IIA-CIA-Part1 Exam Dumps - IIA CIA Questions and Answers

According to IIA guidance, the chief audit executive is required to report the results of the quality assurance and improvement program, including external assessments, at least annually. This ensures that the board and senior management are kept informed about the internal audit activity’s conformance with the Standards and other aspects of audit quality.

IIA's International Standards for the Professional Practice of Internal Auditing on Quality Assurance and Improvement.

According to IIA guidance, due professional care means that internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor. This involves considering the cost of assurance in relation to potential benefits and exercising judgment and care in accordance with the complexity of the task. It does not imply an exhaustive review of all transactions or guarantees that all significant risks will be identified or that fraud does not exist.

The Institute of Internal Auditors (IIA) - International Standards for the Professional Practice of Internal Auditing, specifically those related to due professional care.

According to the IIA's standards on proficiency, the Chief Audit Executive (CAE) should consider primarily how well the skills and experience of a new auditor complement those of the existing audit team. This ensures a diverse and comprehensive skill set within the audit team, aligning with the Standard 1210.A2, which stipulates that the internal audit activity collectively should possess or obtain the knowledge, skills, and other competencies needed to perform its responsibilities.

Institute of Internal Auditors (IIA) Standards, specifically Standard 1210 on Proficiency.

The inclusion of a clause in each engagement report stating that the engagement conforms with the International Standards for the Professional Practice of Internal Auditing is justified if the internal audit activity's policies and engagement records provide relevant, sufficient, and competent evidence that this statement is correct. This indicates that the internal audit activity consistently applies the standards in its engagements and the quality assurance and improvement program effectively monitors and ensures this conformance.

IIA Standard 1300: "Quality Assurance and Improvement Program"

When deciding whether to rely on the work of internal auditors, external auditors often assess the objectivity of the internal audit activity. Objectivity assures that audits are performed impartially and without bias, which enhances the credibility of the audit work. This assessment is crucial for determining the reliability of the internal audit function's work for external audit purposes.

IIA Standard 1220: Objectivity, and external auditing standards regarding the use of internal auditors' work.

The use of due professional care by the internal audit activity is best demonstrated by internal auditors undertaking the necessary training to complete their audit work. Due professional care involves applying the diligence and judgment needed to conduct audits effectively. This includes continuous training and development to ensure auditors are proficient in their field and up-to-date with relevant audit standards, technologies, and methodologies, which aligns with the International Standards for the Professional Practice of Internal Auditing from the Institute of Internal Auditors (IIA).

The Institute of Internal Auditors (IIA) - International Standards for the Professional Practice of Internal Auditing

If a CAE has no direct access to the board, the most appropriate action, according to IIA guidance, is to maintain communication with the board through written communications. This method ensures that the board is informed of relevant audit findings and issues, upholding the governance role of the internal audit function even without direct access. This approach aligns with IIA standards on communicating and reporting to senior management and the board.

The Institute of Internal Auditors (IIA) - International Standards for the Professional Practice of Internal Auditing, specifically standards related to communication and reporting.

A chief audit executive failing to perform a risk assessment prior to preparing the audit plan demonstrates nonconformance with the Standards. According to IIA standards, specifically Standard 2010 – Planning, a risk assessment must inform the audit plan, ensuring that resources are appropriately directed towards areas of higher risk. References: IIA Standard 2010: Planning, which mandates the requirement for risk assessments in audit planning.

The quality assurance and improvement program (QAIP) should include both internal assessments performed by staff and external assessments performed by independent, objective individuals. This ensures that the internal audit activity maintains high standards of quality and adheres to professional guidelines.

Option A: The QAIP must include ongoing internal assessments and external assessments every five years, not necessarily every three years.

Option B: While ongoing self-assessments are part of QAIP, external assessments by independent assessors are also required.

Option D: The board may set scoping limitations, but the comprehensive nature of QAIP includes both internal and external evaluations without board-imposed restrictions.

IIA Standard 1300: Quality Assurance and Improvement Program.

IIA Standard 1312: External Assessments.

The key principles approach to risk management involves evaluating whether the organization's risk management practices align with fundamental principles, such as being an integral part of decision making, being transparent, responsive to change, and addressing uncertainty. This approach focuses on assessing the adherence to core risk management principles rather than specific processes or maturity levels.

The maturity model approach (A) assesses the level of sophistication and development of risk management practices. The process element approach (B) evaluates specific components of the risk management process. The key performance indicators approach (D) focuses on using specific metrics to gauge the effectiveness of risk management.

The internal auditor’s focus on the integration of risk management into decision making and its responsiveness to change aligns with the key principles approach as outlined in IIA guidance on risk management frameworks.

IIA Practice Guide: Assessing the Adequacy of Risk Management Using ISO 31000

IIA Position Paper: The Role of Internal Auditing in Enterprise-Wide Risk Management

The first step in conducting a fraud risk assessment is to identify relevant fraud risk factors (Option A). This involves understanding the internal and external factors that could influence the likelihood and impact of fraud within the organization. Identifying these risk factors sets the foundation for subsequent steps, such as identifying potential fraud schemes, existing controls, and red flags. This approach aligns with the guidance provided in the IIA's Practice Guide on Managing the Business Risk of Fraud, which outlines the process of conducting comprehensive fraud risk assessments starting with identifying risk factors.

IIA Practice Guide: Managing the Business Risk of Fraud

COSO Framework for Fraud Risk Management

According to IIA guidance, the most effective training method in assisting new entry-level internal auditors in achieving competence with internal audit practices is involvement in a variety of audit assignments. Hands-on experience across different audits allows new auditors to apply theoretical knowledge practically, learn from real-world scenarios, and develop a deeper understanding of audit processes and challenges.

IIA standards and educational guidelines on auditor training and development, which advocate for practical experience as a key component of effective learning.

The most likely action a chief audit executive would take to identify gaps in the internal audit activity’s knowledge, skills, and competencies is to complete a skills assessment of the internal audit activity based on The IIA Global Internal Audit Competency Framework. This framework provides a structured and comprehensive approach to assess the current capabilities and identify any areas requiring improvement or development within the audit team.

The Institute of Internal Auditors (IIA) - Global Internal Audit Competency Framework.

The most suitable approach for an organization with limited resources to spend on corporate social responsibility (CSR) initiatives is to select initiatives that support the overall strategic goals of the organization. Aligning CSR initiatives with the organization's strategic goals ensures that resources are used effectively and contribute to long-term value creation. This approach helps in enhancing the organization's reputation, stakeholder engagement, and competitive advantage by focusing on areas where the organization can make the most significant impact in alignment with its mission and values.

The IIA Standards: Standard 2010 – Planning: "The chief audit executive must establish a risk-based plan to determine the priorities of the internal audit activity, consistent with the organization's goals."

IIA Practice Guide: "Assessing Organizational Governance in the Public Sector": Highlights the importance of aligning initiatives with strategic goals for effective governance.