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IIA IIA-CHAL-QISA Exam Actual Questions
Qualified Info Systems Auditor CIA Challenge (Page 3 )

Updated On: 17-Jul-2026
Page 3 of 31
PDF with 150 Questions

The board of directors of a global organization has found an increased number of reported cases of unethical practices since last year. To assist the board in gaining a better understanding of the degree of ethics awareness within the organization, which of the following actions should be undertaken?

  1. Request the internal audit activity to perform an ethics-related assurance engagement.
  2. Offer in-house ethics-related training seminars for employees to attend
  3. Reaffirm the importance of the organization's code of ethics to all employees
  4. Conduct an organization wide employee survey on ethical practices.

Answer(s): D

Explanation:

To assist the board of directors in understanding the degree of ethics awareness within the organization, an organization-wide employee survey on ethical practices (option D) is the most effective action. Here's why:
Direct Insight from Employees: Surveys can capture the perspectives of a broad employee base, providing direct insights into the awareness and attitudes towards ethics within the organization. Quantitative and Qualitative Data: A well-designed survey can gather both quantitative data (e.g.,

percentage of employees aware of the code of ethics) and qualitative data (e.g., specific instances of ethical dilemmas faced by employees).
Identifying Areas of Improvement: Surveys can identify specific areas where employees feel the organization is lacking in terms of ethical practices, which can guide targeted improvements. Confidentiality and Anonymity: Surveys often ensure confidentiality and anonymity, encouraging more honest and comprehensive responses from employees, which might not be achievable through other means.
Comprehensive Scope: Compared to internal audits or training, surveys can provide a comprehensive overview of the entire organization's ethical climate, from various departments and levels.
This approach aligns with the best practices in internal auditing and organizational assessments as outlined by the Institute of Internal Auditors (IIA) and other related guidance.



According to IIA guidance, which of the following best describes the purpose of a planning memorandum for an audit engagement?

  1. It documents the audit steps and procedures to be performed.
  2. it documents preliminary information useful to the audit team.
  3. It documents events that could hinder the achievement of process objectives.
  4. It documents existing measures that manage risks in the area under review

Answer(s): A

Explanation:

The planning memorandum serves as a comprehensive blueprint for an audit engagement, outlining the specific steps, procedures, and strategies that will be employed to carry out the audit. According to IIA guidance, the purpose of this document is to ensure that the audit team is well-prepared and that the audit process is systematic and thorough.
Documentation of Audit Steps and Procedures: The primary purpose of a planning memorandum is to detail the steps and procedures that the audit team will follow. This ensures consistency and clarity throughout the audit process and provides a clear framework for team members to follow.


Reference:

IIA's International Standards for the Professional Practice of Internal Auditing (Standards), Standard 2201 ­ Planning Considerations, which states that the internal auditor must develop and document a plan for each engagement, including the engagement's objectives, scope, timing, and resource allocations.
Preparation and Coordination: It serves as a preparatory document that helps in coordinating the activities of the audit team, ensuring that everyone is aware of their roles and responsibilities. Practical Example: If an audit is being conducted on the financial reporting processes, the planning memorandum would include specific procedures for testing internal controls over financial reporting, timelines for each phase of the audit, and responsibilities assigned to each team member. Risk Management: While it includes information on preliminary risks, its main focus is on documenting the audit steps rather than managing risks or existing measures, which would be covered in other documents or sections of the audit plan. Clarification: Options B, C, and D may include elements found within broader audit planning, but the planning memorandum specifically focuses on the procedural roadmap. Conclusion: The correct answer is A, as the planning memorandum's primary function is to document the audit steps and procedures to be performed, ensuring a structured and organized approach to the audit engagement.



Management would like to self-assess the overall effectiveness of the controls in place for its 200- person manufacturing department Which of the following client-facilitated approaches is likely to be the most efficient way to accomplish this objective?

  1. Workshops.
  2. Surveys.
  3. Interviews.
  4. Observation.

Answer(s): B

Explanation:

Self-assessment of controls can be efficiently conducted using various client-facilitated approaches. The choice of method depends on factors such as the size of the department, the nature of the controls, and the need for comprehensive feedback.
Efficiency in Large Groups: Surveys are particularly effective for large groups (such as a 200-person department) as they allow for the collection of data from many individuals quickly and efficiently.


Reference:

IIA Practice Guide on "Control Self-Assessment," which suggests using surveys for broad- based data collection when assessing control effectiveness across larger groups. Standardized Feedback: Surveys provide standardized questions, ensuring consistent data collection and making it easier to analyze the responses.
Practical Example: A survey might include questions rating the effectiveness of different control measures on a scale, allowing management to identify areas of strength and weakness. Anonymity and Honest Responses: Surveys can be conducted anonymously, encouraging more honest and candid feedback from employees who might hesitate to speak openly in workshops or interviews.
Advantage: This anonymity can lead to more accurate assessments of the controls' effectiveness, as employees might feel more comfortable pointing out issues without fear of repercussions.
Comparison to Other Methods:
Workshops (A): While useful for in-depth discussions, they are time-consuming and less efficient for large groups.
Interviews (C): Provide detailed insights but are also time-consuming and not practical for a 200- person department.
Observation (D): Useful for firsthand assessment but not efficient for gathering widespread feedback across a large department.
Conclusion: The correct answer is B, as surveys are the most efficient method for self-assessing the overall effectiveness of controls in a large department, offering a balance of broad coverage, standardized data, and anonymity.



According to IIA guidance, which of the following statements is true regarding due professional care?

  1. Internal auditors must exercise due professional care to ensure that all significant risks will be identified.
  2. Internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor.
  3. Due professional care requires the internal auditor to conduct extensive examinations and verifications to ensure fraud does not exist.
  4. Due professional care is displayed during a consulting engagement when the internal auditor focuses on potential benefits of the engagement rather than the cost

Answer(s): B

Explanation:

Due professional care is a critical concept in internal auditing, ensuring that auditors conduct their work with the necessary diligence and competence.
Definition and Standards: According to the IIA's International Standards for the Professional Practice of Internal Auditing (Standards), specifically Standard 1220 ­ Due Professional Care, internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor.


Reference:

Standard 1220 emphasizes that internal auditors must consider the extent of work needed to achieve the engagement's objectives and the cost of assurance in relation to potential benefits.
Expectation of Competence: The standard requires auditors to use their professional judgment and to exercise the level of skill and care that a reasonably prudent internal auditor would use in similar circumstances.
Practical Example: This includes evaluating the nature and complexity of the engagement, the adequacy and effectiveness of risk management, and control processes relevant to the engagement. Comprehensive, Not Excessive: While due professional care involves being thorough, it does not mandate exhaustive procedures such as those implied in options A and C. Clarification: Option A overstates the requirement by implying that all significant risks must be identified, which is not always feasible.
Clarification: Option C misinterprets due professional care by suggesting that extensive examinations and verifications to ensure fraud does not exist are always necessary, which is beyond the typical scope of many audits.
Cost vs. Benefit in Consulting: Option D refers to consulting engagements and the consideration of benefits over cost, which is a part of due professional care but does not capture the comprehensive expectation of care and skill.
Clarification: Due professional care in consulting engagements is about balancing benefits and costs but also involves ensuring quality and thoroughness appropriate to the engagement's objectives. Conclusion: The correct answer is B, as it accurately reflects the IIA's guidance that internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor.



According to the IIA Code of Ethics, which of the following is required with regard to communicating results?

  1. The internal auditor should present material information to appropriate personnel within the organization without revealing confidential matters that could be detrimental to the organization
  2. The internal auditor should disclose all material information obtained by the date of the final engagement communication.
  3. The internal auditor should obtain all material information within the established time and budget parameters.
  4. The internal auditor should reveal material facts that could potentially distort the reporting of activities under review

Answer(s): D

Explanation:

The IIA Code of Ethics sets forth principles and expectations for ethical behavior in internal auditing,

particularly regarding the communication of results.
Integrity and Transparency: According to the IIA Code of Ethics, internal auditors are expected to exhibit integrity and transparency in their reporting, ensuring that material facts are disclosed accurately to avoid misrepresentation.


Reference:

IIA Code of Ethics, Principle 4 ­ Integrity, which emphasizes the need for internal auditors to disclose all material facts known to them that, if not disclosed, could distort the reporting of activities under review.
Revealing Material Facts: The principle of integrity mandates that internal auditors must reveal material facts necessary to avoid any misrepresentation of the activities being reviewed. This ensures that stakeholders receive a truthful and complete picture of the audit findings. Practical Example: If an auditor discovers significant control weaknesses that could impact financial reporting, these must be disclosed in the audit report to provide a true representation of the entity's control environment.
Confidentiality and Appropriateness: While confidentiality is important, it does not supersede the need to report material facts that are essential for accurate reporting. Confidential matters that are not material or do not distort the reporting can be withheld to protect sensitive information. Clarification: Option A incorrectly suggests that all confidential matters can be withheld even if they are material and could distort reporting, which contradicts the principle of integrity. Comprehensive Disclosure: The requirement to disclose all material information by the date of the final engagement communication (Option B) and obtaining all material information within established parameters (Option C) are important but secondary to the fundamental ethical obligation to ensure accurate and truthful reporting.
Clarification: These options focus on procedural aspects rather than the core ethical obligation of integrity and accurate reporting.
Conclusion: The correct answer is D, as it aligns with the IIA Code of Ethics requirement that internal auditors should reveal material facts that could potentially distort the reporting of activities under review, ensuring transparency and integrity in their communications.



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