Certified Internal Auditor (CIA) Practice
Exam 1 Questions and Answers (Verified
Answers) with Rationales 2025
1. Which of the following best describes the primary role of internal auditing?
A) To prepare financial statements
B) To provide independent assurance that an organization’s risk management,
governance, and internal control processes are operating effectively
C) To manage the company’s compliance with tax laws
D) To design the company’s IT infrastructure
Answer: B
Rationale: The primary role of internal auditing is to provide independent
assurance on risk management, governance, and internal controls. It is not
primarily involved in preparing financial statements or managing IT or tax
functions.
2. The International Professional Practices Framework (IPPF) is issued by which
organization?
A) American Institute of CPAs (AICPA)
B) Institute of Internal Auditors (IIA)
,C) Financial Accounting Standards Board (FASB)
D) Public Company Accounting Oversight Board (PCAOB)
Answer: B
Rationale: The IPPF is a framework developed and issued by The Institute of
Internal Auditors (IIA) to guide the internal audit profession.
3. Which of the following is NOT one of the core principles for the professional
practice of internal auditing according to the IIA?
A) Integrity
B) Objectivity
C) Confidentiality
D) Competency
Answer: C
Rationale: The IIA lists Integrity, Objectivity, and Competency as core principles,
but Confidentiality is an important attribute rather than a core principle.
4. When assessing risk, which of the following is the best description of inherent
risk?
A) The risk after controls are applied
B) The risk that remains after risk responses
C) The risk in the absence of any controls
D) The risk that the auditor will make an error
, Answer: C
Rationale: Inherent risk is the risk of a material misstatement or loss in the
absence of any controls.
5. Which type of audit opinion should an internal auditor issue if controls are
ineffective and significant non-compliance is identified?
A) Unqualified opinion
B) Disclaimer of opinion
C) Adverse opinion
D) Qualified opinion
Answer: C
Rationale: An adverse opinion indicates that controls are ineffective and there
are significant issues, whereas unqualified means controls are effective.
6. Which element of the internal control framework addresses the "tone at the
top" and ethical values?
A) Control activities
B) Monitoring activities
C) Control environment
D) Risk assessment
Answer: C
Rationale: The control environment includes management’s philosophy, ethical
values, and the overall tone set at the top.
Exam 1 Questions and Answers (Verified
Answers) with Rationales 2025
1. Which of the following best describes the primary role of internal auditing?
A) To prepare financial statements
B) To provide independent assurance that an organization’s risk management,
governance, and internal control processes are operating effectively
C) To manage the company’s compliance with tax laws
D) To design the company’s IT infrastructure
Answer: B
Rationale: The primary role of internal auditing is to provide independent
assurance on risk management, governance, and internal controls. It is not
primarily involved in preparing financial statements or managing IT or tax
functions.
2. The International Professional Practices Framework (IPPF) is issued by which
organization?
A) American Institute of CPAs (AICPA)
B) Institute of Internal Auditors (IIA)
,C) Financial Accounting Standards Board (FASB)
D) Public Company Accounting Oversight Board (PCAOB)
Answer: B
Rationale: The IPPF is a framework developed and issued by The Institute of
Internal Auditors (IIA) to guide the internal audit profession.
3. Which of the following is NOT one of the core principles for the professional
practice of internal auditing according to the IIA?
A) Integrity
B) Objectivity
C) Confidentiality
D) Competency
Answer: C
Rationale: The IIA lists Integrity, Objectivity, and Competency as core principles,
but Confidentiality is an important attribute rather than a core principle.
4. When assessing risk, which of the following is the best description of inherent
risk?
A) The risk after controls are applied
B) The risk that remains after risk responses
C) The risk in the absence of any controls
D) The risk that the auditor will make an error
, Answer: C
Rationale: Inherent risk is the risk of a material misstatement or loss in the
absence of any controls.
5. Which type of audit opinion should an internal auditor issue if controls are
ineffective and significant non-compliance is identified?
A) Unqualified opinion
B) Disclaimer of opinion
C) Adverse opinion
D) Qualified opinion
Answer: C
Rationale: An adverse opinion indicates that controls are ineffective and there
are significant issues, whereas unqualified means controls are effective.
6. Which element of the internal control framework addresses the "tone at the
top" and ethical values?
A) Control activities
B) Monitoring activities
C) Control environment
D) Risk assessment
Answer: C
Rationale: The control environment includes management’s philosophy, ethical
values, and the overall tone set at the top.
