IIA-CIA-Part1 IIA Exam Lab Questions

According to the International Professional Practices Framework (IPPF) issued by the Institute of Internal Auditors (IIA), the internal audit charter must be formally approved by senior management and the board. This requirement ensures that the internal audit activity has the appropriate authority, support, and independence to carry out its responsibilities effectively. The charter defines the purpose, authority, and responsibility of the internal audit activity, providing a clear framework for its operations and ensuring alignment with the organization's objectives and governance structures.

References:

The IIA Standards: Standard 1000 – Purpose, Authority, and Responsibility: "The purpose, authority, and responsibility of the internal audit activity must be formally defined in an internal audit charter, consistent with the Definition of Internal Auditing, the Code of Ethics, and the Standards. The chief audit executive must periodically review the internal audit charter and present it to senior management and the board for approval."

Before taking further action, the internal auditor should understand why management asked employees to act against policies and procedures. This could reveal underlying issues or misunderstandings that need to be addressed. References:

IIA’s International Standards for the Professional Practice of Internal Auditing.

COSO Framework on Monitoring and Risk Assessment.

Segregating duties between code development and migrating changes into production is a critical control to prevent fraudulent activities by developers. This control ensures that no single individual has the ability to develop code and deploy it to the production environment without oversight. Key benefits include:

Reducing the risk of unauthorized or malicious code changes.

Ensuring that changes are reviewed and tested by a different team before deployment.

Increasing accountability and transparency in the software development lifecycle.

By implementing this control, organizations can prevent developers from committing fraud or making unapproved changes to the ERP system, thereby protecting the integrity and security of the system.

References:

The Institute of Internal Auditors (IIA) Standards and Practice Advisories.

COBIT (Control Objectives for Information and Related Technologies) framework.

"Internal Auditing: Assurance & Advisory Services" by IIA, Chapter on IT General Controls and Segregation of Duties.

The fundamental principle of The IIA's Code of Ethics best described as performing work honestly, diligently, and responsibly is Integrity. This principle is foundational to the ethical conduct expected of internal auditors, underpinning their professional behavior and ensuring trust in their work and judgments. References: The IIA's Code of Ethics, specifically the section on Integrity, which outlines the expectation for internal auditors to work with honesty and diligence.QUESTION NO: 503

During engagement planning, an internal auditor determines that the cost of a certain test outweighs the benefit that can be expected from the results. He determines that this test can be removed from the audit work program. Which of the following did the internal auditor best demonstrate?

A. Due professional care

B. Individual objectivity

C. Proficiency

D. Internal assessment

Answer: A

The internal auditor demonstrated due professional care by deciding to remove a test from the audit work program when the cost outweighed the benefit. Due professional care involves considering the efficiency and cost-effectiveness of audit procedures in relation to the potential benefits. This decision shows prudent judgment and a focus on optimizing the value of audit activities. References: Institute of Internal Auditors (IIA) - International Professional Practices Framework (IPPF)