Free Access IIA.IIA-CIA-Part1.v2026-07-28.q398 Practice Test (Page 2)

Question 1

The organization's internal audit charter was last updated six years ago. To update the charter, which of the following actions is most appropriate for the chief audit executive to take?

A.Wait for the next external assessment and address all of the missing information in the charter based on the recommendations from the external assessment team.

B.Perform a review of IIA guidance to become acquainted with the latest mandatory elements prior to updating the charter

C.Use an internal audit charter template from another organization that operates within the same industry.

D.Identify an individual within the internal audit activity who has in-depth knowledge of mandatory IIA guidance elements to address any gaps or areas of the current version of the charter that could be improved.

Question 2

Due to extreme liquid fuel price fluctuations, management decided to designate a specific price below which liquid fuel shall not be sold to customers, but instead shall be pumped into storage tanks. Which of the following risk responses has management selected?

A.Risk reduction.

B.Risk transfer.

C.Risk acceptance.

D.Risk avoidance.

Question 3

Which of the following is an example of sharing risk?

A.An organization redesigned a business process to change the risk pattern.

B.An organization outsourced a portion of its services to a third-party service provider.

C.An organization sold an unprofitable business unit to its competitor.

D.In order to spread total risk, an organization used multiple vendors for critical materials.

Question 4

Which of the following scenarios best illustrates the Fraud Triangle component known as "perceived opportunity"?

A.Employees may perceive favoritism and feel overlooked and resentful.

B.Duties are not properly segregated.

C.Substantial bonuses are awarded if financial targets are met.

D.Bonuses may not be paid this year.

Question 5

Senior management at a financial institution has received allegations of fraud at its derivatives trading desk and has asked the internal audit activity to investigate and issue a report concerning the allegations. The internal audit activity has not yet developed sufficient proficiency regarding derivatives trading to conduct a thorough fraud investigation in this area. Which of the following courses of action should the chief audit executive (CAE) take to comply with the Standards?

A.Engage the former head of the institution's derivatives trading desk to perform the investigation and submit a report with supporting documentation to the CAE.

B.Request that senior management allow a delay of the fraud investigation until the internal audit activity's on-staff certified fraud examiner is able to obtain the appropriate training regarding the analysis of derivatives trading.

C.Contract with an external certified fraud examiner with derivatives experience to perform the investigation and subsequent reporting, with the chief audit executive approving the scope of the investigation and evaluating the adequacy of the work performed.

D.Request that senior management exclude the internal audit activity from the investigation completely and instead contract with an external certified fraud examiner with derivatives experience to perform all aspects of the investigation and subsequent reporting.

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