IIA IIA-CIA-Part1 Questions Answers

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)

When assessing the greatest risk among the provided observations in the audit of the risk management process, we must evaluate which issue could most significantly impact the organization’s ability to manage risks effectively. Here is a detailed analysis of each option:

Option A: While not reviewing identified risks for completeness in the past two years is a concern, it does not necessarily imply that new risks have not been identified or managed during that time.

Option B: Not testing controls annually to confirm operating effectiveness is a significant issue, but existing controls may still be functioning effectively.

Option C: An informal and poorly documented process to identify and evaluate new risks presents a critical weakness. This means the organization might be unaware of emerging risks, leading to unmanaged exposures that could cause significant harm.

Option D: Not ranking identified risks to establish their importance affects prioritization but does not prevent risk identification or basic management.

The greatest risk is posed by Option C because an informal and poorly documented process to identify and evaluate new risks undermines the entire risk management framework, potentially allowing significant and emerging risks to go unrecognized and unaddressed.

The Institute of Internal Auditors (IIA) Standards and Guidance on Risk Management.

COSO ERM Framework.

Best practices for minimizing resentment towards controls include involving employees in the design process of controls, transparently communicating their purpose, and how these controls benefit the organization and potentially the employees themselves. Such practices help in building a culture of compliance and acceptance, rather than resistance. Active participation and clear communication are key factors in achieving employee buy-in and minimizing resentment.

General best practices in change management and internal control implementation as advised by various management and audit frameworks, including those suggested by the IIA and related governance bodies.

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