Wiley CIAexcel Exam Review 2014: Part 1, Internal Audit Basics

Sample Practice Questions, Answers, and Explanations

Domain 1: Mandatory Guidance (35–45%)

1. The IIA’s definition of internal auditing emphasizes the effectiveness of which of the following?

a. Value, cost, and benefit propositions.

Incorrect. See correct answer (c).

b. Inherent risk, residual risk, and total risk.

Incorrect. See correct answer (c).

c. Risk management, control, and governance processes.

Correct. The definition of internal auditing states the fundamental purpose, nature, and scope of internal auditing. Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

d. Purpose, nature, and scope of work.

Incorrect. See correct answer (c).

2. Which of the following adds value to the others?

a. Governance processes.

Incorrect. See correct answer (c).

b. Risk management processes.

Incorrect. See correct answer (c).

c. Internal audit activities.

Correct. Internal audit activities add value to the organization (and its stakeholders) when they provide objective and relevant assurance and contribute to the effectiveness and efficiency of governance, risk management, and control processes.

d. Control processes.

Incorrect. See correct answer (c).

3. All of the following are examples of assurance services ...