Free IIA-CIA-Part2 Practice Test Questions 2026

A chief audit executive (CAE) following up on action plans from previously completed audits identifies that management has determined that certain action plans are no longer necessary If the CAE disagrees with managements decision, which of the following is the most appropriate next step for the CAE to take?

A. The CAE must discuss the matter with senior management

B. The CAE must discuss the matter with key shareholders.

C. The CAE must discuss the matter with legal counsel.

D. The CAE must discuss the matter with the board

The internal audit activity is planning an assurance engagement for a foreign subsidiary. According to IIA guidance, which of the following would be included in the preliminary communication to management of the area under review?

A. The scope of the engagement, the estimated time frame, and the names of the auditors.

B. The estimated time frame, the names of the auditors, and the resources and travel budget.

C. The names of the auditors, the resources and travel budget, and the scope of the engagement.

D. The resources and travel budget, the scope of the engagement, and the estimated time frame.

The external auditor has identified a number of production process control deficiencies involving several departments. As a result, senior management has asked the internal audit activity to complete internal control training for all related staff. According to IIA guidance, which of the following would be the most appropriate course of action for the chief audit executive to follow?

A. Refuse to accept the consulting engagement because it would be a violation of independence.

B. Collaborate with the external auditor to ensure the most efficient use of resources.

C. Accept the engagement but hire an external training specialist to provide the necessary expertise.

D. Accept the engagement even if the audit engagement staff was previously responsible for operational areas being trained.

During audit engagement planning, an internal auditor is determining the best approach for leveraging computer-assisted audit techniques (CAATs). Which of the following approaches maximizes the use of CAATs and why?

A. Tracing, because it would enable the auditor to verify quickly that the record counts were properly included in the compilation.

B. Inspection, because it would enable the auditor to verify how management enters the data into the application for processing.

C. Testing data, because it would enable the auditor to ensure that the application processes the transaction as described by management.

D. Reperformance, because it enables the auditor to verify that the application performed the calculation correctly.

Which of the following best describes the internal audit activity's responsibility within a risk and control framework?

A. The internal audit activity constitutes the first line of defense in effective risk management.

B. The internal audit activity provides direction regarding internal controls implementation.

C. The internal audit activity verifies that management has met its responsibility for implementing effective controls.

D. The internal audit activity implements the internal control framework and advises management regarding best practices

The internal audit manager has been delegated the task of preparing the annual internal audit plan for the forthcoming fiscal year All engagements should be appropriately categorized and presented to the chief audit executive for review Which of the following would most likely be classified as a consulting engagement?

A. Evaluating procurement department process effectiveness

B. Helping in the design of the risk management program

C. Assessing financial reporting control adequacy

D. Reviewing environmental, social, and governance reporting compliance

An internal audit activity has to confirm the validity of the activities reported by a grantee that received a charitable contribution from the organization. Which of the following methods would best help meet this objective?

A. Visiting the grantee to assess whether the execution of the project was in line with the defined grant scope.

B. Verifying that the grantee's final report is in line with what was depicted in the initial budget request.

C. Reconciling general ledger accounts used by management of the area under review for reflecting expenses on charitable contributions.

D. Interviewing employees of the corporate affairs department, which is responsible for charitable activities.

An internal auditor is performing a review of an organization's vendor for any possible conflicts of interest. Which of the following would provide the greatest assistance to the auditor in meeting this objective?

A. Vendor contracts.

B. Employee master list.

C. Payment records.

D. Purchasing policy.

What type of audit engagement would be the most appropriate to determine how an organization could be more profitable in the long term?

A. Operational audit

B. Compliance and financial audit

C. Performance audit

D. Quality audit

Which of the following behaviors could represent a significant ethical risk if exhibited by an organization's board?

1. Intervening during an audit involving ethical wrongdoing.

2. Discussing periodic reports of ethical breaches.

3. Authorizing an investigation of an unsafe product.

4. Negotiating a settlement of an employee claim for personal damages.

A. 1 and 2

B. 1 and 4

C. 2 and 3

D. 3 and 4

Which of the following are advantages of flowcharts over internal control questionnaires''

1 Flowcharts reduce the need to test whether employees are observing internal control processes

2 Flowcharts provide a visual depiction of the processes in the area under review

3.Flowcharts identify and prioritize internal control design weaknesses.

4 Flowcharts highlight the control points to help internal auditors evaluate control design

A. 1 and 3 only

B. 2 and 4 only.

C. 1.2. and 3 only

D. 2. 3 and 4 only

Which of the following statistical sampling approaches is the most appropriate for testing a population for fraud?

A. Discovery sampling.

B. Stop-or-go sampling.

C. Haphazard sampling.

D. Stratified attribute sampling.