CIA- Certified Internal Auditor Part 1 Multiple
Choice Questions with correct Answers (A+
GRADED 100% VERIFIED) 2025 2026
"Except for the missing documentation noted above, the system of internal controls
over petty cash is functioning as intended." The above statement is an example of
a(n)
A. Observation.
B. Objective.
C. Conclusion.
D. Finding. - ANSWER: C
A 90% confidence interval for the mean of a population based on the information in a
sample always implies that there is a 90% chance that the
A. Estimate is equal to the true population mean.
B. True population mean is no larger than the largest endpoint of the interval.
C. Standard deviation will not be any greater than 10% of the population mean.
D. True population mean lies within the specified confidence interval. - ANSWER: D
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?
A. Access to records within the organization.
B. The scope of internal audit activities.
C. The length of tenure of the chief audit executive.
D. Access to personnel within the organization. - ANSWER: C. This is a meter of
ongoing judgment for the board and should not be codified in the charter.
A chief audit executive (CAE) for a very small internal audit department has just
received a request from management to perform an audit of an extremely complex
area in with the CAE and the department have no expertise. The nature of the audit
engagement is within the scope of internal audit activities. Management has
expressed a desire to have the engagement conducted in the very near future
because of the high level of risk involved. Which of the following responses by the
CAE would be in violation of the Standards?
A. Discuss with management the possibility of outsourcing the audit of this complex
area.
B. Add an outside consultant to the audit staff to assist in the performance of the
audit engagement.
C. Accept the audit engagement and begin immediately, since it is a high-risk area.
,D. Discuss the timeline of the audit engagement with management to determine if
sufficient time exists in which to develop appropr - ANSWER: C
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. - ANSWER: B
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,
A. The internal audit activity violated the Standards by hiring an internal auditor
without proficiency in the area.
B. The internal audit activity violated the Standards by not providing adequate
supervision.
C. The CAE has not violated The IIA's Code of Ethics because it does not address
supervision.
D. The Standards and The IIA's Code of Ethics were followed by the internal audit
activity. - ANSWER: B
A primary purpose of establishing a code of conduct within a professional
organization is to
A. Reduce the likelihood that members of the profession will be sued for substandard
work.
B. Ensure that all members of the profession perform at approximately the same
level of competence.
C. Promote an ethical culture among professionals who service others.
D. Require members of the profession to exhibit loyalty in all matter pertaining to the
affairs of their organization. - ANSWER: C.
A receiving department receives copies of purchase orders for use in identifying and
recording inventory receipts. The purchase orders list the name of the vendor and
,the quantities of the materials ordered. A possible error that this system could allow
is
A. Payment to unauthorized vendors.
B. Payment for unauthorized purchases.
C. Overpayment for partial deliveries.
D. Delay in recording purchases. - ANSWER: C
A review of an organization's code of conduct revealed that it contained
comprehensive guidelines designed to aspire high levels of ethical behavior. The
review also revealed that employees were knowledgeable of it provisions. However,
some employees still did not comply with the code. What element should a code of
conduct contain to enhance its effectiveness?
A. Periodic review and acknowledgment by all employees.
B. Employee involvement in its development.
C. Public knowledge of its contents and purpose.
D. Provisions for disciplinary action in the event of violations. - ANSWER: D.
A set of engagement working papers contained a copy of a document providing
information that an expensive item that had been special-ordered was actually on
hand on a particular date. The most likely source of this information is a printout from
a computerized
A. Purchases journal.
B. Cash payments journal.
C. Perpetual inventory file.
D. Receiving report file. - ANSWER: C
A utility with a large investment in repair vehicles would most likely implement which
internal control to reduce the risk of vehicle theft or loss?
A. Review insurance coverage for adequacy.
B. Systematically account for all repair work orders.
C. Physically inventory vehicles and reconcile the results with the accounting
records.
D. Maintain vehicles in a secured location with release and return subject to approval
by a custodian. - ANSWER: D
A well-designed internal control questionnaire should
A. Elicit "yes" or "no" responses rather than narrative responses and be organized by
department.
B. Be a sufficient source of data for assessment of control risk.
C. Help evaluate the effectiveness of internal control.
D. Be independent of the objectives of the internal auditing engagement. -
ANSWER: C
A working paper is complete when it
, A. Complies with the internal audit activity's format requirements.
B. Contain all of the attributes of an observation.
C. Is clear, concise, and accurate.
D. Satisfies the engagement objective for which it is developed. - ANSWER: D
Accounts payable schedule verification may include the use of analytical information.
Which of the following is analytical information?
A. Comparing the schedule with the accounts payable ledger or unpaid voucher file.
B. Comparing the balance on the schedule with the balances of prior years.
C. Comparing confirmations received from selected creditors with the accounts
payable ledger.
D. Examining vendors' invoices in support of selected items on the schedule. -
ANSWER: B
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?
A. The outline criteria for professional behavior to maintain standards of integrity and
objectivity
B. To establish standards to follow for effective accounting practice.
C. To provide a framework within which accounting policies could be effectively
developed and executed.
D. The outline criteria that can be used in conducting interviews of potential new
accountants - ANSWER: A
An adequate system of internal controls is most likely to detect a fraud perpetrated
by a
A. Group of employees in collusion.
B. Single employee.
C. Group of managers in collusion.
D. Single manager. - ANSWER: B
An auditor for the state highway and safety department needs to estimate the
average highway weight of tractor-trailer trucks using the state's highway system.
Which estimation method must be used?
A. Mean-per-unit.
B. Difference.
C. Ratio.
D. Probability-proportional-to-size. - ANSWER: A
An auditor is checking the accuracy of a computer-printed inventory listing to
determine whether the total monetary value of inventory is significantly overstated.
Because there is not adequate time or resources to check all items in the
warehouse, a sample of inventory items must be used. If the sample size is fixed,
Choice Questions with correct Answers (A+
GRADED 100% VERIFIED) 2025 2026
"Except for the missing documentation noted above, the system of internal controls
over petty cash is functioning as intended." The above statement is an example of
a(n)
A. Observation.
B. Objective.
C. Conclusion.
D. Finding. - ANSWER: C
A 90% confidence interval for the mean of a population based on the information in a
sample always implies that there is a 90% chance that the
A. Estimate is equal to the true population mean.
B. True population mean is no larger than the largest endpoint of the interval.
C. Standard deviation will not be any greater than 10% of the population mean.
D. True population mean lies within the specified confidence interval. - ANSWER: D
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?
A. Access to records within the organization.
B. The scope of internal audit activities.
C. The length of tenure of the chief audit executive.
D. Access to personnel within the organization. - ANSWER: C. This is a meter of
ongoing judgment for the board and should not be codified in the charter.
A chief audit executive (CAE) for a very small internal audit department has just
received a request from management to perform an audit of an extremely complex
area in with the CAE and the department have no expertise. The nature of the audit
engagement is within the scope of internal audit activities. Management has
expressed a desire to have the engagement conducted in the very near future
because of the high level of risk involved. Which of the following responses by the
CAE would be in violation of the Standards?
A. Discuss with management the possibility of outsourcing the audit of this complex
area.
B. Add an outside consultant to the audit staff to assist in the performance of the
audit engagement.
C. Accept the audit engagement and begin immediately, since it is a high-risk area.
,D. Discuss the timeline of the audit engagement with management to determine if
sufficient time exists in which to develop appropr - ANSWER: C
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. - ANSWER: B
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,
A. The internal audit activity violated the Standards by hiring an internal auditor
without proficiency in the area.
B. The internal audit activity violated the Standards by not providing adequate
supervision.
C. The CAE has not violated The IIA's Code of Ethics because it does not address
supervision.
D. The Standards and The IIA's Code of Ethics were followed by the internal audit
activity. - ANSWER: B
A primary purpose of establishing a code of conduct within a professional
organization is to
A. Reduce the likelihood that members of the profession will be sued for substandard
work.
B. Ensure that all members of the profession perform at approximately the same
level of competence.
C. Promote an ethical culture among professionals who service others.
D. Require members of the profession to exhibit loyalty in all matter pertaining to the
affairs of their organization. - ANSWER: C.
A receiving department receives copies of purchase orders for use in identifying and
recording inventory receipts. The purchase orders list the name of the vendor and
,the quantities of the materials ordered. A possible error that this system could allow
is
A. Payment to unauthorized vendors.
B. Payment for unauthorized purchases.
C. Overpayment for partial deliveries.
D. Delay in recording purchases. - ANSWER: C
A review of an organization's code of conduct revealed that it contained
comprehensive guidelines designed to aspire high levels of ethical behavior. The
review also revealed that employees were knowledgeable of it provisions. However,
some employees still did not comply with the code. What element should a code of
conduct contain to enhance its effectiveness?
A. Periodic review and acknowledgment by all employees.
B. Employee involvement in its development.
C. Public knowledge of its contents and purpose.
D. Provisions for disciplinary action in the event of violations. - ANSWER: D.
A set of engagement working papers contained a copy of a document providing
information that an expensive item that had been special-ordered was actually on
hand on a particular date. The most likely source of this information is a printout from
a computerized
A. Purchases journal.
B. Cash payments journal.
C. Perpetual inventory file.
D. Receiving report file. - ANSWER: C
A utility with a large investment in repair vehicles would most likely implement which
internal control to reduce the risk of vehicle theft or loss?
A. Review insurance coverage for adequacy.
B. Systematically account for all repair work orders.
C. Physically inventory vehicles and reconcile the results with the accounting
records.
D. Maintain vehicles in a secured location with release and return subject to approval
by a custodian. - ANSWER: D
A well-designed internal control questionnaire should
A. Elicit "yes" or "no" responses rather than narrative responses and be organized by
department.
B. Be a sufficient source of data for assessment of control risk.
C. Help evaluate the effectiveness of internal control.
D. Be independent of the objectives of the internal auditing engagement. -
ANSWER: C
A working paper is complete when it
, A. Complies with the internal audit activity's format requirements.
B. Contain all of the attributes of an observation.
C. Is clear, concise, and accurate.
D. Satisfies the engagement objective for which it is developed. - ANSWER: D
Accounts payable schedule verification may include the use of analytical information.
Which of the following is analytical information?
A. Comparing the schedule with the accounts payable ledger or unpaid voucher file.
B. Comparing the balance on the schedule with the balances of prior years.
C. Comparing confirmations received from selected creditors with the accounts
payable ledger.
D. Examining vendors' invoices in support of selected items on the schedule. -
ANSWER: B
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?
A. The outline criteria for professional behavior to maintain standards of integrity and
objectivity
B. To establish standards to follow for effective accounting practice.
C. To provide a framework within which accounting policies could be effectively
developed and executed.
D. The outline criteria that can be used in conducting interviews of potential new
accountants - ANSWER: A
An adequate system of internal controls is most likely to detect a fraud perpetrated
by a
A. Group of employees in collusion.
B. Single employee.
C. Group of managers in collusion.
D. Single manager. - ANSWER: B
An auditor for the state highway and safety department needs to estimate the
average highway weight of tractor-trailer trucks using the state's highway system.
Which estimation method must be used?
A. Mean-per-unit.
B. Difference.
C. Ratio.
D. Probability-proportional-to-size. - ANSWER: A
An auditor is checking the accuracy of a computer-printed inventory listing to
determine whether the total monetary value of inventory is significantly overstated.
Because there is not adequate time or resources to check all items in the
warehouse, a sample of inventory items must be used. If the sample size is fixed,
