Certified Internal Auditor (CIA)
ExamQuestions And Correct Answers
(Verified Answers) Plus Rationales
2025/2026 Q&A Instant Download Pdf
1. Which of the following best describes the primary purpose of the
internal audit function?
A) To provide management with independent assurance on risk
management, control, and governance processes
B) To manage the organization’s risk directly
C) To prepare financial statements for external reporting
D) To enforce compliance with laws and regulations
Answer: A
Internal audit provides independent assurance and consulting services designed
to improve an organization’s operations, focusing on risk, control, and
governance.
2. According to the IIA Standards, the chief audit executive (CAE) should
report functionally to:
A) The CEO
B) The audit committee or board
C) The CFO
D) The external auditors
Answer: B
Functional reporting to the board ensures independence and objectivity of the
internal audit function.
3. Which of the following is considered a primary element of governance?
A) Strategic planning
B) Internal controls
C) Risk assessment
D) Ethical values and integrity
,Answer: D
Governance involves structures and processes that promote accountability,
ethical values, and integrity in the organization.
4. The risk-based internal audit approach focuses on:
A) Auditing all operations equally
B) Prioritizing audit resources based on risk significance
C) Conducting audits randomly
D) Only auditing financial processes
Answer: B
Risk-based auditing prioritizes areas with the greatest potential impact on the
organization.
5. Which of the following is an inherent limitation of internal auditing?
A) Lack of competence
B) Audit scope restrictions
C) Absolute assurance
D) Unlimited resources
Answer: C
Internal auditing provides reasonable, not absolute, assurance due to inherent
limitations such as human error and cost constraints.
6. The International Professional Practices Framework (IPPF) is issued by:
A) IFAC
B) IIA
C) COSO
D) ISO
Answer: B
The IIA issues the IPPF, which provides the standards and guidance for internal
auditing.
7. The internal audit charter should:
A) Be optional and informal
B) Be approved by senior management and the board
C) Focus solely on financial audits
D) Replace the audit plan
, Answer: B
The charter formally defines the purpose, authority, and responsibility of the
internal audit function.
8. Which of the following is a responsibility of the board regarding
internal auditing?
A) Conduct audits directly
B) Approve the internal audit charter
C) Prepare internal control procedures
D) Manage audit findings
Answer: B
The board ensures the internal audit function is properly authorized,
independent, and effective.
9. Independence of internal auditors is primarily achieved through:
A) Technical expertise
B) Functional reporting to the board
C) Performing all audits alone
D) Following GAAP
Answer: B
Functional reporting lines to the board or audit committee support objectivity
and independence.
10.Which of the following is a key element of a risk assessment?
A) Developing audit programs
B) Identifying threats and vulnerabilities
C) Conducting employee training
D) Performing bank reconciliations
Answer: B
Risk assessment identifies the likelihood and impact of potential events that
could affect objectives.
11.Which of the following statements regarding audit evidence is true?
A) It guarantees complete accuracy of findings
B) It must be sufficient, reliable, relevant, and useful
C) It can be solely based on management assertions
D) It is optional if management provides assurances
ExamQuestions And Correct Answers
(Verified Answers) Plus Rationales
2025/2026 Q&A Instant Download Pdf
1. Which of the following best describes the primary purpose of the
internal audit function?
A) To provide management with independent assurance on risk
management, control, and governance processes
B) To manage the organization’s risk directly
C) To prepare financial statements for external reporting
D) To enforce compliance with laws and regulations
Answer: A
Internal audit provides independent assurance and consulting services designed
to improve an organization’s operations, focusing on risk, control, and
governance.
2. According to the IIA Standards, the chief audit executive (CAE) should
report functionally to:
A) The CEO
B) The audit committee or board
C) The CFO
D) The external auditors
Answer: B
Functional reporting to the board ensures independence and objectivity of the
internal audit function.
3. Which of the following is considered a primary element of governance?
A) Strategic planning
B) Internal controls
C) Risk assessment
D) Ethical values and integrity
,Answer: D
Governance involves structures and processes that promote accountability,
ethical values, and integrity in the organization.
4. The risk-based internal audit approach focuses on:
A) Auditing all operations equally
B) Prioritizing audit resources based on risk significance
C) Conducting audits randomly
D) Only auditing financial processes
Answer: B
Risk-based auditing prioritizes areas with the greatest potential impact on the
organization.
5. Which of the following is an inherent limitation of internal auditing?
A) Lack of competence
B) Audit scope restrictions
C) Absolute assurance
D) Unlimited resources
Answer: C
Internal auditing provides reasonable, not absolute, assurance due to inherent
limitations such as human error and cost constraints.
6. The International Professional Practices Framework (IPPF) is issued by:
A) IFAC
B) IIA
C) COSO
D) ISO
Answer: B
The IIA issues the IPPF, which provides the standards and guidance for internal
auditing.
7. The internal audit charter should:
A) Be optional and informal
B) Be approved by senior management and the board
C) Focus solely on financial audits
D) Replace the audit plan
, Answer: B
The charter formally defines the purpose, authority, and responsibility of the
internal audit function.
8. Which of the following is a responsibility of the board regarding
internal auditing?
A) Conduct audits directly
B) Approve the internal audit charter
C) Prepare internal control procedures
D) Manage audit findings
Answer: B
The board ensures the internal audit function is properly authorized,
independent, and effective.
9. Independence of internal auditors is primarily achieved through:
A) Technical expertise
B) Functional reporting to the board
C) Performing all audits alone
D) Following GAAP
Answer: B
Functional reporting lines to the board or audit committee support objectivity
and independence.
10.Which of the following is a key element of a risk assessment?
A) Developing audit programs
B) Identifying threats and vulnerabilities
C) Conducting employee training
D) Performing bank reconciliations
Answer: B
Risk assessment identifies the likelihood and impact of potential events that
could affect objectives.
11.Which of the following statements regarding audit evidence is true?
A) It guarantees complete accuracy of findings
B) It must be sufficient, reliable, relevant, and useful
C) It can be solely based on management assertions
D) It is optional if management provides assurances
