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IIA-CIA-Part1 - Essentials of Internal Auditing

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IIA-CIA-Part1 Questions and Answers

Question # 1

A subsidiary of the organization was preparing for an initial public offering (IPO). Af the request of the audit committee, the chief audit executive (CAE) and all senior audit staff were actively involved in the process by helping collect and validate financial data, conducting assessments, and participating in meetings with IPO advisors. Six months later, it became obvious that the IPO had to be canceled. Newly appointed audit committee members requested an assurance engagement that v/ould assess the IPO preparation process. Which of the following would be the best course of action for the chief audit executive (CAE) to take?

A.

The decision to involve auditors in the IPO was made by former audit committee members; therefore, the CAE is not responsible and can proceed with the new assignment.

B.

The CAE should reject the assignment, as such engagements are beyond the scope of auditors who are usually not familiar with root cause analysis methodology.

C.

The engagement should be undertaken by audit assistants and other junior staff members who were not involved in the IPO process.

D.

The CAE should disclose objectivity limitations to the audit committee and suggest alternatives, such as outsourcing the engagement.

Question # 2

Which of the following statements is true regarding how the scope of a consulting engagement should be established?

A.

The engagement client should be able to determine the scope to be applied to the engagement

B.

The internal auditor should establish a scope that does not impair her objectivity

C.

Any attempts by the engagement client to limit the scope should be considered a scope limitation

D.

The scope should include reviewing the effectiveness of the internal control environment

Question # 3

What is expected of internal auditors in regards to due professional care?

A.

Auditors perform assurance services without regard to cost

B.

Auditors perform assurance services effectively to identify all risks

C.

Auditors perform assurance services needed to achieve the engagement's objectives

D.

Auditors perform assurance services to guarantee all significant risks will be addressed

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