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Latest IIA-CIA-Part1 Exam Dumps Questions
The dumps for IIA-CIA-Part1 exam was last updated on May 07,2025 .
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Which aspect of an internal audit charter relates to the reporting structure for the internal audit activity?
Explanation: The organization aspect of an internal audit charter relates to the reporting structure for the internal audit activity. It establishes the position of the internal audit activity within the organization, and defines its functional and administrative reporting lines2. The organization aspect also ensures that the internal audit activity has sufficient independence and authority to perform its work effectively and objectively3. Reference: 1: Internal Audit Charter [A Complete Guide + Template] - ModelOrganization2 2: The Internal Audit Charter IIA POSITION PAPER The Internal Audit Charter Blueprint to Assurance Success Introduction One of the great challenges every organization faces is assuring efficient and effective risk management D those policies and processes designed to leverage or mitigate risks to the organization’s advantage. When done well, internal audit provides that assurance as part of its role to protect and enhance organizational value. For internal audit to operate at the highest levels, it must have clearly defined and articulated marching orders from the governing body and management. This is most easily achieved with a well-designed internal audit charter. The IIA’s Perspective Every organization can benefit from internal audit, and an internal audit charter is vital to success of the activity (IIA Standard 1000). The charter is a formal document approved by the governing body and/or audit committee (governing body) and agreed to by management. It must define, at minimum: Internal audit’s purpose within the organization. Internal audit’s authority. Internal audit’s responsibility. Internal audit’s position within the organization. The IIA has produced model charters available to IIA members here in eight languages. Why the Internal Audit Charter Is Important The charter provides the organization a blueprint for how internal audit will operate and helps the governing body to clearly signal the value it places on internal audit’s independence. Ideally it establishes reporting lines for the chief audit executive (CAE) that support that independence by reporting functionally to the governing body (or those charged with governance) and administratively to executive management. It also provides the activity the needed authority to achieve its tasks, e.g., unfettered access to records, personnel, and physical properties relevant to performing its work. KEY TAKEAWAYS The internal audit charter is vital to internal audit’s success and should be reviewed annually by the governing body. The internal audit charter should be approved by the governing body and agreed to by senior management. The charter should at a minimum include internal audit’s purpose and mission, authority, responsibility, its independent reporting relationships, scope and requirement to conform to IIA Standards. The internal audit charter should include details of how the internal audit activity will assess and report on the quality of the internal audit activity.1 3: Charter | Internal Audit4
Which of the following engagements would be considered an appropriate consulting service?
Explanation: The most appropriate consulting service from the options provided is facilitating biannual training of the risk management team in risk identification methodologies. This is considered a consulting activity because it involves adding value and improving the organization's operations through training and development, a supportive role that falls squarely within the scope of consulting services as defined by the IIA. Reference: IIA guidance on the nature of consulting services provided by internal audit activities.
In a retail organization, sales teams compete with each other to achieve and exceed sales targets. Each quarter, the members of the top sales team receive a bonus. In this environment, management should closely monitor for the emergence of which of the following potential risks?
Explanation: In a competitive retail environment where sales teams are incentivized to meet or exceed targets, there is a significant risk of data manipulation. Employees may falsify sales records, inflate numbers, or engage in other unethical behaviors to ensure they receive bonuses. This is a common issue in environments with high stakes and rewards tied to performance metrics, as the pressure to succeed can lead individuals to manipulate data to appear more successful than they actually are. Therefore, management should closely monitor data integrity and implement strong controls to detect and prevent such manipulation. Reference: The IIA’s International Standards for the Professional Practice of Internal Auditing (Standards), specifically Standard 2120 - Risk Management, and COSO’s Internal Control - Integrated Framework.
Which of the following best describes the differences between internal auditors and external auditors?
Explanation: The best description of the differences between internal and external auditors is that external auditors focus on the accuracy and understandability of financial statements, while internal auditors help the organization accomplish its objectives by evaluating and improving the effectiveness of the control process. This distinction highlights the broader scope of internal audit activities, which extend beyond financial accuracy to include operational effectiveness, risk management, and internal control efficiency. Reference: Common distinctions between internal and external audit roles as discussed in auditing literature and IIA guidance.
A newly appointed chief audit executive (CAE) is tasked with creating a new internal audit activity within the organization. Which of the following would the CAE need to include in the new internal audit charter?
Explanation: An internal audit charter is a formal document that defines the internal audit activity's purpose, authority, and responsibility. According to IIA standards, the charter should also establish the internal audit activity's position within the organization, including the nature of the chief audit executive's functional reporting relationship with the board. This helps ensure that the internal audit activity has sufficient authority and resources, and that there is appropriate oversight by the board. Reference: The Institute of Internal Auditors (IIA) - International Professional Practices Framework (IPPF) - Standards regarding audit charter
Exam Code: IIA-CIA-Part1 Q & A: 757 Q&As Updated: May 07,2025
