Free IIA-CIA-Part1 Practice Test Questions 2026

An internal auditor assigned to a supplier management process engagement reviews the risk assessment with the process owner The auditor inquires about the risk response for potentially engaging unqualified third-party service providers The process owner responds that due diligence checks are undertaken to make sure that third parties possess requisite competencies before they are engaged Which of the following risk management techniques is the process owner using?

A. Risk avoidance

B. Risk reduction

C. Risk sharing

D. Risk acceptance

Which of the following actions would an internal auditor perform primarily during a consulting engagement of a debt collections process?

A. Reviewing journal entries for accuracy and completeness.

B. Comparing the policies and procedures to regulatory collections guidance.

C. Advising management on streamlining the recording of accounts receivable.

D. Performing a walk-through of the debt collections process to determine whether proper segregation of duties exists

An internal auditor is performing testing to gather evidence regarding an organization’s inventory account balance and is mindful of the possibility that the sample used might support the conclusion that the recorded account balance is not materially misstated when, in fact, it is. The auditor's concern best describes which of the following risks?

A. incorrect rejection risk

B. Incorrect acceptance risk.

C. Tolerable misstatement risk.

D. Anticipated misstatement risk

Which of the following offers the best evidence that the internal audit activity has achieved organizational independence?

A. An independent third party has assessed the organization's system of internal controls to be adequate and effective,

B. The chief audit executive reports both functionally and administratively to the CEO.

C. The internal audit charter is drafted properly and approved by the appropriate parties.

D. The mission statement and strategy of the internal audit activity demonstrates alignment to organizational objectives.

Considering the concepts of organization wide risk management and the system of internal controls, the internal audit activity as a whole can be considered which of the following types of control?

A. Transaction-level control.

B. Management-oversight control.

C. Governance control.

D. Process-level control.

Which of the following most accurately describes the role of the board when it comes to organizational governance?

A. Responsibility for outcome of the process.

B. Responsibility to be involved in management of the organization.

C. Responsibility to determine who is accountable for outcomes.

D. Responsibility to identify risks in the organization’s business environment

The chief audit executive of a large national retailer is reviewing the purpose and objectives of the organization's internal audit activity

Which of the following objectives is best aligned with The IIA's Mission of Internal Audit?

A. To implement a quality assurance and improvement program

B. To assess the effectiveness of internal controls over organizational assets

C. To ensure internal auditors possess the competencies needed to perform their responsibilities

D. To operate within the budget established by the board of directors

An internal auditor was assigned to work in the procurement department for six months to gam m-depth knowledge about the procurement process. Which of the following personnel development practices was applied in this situation?

A. Cosourcing

B. Inbound rotation

C. Guest auditor

D. Outbound rotation

Which of the following would most likely be classified as a consulting engagement?

A. Examining the internal control effectiveness of the marketing department

B. Assessing the adequacy of the IT system's business process design

C. Facilitating a self assessment of the organizations business risk and control identification

D. Reviewing the application controls in the human resources system

A manufacturing organization's chief audit executive (CAE) was approached by the head of security from one of the manufacturer's third party suppliers The head of security requested internal audit records from a recent audit engagement involving the third-party supplier The head of security believed those records contained information that would enable to identify employees of the third-party supplier who may be involved m fraudulent activities What is the most appropriate course of action for the CAE?

A. Obtain approval from the manufacturer's audit committee regarding the release of audit records

B. Release the records but first remove all data regarding the manufacturing organization s internal actions and procedures

C. Deny access to the records as the third party supplier s security learn should be able to investigate then own employees.

D. Consult with the manufacturer's senior management to determine whether releasing tie records would be appropriate

An internal auditor is assessing how the organization processes financial transactions and whether written policies and procedures are followed. The auditor requested to meet with certain employees to understand their related roles and responsibilities. However the employees refuse to meet with the auditor claiming they are too busy. Which of the following responses would best demonstrate the auditor's conflict-resolution skills?

A. The auditor considers the employees to be unresponsive and proceeds to document the actions and concerns as a scope limitation that can affect the engagement

B. The auditor considers other options to determine whether the employees are processing financial transactions as required by the organization

C. The auditor meets with senior management of the organization to discuss the employees' behavior and possible resolutions that would satisfy all parties

D. The auditor meets with the department supervisor and staff to discuss the employees' actions in order to obtain an understands and potential resolution

Which of the following scenarios provides the most concerning red flag or indicator of possible fraud?

A. An employee receives a bonus for perfect attendance

B. During the past 18 months three chief financial officers have left the organization after having been promoted to the position

C. The organization does not perform any due diligence research on third party service providers

D. Three competitors are highly profitable but a fourth equal in size is approaching bankruptcy limits