ACCT 422 CIA EXAM.FINAL TEST 2026\2027.
1. One of the purposes of the International Standards for the Professional Practice of Internal
Auditing ("the Standards") is to:
a. Establish the independence of the internal audit activity and emphasize the objectivity of
internal auditing.
b. Encourage the professionalization of internal auditing.
c. Encourage external auditors to make more extensive use of the work of internal auditors.
d. Establish the basis for evaluating internal auditing performance.
d. Establish the basis for evaluating internal auditing performance.
The IIA provides the following purposes of the Standards:
1. Guide adherence with the mandatory elements of the IPPF.
2. Provide a framework for performing and promoting a broad range of value-added internal audit
activities.
3. Establish the basis for evaluating internal auditing performance.
4. Foster improved organizational processes and operations.
2. A CIA is working in a noninternal-auditing position as the director of purchasing. The CIA signed
a contract to procure a large order from the supplier with the best price, quality, and
performance. Shortly after signing the contract, the supplier presented the CIA with a gift of
significant monetary value. Which of the following statements regarding the acceptance of the gift
is true?
Acceptance of the gift violates The IIA's Code of Ethics and is prohibited for a CIA.
3. Which of the following most likely constitutes a violation of The IIA's Code of Ethics by an
internal auditor?
Purchasing stock in a target entity after overhearing an executive's discussion of a possible acquisition.
Rule of Conduct 3.2 under the confidentiality principle states, "Internal auditors shall not use information
for any personal gain or in any manner that would be contrary to the law or detrimental to the legitimate
and ethical objectives of the organization."
4. An internal auditor, nearly finished with an engagement, discovers that the director of
marketing has a gambling habit. The gambling issue is not directly related to the existing
engagement, and the internal auditor is under pressure to complete it quickly. The internal
, ACCT 422 CIA EXAM.FINAL TEST 2026\2027.
auditor notes the problem and passes the information on to the chief audit executive but does no
further follow-up. The internal auditor's actions:
Are not in violation of either The IIA's Code of Ethics or the Standards.
Rule of Conduct 2.3 under the objectivity principle states, "Internal auditors shall disclose all material
facts known to them that, if not disclosed, may distort the reporting of activities under review." Attribute
Standard 1120 states, "Internal auditors must have an impartial, unbiased attitude and avoid any conflict
of interest." The internal auditor did not withhold information and properly followed up with the chief audit
executive upon learning of the information. The IIA's Code of Ethics and the Standards therefore were not
violated.
5. The chief audit executive (CAE) has been appointed to a committee to evaluate the appointment
of the external auditors. The engagement partner for the external accounting firm wants the CAE
to join her for a week of hunting at her private lodge. The CAE should:
Refuse on the grounds of conflict of interest.
Rule of Conduct 2.1 under the objectivity principle states, "Internal auditors shall not participate in any
activity or relationship that may impair or be presumed to impair their unbiased assessment. This
participation includes those activities or relationships that may be in conflict with the interests of the
organization." Furthermore, under Rule of Conduct 2.2, "Internal auditors shall not accept anything that
may impair or be presumed to impair their professional judgment."
6. A primary purpose of establishing a code of conduct within a professional organization is to:
Promote an ethical culture among professionals who serve others.
The purpose of The IIA's Code of Ethics is "to promote an ethical culture in the profession of internal
auditing" (Introduction).
7. An internal auditor for a large regional bank was asked to serve on the board of directors of a
local bank. The bank competes in many of the same markets as the regional bank but focuses
more on consumer financing than on business financing. In accepting this position, the internal
auditor
a. Violates The IIA's Code of Ethics because serving on the board may be in conflict with the best
interests of the internal auditor's employer
b. Violates The IIA's Code of Ethics because the information gained while serving on the board of
directors of the local bank may influence recommendations regarding potential acquisitions
1. One of the purposes of the International Standards for the Professional Practice of Internal
Auditing ("the Standards") is to:
a. Establish the independence of the internal audit activity and emphasize the objectivity of
internal auditing.
b. Encourage the professionalization of internal auditing.
c. Encourage external auditors to make more extensive use of the work of internal auditors.
d. Establish the basis for evaluating internal auditing performance.
d. Establish the basis for evaluating internal auditing performance.
The IIA provides the following purposes of the Standards:
1. Guide adherence with the mandatory elements of the IPPF.
2. Provide a framework for performing and promoting a broad range of value-added internal audit
activities.
3. Establish the basis for evaluating internal auditing performance.
4. Foster improved organizational processes and operations.
2. A CIA is working in a noninternal-auditing position as the director of purchasing. The CIA signed
a contract to procure a large order from the supplier with the best price, quality, and
performance. Shortly after signing the contract, the supplier presented the CIA with a gift of
significant monetary value. Which of the following statements regarding the acceptance of the gift
is true?
Acceptance of the gift violates The IIA's Code of Ethics and is prohibited for a CIA.
3. Which of the following most likely constitutes a violation of The IIA's Code of Ethics by an
internal auditor?
Purchasing stock in a target entity after overhearing an executive's discussion of a possible acquisition.
Rule of Conduct 3.2 under the confidentiality principle states, "Internal auditors shall not use information
for any personal gain or in any manner that would be contrary to the law or detrimental to the legitimate
and ethical objectives of the organization."
4. An internal auditor, nearly finished with an engagement, discovers that the director of
marketing has a gambling habit. The gambling issue is not directly related to the existing
engagement, and the internal auditor is under pressure to complete it quickly. The internal
, ACCT 422 CIA EXAM.FINAL TEST 2026\2027.
auditor notes the problem and passes the information on to the chief audit executive but does no
further follow-up. The internal auditor's actions:
Are not in violation of either The IIA's Code of Ethics or the Standards.
Rule of Conduct 2.3 under the objectivity principle states, "Internal auditors shall disclose all material
facts known to them that, if not disclosed, may distort the reporting of activities under review." Attribute
Standard 1120 states, "Internal auditors must have an impartial, unbiased attitude and avoid any conflict
of interest." The internal auditor did not withhold information and properly followed up with the chief audit
executive upon learning of the information. The IIA's Code of Ethics and the Standards therefore were not
violated.
5. The chief audit executive (CAE) has been appointed to a committee to evaluate the appointment
of the external auditors. The engagement partner for the external accounting firm wants the CAE
to join her for a week of hunting at her private lodge. The CAE should:
Refuse on the grounds of conflict of interest.
Rule of Conduct 2.1 under the objectivity principle states, "Internal auditors shall not participate in any
activity or relationship that may impair or be presumed to impair their unbiased assessment. This
participation includes those activities or relationships that may be in conflict with the interests of the
organization." Furthermore, under Rule of Conduct 2.2, "Internal auditors shall not accept anything that
may impair or be presumed to impair their professional judgment."
6. A primary purpose of establishing a code of conduct within a professional organization is to:
Promote an ethical culture among professionals who serve others.
The purpose of The IIA's Code of Ethics is "to promote an ethical culture in the profession of internal
auditing" (Introduction).
7. An internal auditor for a large regional bank was asked to serve on the board of directors of a
local bank. The bank competes in many of the same markets as the regional bank but focuses
more on consumer financing than on business financing. In accepting this position, the internal
auditor
a. Violates The IIA's Code of Ethics because serving on the board may be in conflict with the best
interests of the internal auditor's employer
b. Violates The IIA's Code of Ethics because the information gained while serving on the board of
directors of the local bank may influence recommendations regarding potential acquisitions
