CERTIFIED INTERNAL AUDITOR (CIA)
PRACTICE EXAMINATION QUESTIONS
WITH CORRECT ANSWERS AND
RATIONALES INTERNAL AUDIT
FUNDAMENTALS, GOVERNANCE, RISK,
AND CONTROLS
1. What is the primary purpose of internal auditing?
A. To prepare financial statements
B. To provide independent and objective assurance and
advisory services designed to add value and improve
operations
C. To replace external auditors
D. To guarantee that fraud will not occur
Correct Answer: B
,Rationale: Internal auditing provides independent, objective
assurance and advisory services intended to add value and
improve organizational operations.
2. Which principle is most important to internal audit
independence?
A. Internal auditors should report only to operational
managers
B. The chief audit executive should have unrestricted access
to senior management and the board
C. Internal auditors should avoid communicating with the
board
D. Internal auditors should perform management's
responsibilities
Correct Answer: B
Rationale: Direct and unrestricted access to the board and
senior management supports organizational independence.
3. What is the primary responsibility of the chief audit
executive (CAE)?
,A. Preparing the organization's financial statements
B. Managing the organization's entire risk portfolio
C. Managing the internal audit activity effectively and
ensuring it delivers value
D. Approving all operational transactions
Correct Answer: C
Rationale: The CAE is responsible for directing the internal
audit activity and ensuring that its work supports
organizational objectives.
4. Which body normally provides the strongest oversight of
the internal audit activity?
A. Purchasing department
B. Audit committee or equivalent governing body
C. Human resources department
D. Accounts payable department
Correct Answer: B
Rationale: The audit committee or equivalent governing body
commonly oversees internal audit independence, performance,
and reporting.
, 5. Which statement best describes internal audit objectivity?
A. Auditors must never communicate with management
B. Auditors should maintain an unbiased mental attitude
C. Auditors should always agree with management
D. Auditors should avoid documenting judgments
Correct Answer: B
Rationale: Objectivity requires an unbiased and impartial
attitude when performing professional responsibilities.
6. Which situation creates the greatest threat to internal
auditor objectivity?
A. Reviewing a process unfamiliar to the auditor
B. Auditing an area managed by the auditor's close family
member
C. Attending professional training
D. Reviewing documented policies
Correct Answer: B
PRACTICE EXAMINATION QUESTIONS
WITH CORRECT ANSWERS AND
RATIONALES INTERNAL AUDIT
FUNDAMENTALS, GOVERNANCE, RISK,
AND CONTROLS
1. What is the primary purpose of internal auditing?
A. To prepare financial statements
B. To provide independent and objective assurance and
advisory services designed to add value and improve
operations
C. To replace external auditors
D. To guarantee that fraud will not occur
Correct Answer: B
,Rationale: Internal auditing provides independent, objective
assurance and advisory services intended to add value and
improve organizational operations.
2. Which principle is most important to internal audit
independence?
A. Internal auditors should report only to operational
managers
B. The chief audit executive should have unrestricted access
to senior management and the board
C. Internal auditors should avoid communicating with the
board
D. Internal auditors should perform management's
responsibilities
Correct Answer: B
Rationale: Direct and unrestricted access to the board and
senior management supports organizational independence.
3. What is the primary responsibility of the chief audit
executive (CAE)?
,A. Preparing the organization's financial statements
B. Managing the organization's entire risk portfolio
C. Managing the internal audit activity effectively and
ensuring it delivers value
D. Approving all operational transactions
Correct Answer: C
Rationale: The CAE is responsible for directing the internal
audit activity and ensuring that its work supports
organizational objectives.
4. Which body normally provides the strongest oversight of
the internal audit activity?
A. Purchasing department
B. Audit committee or equivalent governing body
C. Human resources department
D. Accounts payable department
Correct Answer: B
Rationale: The audit committee or equivalent governing body
commonly oversees internal audit independence, performance,
and reporting.
, 5. Which statement best describes internal audit objectivity?
A. Auditors must never communicate with management
B. Auditors should maintain an unbiased mental attitude
C. Auditors should always agree with management
D. Auditors should avoid documenting judgments
Correct Answer: B
Rationale: Objectivity requires an unbiased and impartial
attitude when performing professional responsibilities.
6. Which situation creates the greatest threat to internal
auditor objectivity?
A. Reviewing a process unfamiliar to the auditor
B. Auditing an area managed by the auditor's close family
member
C. Attending professional training
D. Reviewing documented policies
Correct Answer: B
