of Internal Auditing).
Functions of a code of ethical behavior: Functions of a code of ethical behavior for a professional organization include
communicating acceptable values to all members, establishing objective standards
against which individuals can measure their own performance, and communicating
the organization's values to outsider
Principles of The IIA's Code of Ethics Integrity, objectivity, confidentiality, and competency.
Know the difference between integrity, objectivity
(especially), confidentiality, and competency
T/F Final approval of the internal audit charter resides with Final approval of the internal audit charter resides with the board.
the chief audit executive.
In their reporting, internal auditors are required by The B. Disclose material facts known to the internal auditor that could distort the final
IIA's Code of Ethics to: engagement communication if not revealed.
A. Present sufficient factual information without revealing
confidential matters that could be detrimental to the
organization.
B. Disclose material facts known to the internal auditor that
could distort the final engagement communication if not
revealed.
C. Disclose all material information obtained by the auditor
as of the date of the final engagement communication.
D. Obtain factual information within the established time
and budget parameters.
The purposes of the Standards include all of the following D. Guiding the ethical conduct of internal auditors.
except:
Guiding the ethical conduct of internal auditors is the purpose of the Code of Ethics,
A. Guiding adherence to the mandatory elements of the not the Standards.
IPPF.
B. Fostering improved organizational processes and
operations.
C. Establishing the basis for the measurement of internal
audit performance.
D. Guiding the ethical conduct of internal auditors.
Which situation is most likely a violation of The IIA's Code D. Reporting apparent violations of antitrust statutes by officers to government
of Ethics? regulators.
A. Cooperating with the government's criminal An internal auditor must (1) not knowingly be a party to any illegal activity (Rule of
investigation of the organization. Conduct 1.3); (2) disclose all material facts known to him or her that, if not
B. Immediately reporting a violent crime observed at work disclosed, might distort the reporting of activities under review (Rule of Conduct
to local law enforcement agencies. 2.3); and (3) respect and contribute to the legitimate and ethical objectives of the
C. Reporting apparent violations of antitrust statutes by organization (Rule of Conduct 1.4). Thus, when apparent violations of antitrust
officers to the board of directors. statutes by officers come to the internal auditor's attention, (s)he should report to
D. Reporting apparent violations of antitrust statutes by the board of directors rather than directly to the government regulators. An internal
officers to government regulators. auditor also must observe the law and make any disclosures required by the law or
by the profession (Rule of Conduct 1.2).
,Certified Internal Auditor (CIA) Part 1 | Practice Questions & Verified Answers | 2026-2027
The chief audit executive meets with the members of the D. Explaining administrative policies and obtaining suggestions from the staff.
internal audit activity at scheduled staff meetings. Which of
the following is the most appropriate function of such a One reason for staff meetings is to explain routine administrative matters, to teach
staff meeting? new techniques, and even to let off steam. For example, staff members should be
able to raise questions about ineffective procedures, promotions, salaries, or other
A. Revising travel, promotion, and compensation policies. problems.
B. Developing the engagement work schedule.
C. Developing long-range training programs that will meet
the staff's needs.
D. Explaining administrative policies and obtaining
suggestions from the staff.
Which Standards expand upon the other categories of C. Implementation Standards
Standards?
Implementation Standards expand upon the Attribute and Performance Standards.
A. Attribute Standards. They provide requirements applicable to assurance or consulting engagements.
B. Performance Standards.
C. Implementation Standards.
D. All of the choices are correct.
The chief audit executive is aware of a material inventory C. Discuss the issue with management and take appropriate action to ensure that
shortage caused by internal control deficiencies at one the external auditors are informed.
manufacturing plant. The shortage and related causes are
of sufficient magnitude to affect the external auditor's All material facts known by the internal auditors should be disclosed (Rule of
report. Based on The IIA's Code of Ethics, what is the Conduct 2.3). The CAE should share information and coordinate activities with other
CAE's most appropriate course of action? internal and external providers of relevant assurance and consulting services (Perf.
Std. 2050).
A. Say nothing; guard against interfering with the
independence of the external auditors.
B. Communicate the shortages to the board and allow
them to communicate it to the external auditor.
C. Discuss the issue with management and take
appropriate action to ensure that the external auditors are
informed.
D. Inform the external auditors of the possibility of a
shortage but allow them to make an independent
assessment of the amount.
Under The IIA's Code of Ethics, an entity that provides C. Comply with the International Standards for the Professional Practice of Internal
internal auditing services is specifically required to Auditing.
A. Comply with organizational policy. The IIA's Code of Ethics applies not only to individuals but also to entities that
provide internal auditing services. Rule of Conduct 4.2 under the competency
B. Maintain certain predetermined staffing requirements for principle states, "Internal auditors shall perform internal audit services in
engagements. accordance with the International Standards for the Professional Practice of Internal
Auditing."
C. Comply with the International Standards for the
Professional Practice of Internal Auditing.
D. Participate in a formal continuing education program.
,Certified Internal Auditor (CIA) Part 1 | Practice Questions & Verified Answers | 2026-2027
A professional engineer applied for a position in the D. May hire the engineer despite the lack of knowledge of internal audit standards.
internal audit activity of a high technology firm. The
engineer became interested in the position after observing Each member of the internal audit activity need not be qualified in all disciplines.
several internal auditors while they were performing an
engagement in the engineering department. The chief
audit executive
A. May hire the engineer because of the knowledge of
internal auditing gained in the previous position.
B. Should not hire the engineer because of the lack of
knowledge of accounting and taxes.
C. Should not hire the engineer because of the lack of
knowledge of internal audit standards.
D. May hire the engineer despite the lack of knowledge of
internal audit standards.
The reporting structure that is most likely to allow the D. Chief executive officer and functionally to the board of directors.
internal audit activity to accomplish its responsibilities is to
report administratively to the Reporting functionally to the board and administratively to the organization's CEO
facilitates organizational independence.
A. Chief executive officer and functionally to the external
auditor.
B. Board and functionally to the chief executive officer.
C. Controller and functionally to the chief financial officer.
D. Chief executive officer and functionally to the board of
directors.
Independence permits internal auditors to render impartial A. A dual-reporting relationship.
and unbiased judgments. The best way to achieve
independence is through Independence is the freedom from conditions that threaten the ability of the internal
audit activity to carry out internal audit responsibilities in an unbiased manner. To
A. A dual-reporting relationship. achieve the degree of independence necessary to effectively carry out the
responsibilities of the internal audit activity, the CAE has direct and unrestricted
B. Supervision within the organization. access to senior management and the board. This can be achieved through a dual-
reporting relationship (Inter. Std. 1100).
C. Organizational knowledge and skills.
D. Individual knowledge and skills.
The internal auditors must be able to distinguish carefully B. The board reviews the engagement work schedule for the year and deletes an
between a scope limitation and other limitations. Which of engagement that the chief audit executive thought was important to conduct.
the following is not considered a scope limitation?
The board's decision to delete an engagement from the annual engagement work
A. The engagement client has indicated that certain schedule is not a scope limitation. The board's approval of the internal audit plan is
customers cannot be contacted because the organization part of the functional reporting relationship of the internal audit activity to the board.
is in the process of negotiating a long-term contract with
the customers and they do not want to upset the
customers.
B. The board reviews the engagement work schedule for
the year and deletes an engagement that the chief audit
executive thought was important to conduct.
C. The divisional management of an engagement client
has indicated that the division is in the process of
converting a major computer system and has indicated
that the information systems portion of the planned
engagement will have to be postponed until next year.
D. None of the answers are correct.
, Certified Internal Auditor (CIA) Part 1 | Practice Questions & Verified Answers | 2026-2027
As a part of a quality program, internal assessment teams D. Measures of project budgets and audit plan completion.
most likely will examine which of the following to evaluate
the quality of engagement planning and documentation for Internal assessments must include ongoing monitoring of the performance of the
individual engagements? internal audit activity and periodic self-assessments or assessments by other
persons within the organization with sufficient knowledge of internal auditing
A. The long-range engagement work schedule. practices (Attr. Std. 1311). The processes and tools used in ongoing internal
assessments include, among other things, measures of project budgets,
B. Project assignment documentation. timekeeping systems, and audit plan completion. These may help to determine
whether the appropriate amount of time was spent on all parts of the engagement
C. Weekly status reports. (IG 1311).
D. Measures of project budgets and audit plan completion.
A quality assurance and improvement program of an A. 1, 3, and 4 only.
internal audit activity provides reasonable assurance that
internal auditing work is performed in accordance with its A quality assurance and improvement program (QAIP) is designed to provide
charter. Which of the following are designed to provide reasonable assurance that the internal audit activity conforms with the Standards
feedback on the effectiveness of an internal audit activity? and the Code of Ethics. QAIP processes include appropriate supervision, periodic
Proper supervision internal assessments and ongoing monitoring of quality assurance, and periodic
Proper training external assessments.
Internal reviews
External reviews
A. 1, 3, and 4 only.
B. 1, 2, 3, and 4.
C. 1, 2, and 3 only.
D. 2, 3, and 4 only.
When is initial use of the conformance phrase by internal B. After an external review completed within the past 5 years.
auditors appropriate?
The chief audit executive may state that the internal audit activity conforms with the
A. After an internal review completed within the past 10 International Standards for the Professional Practice of Internal Auditing only if the
years. results of the quality assurance and improvement program support this statement
(Attr. Std. 1321). The internal audit activity conforms with mandatory guidance when
B. After an external review completed within the past 5 it achieves the outcomes described in the Code of Ethics and the Standards. The
years. results of the quality assurance and improvement program include the results of
both internal and external assessments. All internal audit activities will have the
C. After an external review completed within the past 10 results of internal assessments. Internal audit activities in existence for at least 5
years. years will also have the results of external assessments (Inter. Std. 1321; Attr. Std.
1312). Thus, to use the phrase, the chief audit executive of an internal audit activity
D. After an internal review completed within the past 5 in existence for at least 5 years must have the results of an external assessment
years. within that period.
