CIA Part 1 Multiple Choice Questions with
Correct Answers
Today's internal auditor will often encounter a wide range of potential ethical dilemmas, not all
of which are explicitly addressed by The IIA's Code of Ethics. If the internal auditor encounters
such a dilemma, the internal auditor should always
A. Seek counsel from an independent attorney to determine the personal consequences of
potential actions.
B. Apply and uphold the principles embodied in The IIA's Code of Ethics.
C. Seek the counsel of the board before deciding on an action.
D. Act consistently with the code of ethics adopted by the organization even if such action is not
consistent with The IIA's Code of Ethics. Correct Answ_B
In complying with The IIA's Code of Ethics, an internal auditor should
A. Use individual judgment in the application of the principles set forth in the Code.
B. Respect and contribute to the objectives of the organization even if it is engaged in illegal
activities.
C. Go beyond the limitation of personal technical skills to advance the interest of the
organization.
D. Primarily apply the competency principle in establishing trust. Correct Answ_A
,An internal auditor who encounters an ethical dilemma not explicitly addressed by The IIA's
Code of Ethics should always
A. Seek counsel from an independent attorney to determine the personal consequences of
potential actions.
B. Take action consistent with the principles embodied in The IIA's Code of Ethics.
C. Seek the counsel of the audit committee before deciding on an action.
D. Act consistently with the employing organization's code of ethics even if such action would
not be consistent with The IIA's Code of Ethics. Correct Answ_B
Which of the following is permissible under The IIA's Code of Ethics?
A. In response to a subpoena, an auditor appeared in a court of law and disclosed confidential,
audit-related information that could potentially damage the auditor's organization.
B. An auditor used audit-related information in a decision to buy stock issued by the employer
corporations.
C. After praising an employee in a recent audit engagement communication, an auditor accepted
a gift from the employee.
D. An auditor did not report significant observations about illegal activity to the board because
management indicated that it would resolve the issue. Correct Answ_A
,The IIA's Code of Ethics requires internal auditors to perform their work with
A. Honesty, diligence, and responsibility.
B. Timeliness, sobriety, and clarity.
C. Knowledge, skills, and competencies.
D. Punctuality, objectivity, and responsibility. Correct Answ_A
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?
A. Acceptance of the gift is prohibited only if it is not customary.
B. Acceptance of the gift violates The IIA's Code of Ethics and is prohibited for a CIA.
C. Because the CIA is no longer acting as an internal auditor, acceptance of the gift is governed
only by the organization's code of conduct.
D. Because the contract was signed before the gift was offered, acceptance of the gift does not
violate either, The IIA's Code of Ethics or the organization's code of conduct. Correct
Answ_B
, 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
A. Accept, assuming both their schedule allow it.
B. Refuse on the grounds of conflict of interest
C. Accept as long as it is not charged to employer time.
D. Ask the comptroller whether accepting the invitation is a violation of the organization's code
of ethics. Correct Answ_B
In a review of travel and entertainment expenses, a certified internal auditor questioned the
business purposes of an officer's reimbursed travel expenses. The officer promised to compensate
for the questioned amounts by not claiming legitimate expenses in the future. If the officer makes
good on the promise, the internal auditor
A. Can ignore the original charging of the nonbusiness expenses.
B. Should inform the tax authorities in any event.
C. Should still include the finding in the final engagement communication.
D. Should recommend that the officer forfeit any frequent flyer miles received as part of the
questionable travel. Correct Answ_C
Correct Answers
Today's internal auditor will often encounter a wide range of potential ethical dilemmas, not all
of which are explicitly addressed by The IIA's Code of Ethics. If the internal auditor encounters
such a dilemma, the internal auditor should always
A. Seek counsel from an independent attorney to determine the personal consequences of
potential actions.
B. Apply and uphold the principles embodied in The IIA's Code of Ethics.
C. Seek the counsel of the board before deciding on an action.
D. Act consistently with the code of ethics adopted by the organization even if such action is not
consistent with The IIA's Code of Ethics. Correct Answ_B
In complying with The IIA's Code of Ethics, an internal auditor should
A. Use individual judgment in the application of the principles set forth in the Code.
B. Respect and contribute to the objectives of the organization even if it is engaged in illegal
activities.
C. Go beyond the limitation of personal technical skills to advance the interest of the
organization.
D. Primarily apply the competency principle in establishing trust. Correct Answ_A
,An internal auditor who encounters an ethical dilemma not explicitly addressed by The IIA's
Code of Ethics should always
A. Seek counsel from an independent attorney to determine the personal consequences of
potential actions.
B. Take action consistent with the principles embodied in The IIA's Code of Ethics.
C. Seek the counsel of the audit committee before deciding on an action.
D. Act consistently with the employing organization's code of ethics even if such action would
not be consistent with The IIA's Code of Ethics. Correct Answ_B
Which of the following is permissible under The IIA's Code of Ethics?
A. In response to a subpoena, an auditor appeared in a court of law and disclosed confidential,
audit-related information that could potentially damage the auditor's organization.
B. An auditor used audit-related information in a decision to buy stock issued by the employer
corporations.
C. After praising an employee in a recent audit engagement communication, an auditor accepted
a gift from the employee.
D. An auditor did not report significant observations about illegal activity to the board because
management indicated that it would resolve the issue. Correct Answ_A
,The IIA's Code of Ethics requires internal auditors to perform their work with
A. Honesty, diligence, and responsibility.
B. Timeliness, sobriety, and clarity.
C. Knowledge, skills, and competencies.
D. Punctuality, objectivity, and responsibility. Correct Answ_A
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?
A. Acceptance of the gift is prohibited only if it is not customary.
B. Acceptance of the gift violates The IIA's Code of Ethics and is prohibited for a CIA.
C. Because the CIA is no longer acting as an internal auditor, acceptance of the gift is governed
only by the organization's code of conduct.
D. Because the contract was signed before the gift was offered, acceptance of the gift does not
violate either, The IIA's Code of Ethics or the organization's code of conduct. Correct
Answ_B
, 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
A. Accept, assuming both their schedule allow it.
B. Refuse on the grounds of conflict of interest
C. Accept as long as it is not charged to employer time.
D. Ask the comptroller whether accepting the invitation is a violation of the organization's code
of ethics. Correct Answ_B
In a review of travel and entertainment expenses, a certified internal auditor questioned the
business purposes of an officer's reimbursed travel expenses. The officer promised to compensate
for the questioned amounts by not claiming legitimate expenses in the future. If the officer makes
good on the promise, the internal auditor
A. Can ignore the original charging of the nonbusiness expenses.
B. Should inform the tax authorities in any event.
C. Should still include the finding in the final engagement communication.
D. Should recommend that the officer forfeit any frequent flyer miles received as part of the
questionable travel. Correct Answ_C
