CIA PRACTICE EXAM QUESTIONS AND
ANSWERS 2026/2027
After the chief audit executive receives approval from the board to offer consulting
services, what should be done? - ANSWER-The internal audit charter should be
amended
Internal auditing has planned an engagement to evaluate the effectiveness of the quality
assurance function as it affects the receipt of goods, the transfer of the goods into
production, and the scrap costs related to defective items. The engagement client
argues that such an engagement is not within the scope of the internal audit activity and
should come under the purview of the quality assurance department only. What is the
most appropriate response? - ANSWER-Refer to the internal audit activity's charter and
the approved engagement plan that includes the area designated for evaluation in the
current time period.
During the course of an engagement, an internal auditor discovers that a clerk is
embezzling funds from the organization. Although this is the first embezzlement ever
encountered and the organization has a security department, the internal auditor
decides to interrogate the suspect. If the internal auditor is violating The IIA's Code of
Ethics, the rule violated is most likely - ANSWER-Lack of competence in this area
During an examination of grants awarded by a not-for-profit organization, an internal
auditor discovered a number of grants made without the approval of the grant
authorization committee (which includes outside representatives), as required by the
organization's charter. All the grants, however, were approved and documented by the
president. The chair of the grant authorization committee, who is also a member of the
board of directors, proposes that the committee meet and retroactively approve all the
grants before the engagement communication is issued. If the committee meets and
approves the grants before such issuance, the internal auditor should - ANSWER-
Report the override of control to the board
Which of the following most likely constitutes a violation of The IIA's Code of Ethics by
an internal auditor? - ANSWER-Purchasing stock in a target entity after overhearing an
executive discussions of a possible acquisition
The purposes of the Standards include all of the following except - ANSWER-Guiding
the ethical conduct of internal auditors.
A new staff internal auditor was told to perform an engagement in an area with which
the internal auditor was not familiar. Because of time constraints, no supervision was
provided. The assignment represented a good learning experience, but the area was
clearly beyond the internal auditor's competence. Nonetheless, the internal auditor
prepared comprehensive working papers and communicated the results to
, management. In this situation, - ANSWER-The internal audit activity violated the
Standards by not providing adequate supervision.
An accounting association established a code of ethics for all members. What is one of
the association's primary purposes of establishing the code of ethics? - ANSWER-To
outline criteria for professional behavior to maintain standards of integrity and
objectivity.
An internal auditor has uncovered facts that could be interpreted as indicating unlawful
activity on the part of an engagement client. The internal auditor decides not to inform
senior management and the board of these facts because of lack of proof. The internal
auditor, however, decides that, if questions are raised regarding the omitted facts, they
will be answered fully and truthfully. In taking this action, the internal auditor -
ANSWER-Has violated the Standards because the internal auditor should inform the
appropriate authorities in the organization if fraud may be indicated.
A review of an organization's code of conduct revealed that it contained comprehensive
guidelines designed to inspire high levels of ethical behavior. The review also revealed
that employees were knowledgeable of its provisions. However, some employees still
did not comply with the code. What element should a code of conduct contain to
enhance its effectiveness? - ANSWER-Provisions for disciplinary action in the event of
violations.
One of the purposes of the International Standards for the Professional Practice of
Internal Auditing ("the Standards") is to - ANSWER-Establish the basis for evaluating
internal auditing performance
The code of ethics of a professional organization sets forth - ANSWER-Broad standards
of conduct for the members of the organization.
A charter is one of the more important factors positively affecting the internal audit
activity's independence. Which of the following is least likely to be part of the charter? -
ANSWER-The length of tenure of the chief audit executive
The transportation department of a publicly held company has asked the internal audit
activity to review the design specifications for a proposed new warehouse and repair
facility. The best reason for the internal audit activity to decline the request is -
ANSWER-Such a review does not fall within the authority granted in the internal audit
charter.
A primary purpose of establishing a code of conduct within a professional organization
is to - ANSWER-Promote an ethical culture among professionals who serve others.
The internal audit activity's scope of responsibilities includes - ANSWER-Evaluating risk
ANSWERS 2026/2027
After the chief audit executive receives approval from the board to offer consulting
services, what should be done? - ANSWER-The internal audit charter should be
amended
Internal auditing has planned an engagement to evaluate the effectiveness of the quality
assurance function as it affects the receipt of goods, the transfer of the goods into
production, and the scrap costs related to defective items. The engagement client
argues that such an engagement is not within the scope of the internal audit activity and
should come under the purview of the quality assurance department only. What is the
most appropriate response? - ANSWER-Refer to the internal audit activity's charter and
the approved engagement plan that includes the area designated for evaluation in the
current time period.
During the course of an engagement, an internal auditor discovers that a clerk is
embezzling funds from the organization. Although this is the first embezzlement ever
encountered and the organization has a security department, the internal auditor
decides to interrogate the suspect. If the internal auditor is violating The IIA's Code of
Ethics, the rule violated is most likely - ANSWER-Lack of competence in this area
During an examination of grants awarded by a not-for-profit organization, an internal
auditor discovered a number of grants made without the approval of the grant
authorization committee (which includes outside representatives), as required by the
organization's charter. All the grants, however, were approved and documented by the
president. The chair of the grant authorization committee, who is also a member of the
board of directors, proposes that the committee meet and retroactively approve all the
grants before the engagement communication is issued. If the committee meets and
approves the grants before such issuance, the internal auditor should - ANSWER-
Report the override of control to the board
Which of the following most likely constitutes a violation of The IIA's Code of Ethics by
an internal auditor? - ANSWER-Purchasing stock in a target entity after overhearing an
executive discussions of a possible acquisition
The purposes of the Standards include all of the following except - ANSWER-Guiding
the ethical conduct of internal auditors.
A new staff internal auditor was told to perform an engagement in an area with which
the internal auditor was not familiar. Because of time constraints, no supervision was
provided. The assignment represented a good learning experience, but the area was
clearly beyond the internal auditor's competence. Nonetheless, the internal auditor
prepared comprehensive working papers and communicated the results to
, management. In this situation, - ANSWER-The internal audit activity violated the
Standards by not providing adequate supervision.
An accounting association established a code of ethics for all members. What is one of
the association's primary purposes of establishing the code of ethics? - ANSWER-To
outline criteria for professional behavior to maintain standards of integrity and
objectivity.
An internal auditor has uncovered facts that could be interpreted as indicating unlawful
activity on the part of an engagement client. The internal auditor decides not to inform
senior management and the board of these facts because of lack of proof. The internal
auditor, however, decides that, if questions are raised regarding the omitted facts, they
will be answered fully and truthfully. In taking this action, the internal auditor -
ANSWER-Has violated the Standards because the internal auditor should inform the
appropriate authorities in the organization if fraud may be indicated.
A review of an organization's code of conduct revealed that it contained comprehensive
guidelines designed to inspire high levels of ethical behavior. The review also revealed
that employees were knowledgeable of its provisions. However, some employees still
did not comply with the code. What element should a code of conduct contain to
enhance its effectiveness? - ANSWER-Provisions for disciplinary action in the event of
violations.
One of the purposes of the International Standards for the Professional Practice of
Internal Auditing ("the Standards") is to - ANSWER-Establish the basis for evaluating
internal auditing performance
The code of ethics of a professional organization sets forth - ANSWER-Broad standards
of conduct for the members of the organization.
A charter is one of the more important factors positively affecting the internal audit
activity's independence. Which of the following is least likely to be part of the charter? -
ANSWER-The length of tenure of the chief audit executive
The transportation department of a publicly held company has asked the internal audit
activity to review the design specifications for a proposed new warehouse and repair
facility. The best reason for the internal audit activity to decline the request is -
ANSWER-Such a review does not fall within the authority granted in the internal audit
charter.
A primary purpose of establishing a code of conduct within a professional organization
is to - ANSWER-Promote an ethical culture among professionals who serve others.
The internal audit activity's scope of responsibilities includes - ANSWER-Evaluating risk
