CIA Part 1 Exam Practice Questions and answers
Mission of Internal Audit - ✔✔To enhance and protect organizational value by providing risk-
based and objective assurance, advice, and insight.
Core Principles for the Professional Practice of Internal Auditing - ✔✔Demonstrates integrity.
Demonstrates competence and due professional care.
Is objective and free from undue influence (independent).
Aligns with the strategies, objectives, and risks of the organization.
Is appropriately positioned and adequately resourced.
Demonstrates quality and continuous improvement.
Communicates effectively.
Provides risk-based assurance.
Is insightful, proactive, and future-focused.
Promotes organizational improvement.
Risk Categories - ✔✔1. Business Disruption and System Failures
2. Clients, Products, & Business Practices
3. Credit
4. Damage to Physical Assets
5. External Fraud
6. Employment Practices and Workplace Safety
7. Execution, Delivery & Process Management
8. Internal Fraud
9. Insurance
10. Market
,Types of Controls - ✔✔1. Analytical Procedures
2. Approvals and Authorizations
3. Confirmations
4. Exception Reporting and Tracking
5. Ongoing Monitoring
6. Physical Security
7. Reconciliations
8. Segregation of Duties
9. Transaction/Application Controls
10. Information and Communication
11. Risk Assessment
12. Training
Definition of Internal Auditing - ✔✔Internal auditing is an independent, objective assurance and
consulting activity designed to add value and improve an organization's operations. It helps an
organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate
and improve the effectiveness of risk management, control, and governance processes.
Code of Ethics — Principles - ✔✔1. Integrity
2. Objectivity
3. Confidentiality
4. Competency
Integrity - ✔✔Internal auditors:
Shall perform their work with honesty, diligence, and responsibility.
,Shall observe the law and make disclosures expected by the law and the profession.
Shall not knowingly be a party to any illegal activity, or engage in acts that are discreditable to
the profession of internal auditing or to the organization.
Shall respect and contribute to the legitimate and ethical objectives of the organization.
Objectivity - ✔✔Internal auditors:
Shall not participate in any activity or relationship that may impair or be presumed to impair
their unbiased assessment. This participation includes those activities or relationships that may
be in conflict with the interests of the organization.
Shall not accept anything that may impair or be presumed to impair their professional
judgment.
Shall disclose all material facts known to them that, if not disclosed, may distort the reporting of
activities under review.
Confidentiality - ✔✔Internal auditors:
Shall be prudent in the use and protection of information acquired in the course of their duties.
Shall not use information for any personal gain or in any manner that would be contrary to the
law or detrimental to the legitimate and ethical objectives of the organization.
Competency - ✔✔Internal auditors:
, Shall engage only in those services for which they have the necessary knowledge, skills, and
experience.
Shall perform internal audit services in accordance with the International Standards for the
Professional Practice of Internal Auditing (Standards).
Shall continually improve their proficiency and the effectiveness and quality of their services.
Add Value - ✔✔The internal audit activity adds value to the organization (and its stakeholders)
when it provides objective and relevant assurance, and contributes to the effectiveness and
efficiency of governance, risk management, and control processes.
Adequate Control - ✔✔Present if management has planned and organized (designed) in a
manner that provides reasonable assurance that the organization's risks have been managed
effectively and that the organization's goals and objectives will be achieved efficiently and
economically.
Assurance Services - ✔✔An objective examination of evidence for the purpose of providing an
independent assessment on governance, risk management, and control processes for the
organization. Examples may include financial, performance, compliance, system security, and
due diligence engagements.
Board - ✔✔The highest level of governing body charged with the responsibility to direct and/or
oversee the activities and management of the organization. Typically, this includes an
independent group of directors (e.g., a board of directors, a supervisory board, or a board of
governors or trustees). If such a group does not exist, the "board" may refer to the head of the
organization. "Board" may refer to an audit committee to which the governing body has
delegated certain functions.
Charter - ✔✔A formal document that defines the internal audit activity's purpose, authority,
and responsibility. The internal audit charter establishes the internal audit activity's position
Mission of Internal Audit - ✔✔To enhance and protect organizational value by providing risk-
based and objective assurance, advice, and insight.
Core Principles for the Professional Practice of Internal Auditing - ✔✔Demonstrates integrity.
Demonstrates competence and due professional care.
Is objective and free from undue influence (independent).
Aligns with the strategies, objectives, and risks of the organization.
Is appropriately positioned and adequately resourced.
Demonstrates quality and continuous improvement.
Communicates effectively.
Provides risk-based assurance.
Is insightful, proactive, and future-focused.
Promotes organizational improvement.
Risk Categories - ✔✔1. Business Disruption and System Failures
2. Clients, Products, & Business Practices
3. Credit
4. Damage to Physical Assets
5. External Fraud
6. Employment Practices and Workplace Safety
7. Execution, Delivery & Process Management
8. Internal Fraud
9. Insurance
10. Market
,Types of Controls - ✔✔1. Analytical Procedures
2. Approvals and Authorizations
3. Confirmations
4. Exception Reporting and Tracking
5. Ongoing Monitoring
6. Physical Security
7. Reconciliations
8. Segregation of Duties
9. Transaction/Application Controls
10. Information and Communication
11. Risk Assessment
12. Training
Definition of Internal Auditing - ✔✔Internal auditing is an independent, objective assurance and
consulting activity designed to add value and improve an organization's operations. It helps an
organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate
and improve the effectiveness of risk management, control, and governance processes.
Code of Ethics — Principles - ✔✔1. Integrity
2. Objectivity
3. Confidentiality
4. Competency
Integrity - ✔✔Internal auditors:
Shall perform their work with honesty, diligence, and responsibility.
,Shall observe the law and make disclosures expected by the law and the profession.
Shall not knowingly be a party to any illegal activity, or engage in acts that are discreditable to
the profession of internal auditing or to the organization.
Shall respect and contribute to the legitimate and ethical objectives of the organization.
Objectivity - ✔✔Internal auditors:
Shall not participate in any activity or relationship that may impair or be presumed to impair
their unbiased assessment. This participation includes those activities or relationships that may
be in conflict with the interests of the organization.
Shall not accept anything that may impair or be presumed to impair their professional
judgment.
Shall disclose all material facts known to them that, if not disclosed, may distort the reporting of
activities under review.
Confidentiality - ✔✔Internal auditors:
Shall be prudent in the use and protection of information acquired in the course of their duties.
Shall not use information for any personal gain or in any manner that would be contrary to the
law or detrimental to the legitimate and ethical objectives of the organization.
Competency - ✔✔Internal auditors:
, Shall engage only in those services for which they have the necessary knowledge, skills, and
experience.
Shall perform internal audit services in accordance with the International Standards for the
Professional Practice of Internal Auditing (Standards).
Shall continually improve their proficiency and the effectiveness and quality of their services.
Add Value - ✔✔The internal audit activity adds value to the organization (and its stakeholders)
when it provides objective and relevant assurance, and contributes to the effectiveness and
efficiency of governance, risk management, and control processes.
Adequate Control - ✔✔Present if management has planned and organized (designed) in a
manner that provides reasonable assurance that the organization's risks have been managed
effectively and that the organization's goals and objectives will be achieved efficiently and
economically.
Assurance Services - ✔✔An objective examination of evidence for the purpose of providing an
independent assessment on governance, risk management, and control processes for the
organization. Examples may include financial, performance, compliance, system security, and
due diligence engagements.
Board - ✔✔The highest level of governing body charged with the responsibility to direct and/or
oversee the activities and management of the organization. Typically, this includes an
independent group of directors (e.g., a board of directors, a supervisory board, or a board of
governors or trustees). If such a group does not exist, the "board" may refer to the head of the
organization. "Board" may refer to an audit committee to which the governing body has
delegated certain functions.
Charter - ✔✔A formal document that defines the internal audit activity's purpose, authority,
and responsibility. The internal audit charter establishes the internal audit activity's position
