IIA CIA PART 2 |ACTUAL QUESTIONS AND
VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
What is the most accurate term for the procedures used by the board to oversee activities
performed to achieve organizational objectives?
A. Governance.
B. Control.
C. Risk management.
D. Monitoring.
CORRECT ANSWER
A. Governance.
Question 2
Which of the following potentially is (are) subject to the internal auditors' evaluations?
1. The human resources function.
2. The purchasing process.
3. The manufacturing and production database system.
A. 1 only.
B. 2 only.
C. 1, 2, and 3.
D. None of the answers are correct.
CORRECT ANSWER
C. 1, 2, and 3.
1
,Question 3
After using the same public accounting firm for several years, the board of directors
retained another public accounting firm to perform the annual financial audit in order to
reduce the annual audit fee. The new firm has now proposed a one-time engagement
relating to the cost-effectiveness of the various operations of the business. The chief audit
executive has been asked to advise management in making a decision on the proposal. An
argument can be made that the internal audit activity is better able to perform such an
engagement because
A. External auditors may not possess the same depth of understanding of the organization as
the internal auditors.
B. Internal auditors are required to be objective in performing engagements.
C. Engagement procedures used by internal auditors are different from those used by
external auditors.
D. Internal auditors will not be vitally concerned with fraud and waste.
CORRECT ANSWER
A. External auditors may not possess the same depth of understanding of the
organization as the internal auditors.
Question 4
Controls should be designed to provide reasonable assurance that
A. Organizational objectives will be achieved economically and efficiently.
B. Management's plans have not been circumvented by worker collusion.
C. The internal audit activity's guidance and oversight of management's performance is
accomplished economically and efficiently.
D. Management's planning, organizing, and directing processes are properly evaluated.
CORRECT ANSWER
A. Organizational objectives will be achieved economically and efficiently.
2
,Question 5
When are governance, risk management, and control processes considered adequate?
A. When management has planned and designed them to provide reasonable assurance of
achieving the organization's objectives efficiently and economically.
B. When management has planned and designed them to provide absolute assurance of
achieving the organization's objectives efficiently and economically.
C. When the internal audit activity has planned and designed them to provide reasonable
assurance of achieving the organization's objectives efficiently and economically.
D. When the company is profitable.
CORRECT ANSWER
A. When management has planned and designed them to provide reasonable assurance
of achieving the organization's objectives efficiently and economically.
Question 6
Which of the following is most essential for guiding the internal audit staff?
A. Quality program assessments.
B. Position descriptions.
C. Performance appraisals.
D. Policies and procedures.
CORRECT ANSWER
D. Policies and procedures.
Question 7
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.
3
, 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.
Question 8
Policies and procedures must be established to guide the internal audit activity. Which of
the following statements is false with respect to this requirement?
A. The form and content of written policies and procedures depend on the size of the
internal audit activity.
B. All internal audit activities must have a detailed policies and procedures manual.
C. Formal administrative and technical manuals may not be needed by all internal audit
activities.
D. A small internal audit activity may be managed informally through close supervision and
memoranda.
CORRECT ANSWER
B. All internal audit activities must have a detailed policies and procedures manual.
Question 9
The chief audit executive for a large decentralized organization has developed a manual
containing comprehensive detailed written procedures as a guide for the decentralized
engagement work groups, each of which has 20 to 30 internal auditors. The organization
recently acquired a small organization that has an internal audit activity consisting of a
supervisor and two staff personnel. Which of the following actions is the most practical in
providing administrative guidance for this new internal audit activity?
A. Select key procedures from the manual and use informal supervisory direction for other
engagement management issues.
B. Use informal supervisory direction for engagement management issues.
C. Use the already developed manual.
4
VERIFIED ANSWERS|BRAND NEW 2026-2027
UPDATE|GRADED A+
Question 1
What is the most accurate term for the procedures used by the board to oversee activities
performed to achieve organizational objectives?
A. Governance.
B. Control.
C. Risk management.
D. Monitoring.
CORRECT ANSWER
A. Governance.
Question 2
Which of the following potentially is (are) subject to the internal auditors' evaluations?
1. The human resources function.
2. The purchasing process.
3. The manufacturing and production database system.
A. 1 only.
B. 2 only.
C. 1, 2, and 3.
D. None of the answers are correct.
CORRECT ANSWER
C. 1, 2, and 3.
1
,Question 3
After using the same public accounting firm for several years, the board of directors
retained another public accounting firm to perform the annual financial audit in order to
reduce the annual audit fee. The new firm has now proposed a one-time engagement
relating to the cost-effectiveness of the various operations of the business. The chief audit
executive has been asked to advise management in making a decision on the proposal. An
argument can be made that the internal audit activity is better able to perform such an
engagement because
A. External auditors may not possess the same depth of understanding of the organization as
the internal auditors.
B. Internal auditors are required to be objective in performing engagements.
C. Engagement procedures used by internal auditors are different from those used by
external auditors.
D. Internal auditors will not be vitally concerned with fraud and waste.
CORRECT ANSWER
A. External auditors may not possess the same depth of understanding of the
organization as the internal auditors.
Question 4
Controls should be designed to provide reasonable assurance that
A. Organizational objectives will be achieved economically and efficiently.
B. Management's plans have not been circumvented by worker collusion.
C. The internal audit activity's guidance and oversight of management's performance is
accomplished economically and efficiently.
D. Management's planning, organizing, and directing processes are properly evaluated.
CORRECT ANSWER
A. Organizational objectives will be achieved economically and efficiently.
2
,Question 5
When are governance, risk management, and control processes considered adequate?
A. When management has planned and designed them to provide reasonable assurance of
achieving the organization's objectives efficiently and economically.
B. When management has planned and designed them to provide absolute assurance of
achieving the organization's objectives efficiently and economically.
C. When the internal audit activity has planned and designed them to provide reasonable
assurance of achieving the organization's objectives efficiently and economically.
D. When the company is profitable.
CORRECT ANSWER
A. When management has planned and designed them to provide reasonable assurance
of achieving the organization's objectives efficiently and economically.
Question 6
Which of the following is most essential for guiding the internal audit staff?
A. Quality program assessments.
B. Position descriptions.
C. Performance appraisals.
D. Policies and procedures.
CORRECT ANSWER
D. Policies and procedures.
Question 7
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.
3
, 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.
Question 8
Policies and procedures must be established to guide the internal audit activity. Which of
the following statements is false with respect to this requirement?
A. The form and content of written policies and procedures depend on the size of the
internal audit activity.
B. All internal audit activities must have a detailed policies and procedures manual.
C. Formal administrative and technical manuals may not be needed by all internal audit
activities.
D. A small internal audit activity may be managed informally through close supervision and
memoranda.
CORRECT ANSWER
B. All internal audit activities must have a detailed policies and procedures manual.
Question 9
The chief audit executive for a large decentralized organization has developed a manual
containing comprehensive detailed written procedures as a guide for the decentralized
engagement work groups, each of which has 20 to 30 internal auditors. The organization
recently acquired a small organization that has an internal audit activity consisting of a
supervisor and two staff personnel. Which of the following actions is the most practical in
providing administrative guidance for this new internal audit activity?
A. Select key procedures from the manual and use informal supervisory direction for other
engagement management issues.
B. Use informal supervisory direction for engagement management issues.
C. Use the already developed manual.
4
