Passed Exam Today IIA-CIA-Part1

According to IIA guidance, any additional roles beyond traditional audit functions, such as being responsible for risk management and investigation, must be explicitly defined in the internal audit charter. This document, approved by senior management and the board, delineates the scope and responsibilities of the internal audit function, ensuring clarity and proper governance. Thus, if the internal audit charter stipulates such roles, it justifies the CEO’s decision.

IIA Standard 1000 - Purpose, Authority, and Responsibility

The statement that a lack of controls is acceptable if the risk is reduced to an acceptable level in some other way is true. Risk management involves identifying, assessing, and responding to risks to achieve the objectives of the organization. If a risk can be mitigated to an acceptable level through alternative means other than traditional controls, such as risk avoidance or risk transfer, this approach can be deemed acceptable.

Risk management standards and frameworks, such as COSO and ISO 31000.

Ethics are indeed not defined by laws alone; they are based on standards of conduct derived from shared principles and values. This statement most accurately reflects the nature of ethics in the context of corporate social responsibility (CSR), emphasizing that while ethics are guided by laws, they fundamentally originate from broader societal values and the ethical norms of the community.

Basic ethical principles in CSR and business ethics literature

The most accurate statement regarding the internal audit charter according to IIA guidance is that the charter must be approved by both senior management and the board. This ensures that the internal audit activity’s purpose, authority, and responsibility are clearly defined and acknowledged by the organization’s leadership, facilitating alignment with organizational governance.

The IIA’s guidance on internal audit charters, which emphasizes approval by senior management and the board as a key requirement.