Free IIA-CIA-Part1 Practice Test Questions 2026

During an assurance engagement, an internal auditor identified that a developer of the organization's enterprise resource planning (ERP) system had intentionally modified the production code to commit a fraudulent transaction. Which control activity should be implemented to prevent such issues in the future?

A. Segregate duties between code development and migrating changes into production.

B. Conduct fraud training for the IT team responsible for the ERP system.

C. Penalize the developer who committed the fraud by terminating employment.

D. Restrict developers' access to the ERP system's test environment.

Which of the following is the best reason why the engagement supervisor should take care in explaining to local management the criteria that will be used to measure the effectiveness of the control environment?

A. The assessment will cover soft controls and company values.

B. The assessment will focus on the policy for a particular process.

C. The assessment will lack a defined scope

D. The assessment will probably uncover fraud risks.

Which of the following scenarios would most likely impair the independence of an internal audit activity?

A. A relative of an internal audit team member works m a department being reviewed

B. The internal audit budget is reduced by management requiring the removal of all lTrelated engagements from the audit plan

C. An audit manager removes a finding from the draft report due to disagreements with the chief financial officer

D. The operating effectiveness of a control is reported as 'satisfactory." because no concerns were identified during planning

A chief audit executive (CAE) has just joined an organization with an existing internal audit activity. Based on her review of the current organizational structure, the CAE determines that the internal audit activity lacks adequate independence. Which of the following actions is the CAE's best step to take next to move the internal audit activity toward organizational independence?

A. Ensure the limitations are disclosed through communication with the board and senior management, so that the internal audit activity can continue operating under the same organizational structure.

B. Request that the board restructure the reporting line of the internal audit activity to ensure the CAE has unrestricted access to the board.

C. Rotate internal audit assignments among members of the internal audit activity to minimize the effects of the current structure.

D. Train internal auditors about organizational independence and have them sign an acknowledgment of understanding.

According to HA guidance, if an internal auditor suspects fraud during an assurance engagement, what should the auditor do first?

A. Recommend parties involved to be sanctioned in accordance with the organization's policy.

B. Determine whether any additional audit work needs to be performed.

C. Launch an investigation to obtain details of the fraud and parties involved.

D. Request that the responsible process owner remediate the issue immediately.

As part of a fraud investigation by regulators, a court order was issued to a bank. The court order requested the chief audit executive (CAE) to provide access to a number of audit reports and workpapers, some of which included customers' confidential information such as transaction activity and other personal details. What is the appropriate response by the CAE?

A. Reject the court order, citing a potential breach of customers' confidentiality agreement

B. Consult with legal counsel to determine what information to provide.

C. Respond promptly and provide all that was requested by the court order.

D. Seek permission from customers prior to sharing their information.

A newly appointed chief audit executive (CAE) started analyzing the organization's policies in an attempt to customize them to address internal audit specifics. Which of the following organizationwide practices is most likely to be acceptable to the CAE?

A. Internal auditors1performance evaluation is primarily based on both client satisfaction surveys and cost savings identified from the audits.

B. Standard training for each employee, including internal auditors, is 10 hours per year.

C. To enhance efficiency, internal auditors should not be rotated regularly among engagements.

D. Hiring practices include requiring potential auditors to disclose any significant stock ownership in the organization.

Which of the following best describes the type of risk that an adequately designed and effectively operating system of internal controls should mitigate?

A. Net.

B. Controllable.

C. inherent,

D. Residual.

Upon joining the internal audit activity, each new auditor receives a copy of the audit handbook. Which of the following handbook policies has the greatest risk of compromising audit objectivity?

A. Internal auditors should obtain 80 hours of continuing professional education every two years, 20 of which should be audit-related, and the remainder may be operations-related.

B. Internal auditors should rotate to other areas of the organization for nonaudit assignments to gain an understanding of the organization's operations.

C. Internal auditors should have direct and unrestricted access to personnel and information throughout the organization and the governing board.

D. Internal auditors should undergo annual performance appraisals conducted by the chief audit executive, who reports administratively to the chief financial officer.

An internal auditor failed to identify transactions between the parent organization and a subsidiary. What is the most likely reason for the failure?

A. The auditor misunderstood the audit objectives.

B. The auditor lacked professional skepticism.

C. The auditor's fieldwork was not properly supervised.

D. The auditor lacked an understanding of the organization.

An internal audit team was assigned to review the organization's information security protocol. After fieldwork was completed, an internal auditor identified an error in the review of security access. The error could affect the overall results of the engagement. Which of the following is the most appropriate course of action for the internal auditor?

A. Proceed with addressing the error and report any corrections to the engagement supervisor during the scheduled exit meeting.

B. Issue the audit report to senior management on schedule but include a disclaimer about the error.

C. Proceed with the scheduled closing of the engagement without consideration of the identified error.

D. Inform the engagement supervisor of the error and allow the supervisor to determine the appropriate action to take.

Which of the following characteristics is typical of the internal audit activity?

A. Serves third parties that need reliable financial information from audit engagements

B. Responds to the needs and desires of senior management and the board, but remains independent of areas under review

C. Ensures the organization complies with laws and regulations in the area under review

D. Is completely independent of senior management, the board and the area under review