IIA CIA EXAM PART 2 |ACTUAL QUESTIONS AND
VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
Johnny Hagert, Chief Audit Executive, is determining the sufficiency of the resource
allocation for the internal audit activity's risk-based audit plan that establishes its
priorities. Mr. Hagert must consider all of the following except
A) Consequences of not completing the engagement on time
B) Communications received from senior management and the board
C) Knowledge of the internal audit staff
D) The audit universe
CORRECT ANSWER
D) The audit universe
- The audit plan is based on (1) the audit universe (all auditable risk areas), (2) input from
senior management and the board and (3) assessed risks. However, sufficiency relates to
the quantity of resources needed to accomplish the approved audit plan, not to the
universe of all possible audits within the organization
Question 2
A CAE has reviewed credentials, checked references, and interviewed a candidate for a
staff position. The CAE concludes that the candidate has a thorough understanding of
internal audit techniques, accounting, and finance. However, the candidate has limited
knowledge of economics and information technology. Which action is appropriate?
A) offer the candidate a position despite lack of knowledge in certain areas
1
,B) offer the candidate a position if other staff members possess sufficient knowledge in
economics and information technology
C) Encourage the candidate to obtain additional training in economics and IT and then
reapply
D) Reject the candidate because of the lack of knowledge required by the standards
CORRECT ANSWER
B) offer the candidate a position if other staff members possess sufficient knowledge in
economics and information technology
- The internal audit activity collectively must have or obtain the knowledge, skills, and
other competencies needed to perform its responsibilities. Each member of the Internal
Audit activity need not be qualified in all disciplines
Question 3
The key factor in the success of an internal audit activity's human resources program is...
A) an informal program for developing and counseling staff
B) a compensation plan based on years of experience
C) a well-developed set of selection criteria
D) a program for recognizing the special interests of individual staff members
CORRECT ANSWER
C) a well-developed set of selection criteria
- Internal auditors should be qualified and competent. Because the selection of a
superior staff is dependent on the ability to evaluate applicants, selection criteria must
be well-developed. Appropriate questions and forms should be prepared in advance to
evaluate, among other things, the applicant's technical qualifications, educational
background, personal appearance, ability to communicate, maturity, persuasiveness,
self-confidence, intelligence motivation, and potential to contribute to the organization.
2
,Question 4
Audit committees have been identified as a major factor in promoting the independence
of both internal and external auditors. Which of the following is the most important
limitation on the effectiveness of audit committees?
A) audit committee members do not normally have degrees in the accounting or auditing
fields
B) audit committee members are compensated by the organization and thus favor an
owner's view
C) audit committee may be composed of independent directors. However, those directors
may have close personal and professional friendships with management
D) audit committees devote most of their efforts to external audit concerns and do not pay
much attention to the internal audit activity and the overall control environment
CORRECT ANSWER
C) audit committee may be composed of independent directors. However, those
directors may have close personal and professional friendships with management
- The audit committee is a subcommittee made up of outside directors who are
independent of management. Its purpose is to help keep external and internal auditors
independent of management and to ensure that the directors are exercising due care.
However, if independence is impaired by personal and professional friendships, the
effectiveness of the audit committee may be limited
Question 5
Staff members of the internal audit activity should be assigned to engagements and
training projects that will enable them to develop their potential. Which of the following
should be the most important consideration in making assignments that will allow staff
members to develop properly?
A) the importance of giving all staff members extensive supervisory experience
3
, B) the skills and experience levels of internal auditors
C) special interests of individual staff members
D) specific training requirements imposed by the Standards
CORRECT ANSWER
B) the skills and experience levels of internal auditors
- The program for selecting and developing the human resources of the internal audit
activity should provide for written job descriptions for each level of the staff, selection of
qualified and competent individuals, training and continuing educational opportunities,
performance appraisals at least annually, and counsel on performance and professional
development. Obviously, work assignments inconsistent with an internal auditor's
abilities will defeat the purposes of human resources development
Question 6
Senior management has requested a compliance audit of the organization's employee
benefits package. Which of the following is considered the primary engagement objective
by both the chief audit executive and senior management?
A) Individual programs are operating in accordance with contractual requirements and
government regulations
B) the level of organizational contributions is adequate to meet the program's demands
C) benefit payments, when appropriate, are accurate and timely
D) participation levels support continuation of individual programs
CORRECT ANSWER
A) individual programs are operating in accordance with contractual requirements and
government regulations
- The IA activity evaluates risk exposures related to governance, operations, and
information systems regarding, among other things, compliance with laws, regulations,
and contracts. Based on the risk assessment, the internal audit activity evaluates the
4
VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
Johnny Hagert, Chief Audit Executive, is determining the sufficiency of the resource
allocation for the internal audit activity's risk-based audit plan that establishes its
priorities. Mr. Hagert must consider all of the following except
A) Consequences of not completing the engagement on time
B) Communications received from senior management and the board
C) Knowledge of the internal audit staff
D) The audit universe
CORRECT ANSWER
D) The audit universe
- The audit plan is based on (1) the audit universe (all auditable risk areas), (2) input from
senior management and the board and (3) assessed risks. However, sufficiency relates to
the quantity of resources needed to accomplish the approved audit plan, not to the
universe of all possible audits within the organization
Question 2
A CAE has reviewed credentials, checked references, and interviewed a candidate for a
staff position. The CAE concludes that the candidate has a thorough understanding of
internal audit techniques, accounting, and finance. However, the candidate has limited
knowledge of economics and information technology. Which action is appropriate?
A) offer the candidate a position despite lack of knowledge in certain areas
1
,B) offer the candidate a position if other staff members possess sufficient knowledge in
economics and information technology
C) Encourage the candidate to obtain additional training in economics and IT and then
reapply
D) Reject the candidate because of the lack of knowledge required by the standards
CORRECT ANSWER
B) offer the candidate a position if other staff members possess sufficient knowledge in
economics and information technology
- The internal audit activity collectively must have or obtain the knowledge, skills, and
other competencies needed to perform its responsibilities. Each member of the Internal
Audit activity need not be qualified in all disciplines
Question 3
The key factor in the success of an internal audit activity's human resources program is...
A) an informal program for developing and counseling staff
B) a compensation plan based on years of experience
C) a well-developed set of selection criteria
D) a program for recognizing the special interests of individual staff members
CORRECT ANSWER
C) a well-developed set of selection criteria
- Internal auditors should be qualified and competent. Because the selection of a
superior staff is dependent on the ability to evaluate applicants, selection criteria must
be well-developed. Appropriate questions and forms should be prepared in advance to
evaluate, among other things, the applicant's technical qualifications, educational
background, personal appearance, ability to communicate, maturity, persuasiveness,
self-confidence, intelligence motivation, and potential to contribute to the organization.
2
,Question 4
Audit committees have been identified as a major factor in promoting the independence
of both internal and external auditors. Which of the following is the most important
limitation on the effectiveness of audit committees?
A) audit committee members do not normally have degrees in the accounting or auditing
fields
B) audit committee members are compensated by the organization and thus favor an
owner's view
C) audit committee may be composed of independent directors. However, those directors
may have close personal and professional friendships with management
D) audit committees devote most of their efforts to external audit concerns and do not pay
much attention to the internal audit activity and the overall control environment
CORRECT ANSWER
C) audit committee may be composed of independent directors. However, those
directors may have close personal and professional friendships with management
- The audit committee is a subcommittee made up of outside directors who are
independent of management. Its purpose is to help keep external and internal auditors
independent of management and to ensure that the directors are exercising due care.
However, if independence is impaired by personal and professional friendships, the
effectiveness of the audit committee may be limited
Question 5
Staff members of the internal audit activity should be assigned to engagements and
training projects that will enable them to develop their potential. Which of the following
should be the most important consideration in making assignments that will allow staff
members to develop properly?
A) the importance of giving all staff members extensive supervisory experience
3
, B) the skills and experience levels of internal auditors
C) special interests of individual staff members
D) specific training requirements imposed by the Standards
CORRECT ANSWER
B) the skills and experience levels of internal auditors
- The program for selecting and developing the human resources of the internal audit
activity should provide for written job descriptions for each level of the staff, selection of
qualified and competent individuals, training and continuing educational opportunities,
performance appraisals at least annually, and counsel on performance and professional
development. Obviously, work assignments inconsistent with an internal auditor's
abilities will defeat the purposes of human resources development
Question 6
Senior management has requested a compliance audit of the organization's employee
benefits package. Which of the following is considered the primary engagement objective
by both the chief audit executive and senior management?
A) Individual programs are operating in accordance with contractual requirements and
government regulations
B) the level of organizational contributions is adequate to meet the program's demands
C) benefit payments, when appropriate, are accurate and timely
D) participation levels support continuation of individual programs
CORRECT ANSWER
A) individual programs are operating in accordance with contractual requirements and
government regulations
- The IA activity evaluates risk exposures related to governance, operations, and
information systems regarding, among other things, compliance with laws, regulations,
and contracts. Based on the risk assessment, the internal audit activity evaluates the
4
