CIA Part 1 - Units 1-3 (gleim)
A typical code of ethical conduct for financial managers or management accountants in
an organization requires all of the following except - ANS-Subjectivity in presenting
information, preparing reports, and making analyses.
Which of the following violates The IIA's Code of Ethics core principle of competency? -
ANS-The internal auditor failed to complete the required continuing education needed to
obtain the skills necessary for the engagement.
During an engagement, an internal auditor learned that certain individuals in the
organization were involved in industrial espionage for the benefit of the organization.
According to The IIA's Code of Ethics, what is the internal auditor's proper course of
action? - ANS-Report the facts to the appropriate individuals within the organization.
Which of the following concurrent occupations could appear to subvert the ethical
behavior of an internal auditor? - ANS-Internal auditor and part-time business insurance
broker.
The nature and scope of an assurance engagement are determined by the -
ANS-Internal auditor.
In their reporting, internal auditors are required by The IIA's Code of Ethics to -
ANS-Disclose material facts known to the internal auditor that could distort the final
engagement communication if not revealed.
The Standards consist of three types of Standards. Which Standards apply to the
characteristics of providers of internal auditing services? - ANS-Attribute Standards.
Which of the following is permissible under The IIA's Code of Ethics? - ANS-Disclosing
confidential, engagement-related information that is potentially damaging to the
organization in response to a court order.
When the internal audit activity performs an assurance engagement, how many parties
are involved? - ANS-Three
Which of the following most likely constitutes a violation of The IIA's Code of Ethics? -
ANS-Auditor C is content as an internal auditor and has come to look at it as a regular
9-to-5 job. Auditor C has not engaged in continuing professional education or other
,activities to improve effectiveness during the last 3 years. However, Auditor C feels
performance of quality work is the same as before.
In their communication of results, internal auditors are required by The IIA's Code of
Ethics to - ANS-Reveal material facts that could distort communications if not revealed.
A chief audit executive (CAE) learned that a staff internal auditor provided confidential
information to a relative. Both the CAE and staff internal auditor are CIAs. Although the
internal auditor did not benefit from the transaction, the relative used the information to
make a significant profit. The most appropriate way for the CAE to deal with this
problem is to - ANS-Inform The IIA's Board of Directors and take the personnel action
required by organizational policy.
Which of the following best describes the purpose of the internal audit activity? -
ANS-To add value and improve an organization's operations.
According to The IIA Code of Ethics, which of the following are four principles relevant
to the professional care that internal auditors should apply in their practice of internal
auditing? - ANS-Integrity, objectivity, confidentiality, and competency.
A CIA is working in a noninternal-auditing position as the director of purchasing. The
CIA signed a contract to procure a large order from the supplier with the best price,
quality, and performance. Shortly after signing the contract, the supplier presented the
CIA with a gift of significant monetary value. Which of the following statements
regarding the acceptance of the gift is true? - ANS-Acceptance of the gift violates The
IIA's Code of Ethics and is prohibited for a CIA.
A primary purpose of establishing a code of conduct within a professional organization
is to - ANS-Promote an ethical culture among professionals who serve others.
Which of the following actions by an internal auditor would violate The IIA's Code of
Ethics? - ANS-Acceptance of airline tickets from an engagement client.
Which of the following statements is part of The IIA Rules of Conduct for competency? -
ANS-Internal auditors shall engage only in those services for which they have the
necessary knowledge, skills, and experience.
Which Standards expand upon the other categories of Standards? -
ANS-Implementation Standards.
, An internal auditor for a large regional bank was asked to serve on the board of
directors of a local bank. The bank competes in many of the same markets as the
regional bank but focuses more on consumer financing than on business financing. In
accepting this position, the internal auditor
1. Violates The IIA's Code of Ethics because serving on the board may be in conflict
with the best interests of the internal auditor's employer
2. Violates The IIA's Code of Ethics because the information gained while serving on the
board of directors of the local bank may influence recommendations regarding potential
acquisitions - ANS-1 and 2.
The degree of voluntary compliance with an organization's adopted code of ethics is a
measure of the - ANS-Cohesion and professionalism of an organization.
Which of the following is not appropriate for inclusion in the internal audit charter? -
ANS-Authorization of the board to approve the charter.
Which of the following activities of an internal auditor is most likely to be acceptable
under The IIA's Code of Ethics? - ANS-Conducting an unrelated business outside of
office hours.
Which of the following would violate The IIA's Code of Ethics core principle of
competency? - ANS-The organization has downsized and has a very lean staff. The
board has recently approved the deferral of all continuing education for the next 12
months due to the staff's workload.
"Internal auditors shall be prudent in the use and protection of information acquired in
the course of their duties" is a Rule of Conduct under which core principle of The IIA's
Code of Ethics? - ANS-Confidentiality.
An internal auditing team has made observations and recommendations that should
significantly improve a division's operating efficiency. Out of appreciation of this work,
and because it is the holiday season, the division manager presents the in-charge
internal auditor with a gift of moderate value. Which of the following best describes the
action prescribed by The IIA's Code of Ethics? - ANS-Not accept it if the gift is
presumed to impair the internal auditor's judgment.
Which of the following most likely constitutes a violation of The IIA's Code of Ethics by
an internal auditor? - ANS-Purchasing stock in a target entity after overhearing an
executive's discussion of a possible acquisition.
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