Powers CIA Review

a. CIA May 94 I.16

Correct Answer is (D)
Not (a) because a conflict of interest
compromises objectivity.
Not (b) because an auditees familiarity with the
auditor due to lack of rotation in assignments
compromises objectivity.
Not (c) because the auditors assumption of
operational duties on a temporary basis
compromises objectivity.
Answer (d) is correct. According to the
Standards the auditor should rely on outside
e!pert opinion when appropriate such as if the
internal audit department lacks certain
knowledge or e!pertise.
b. CIA Nov 90 I.38
Correct Answer is ()
Not (a) because this activity is appropriate for
users and functional management.
Answer (b) is correct. A feasibility study
should consider the costs and benefits of
conversion to a new computer system. "he
feasibility study is a preliminary step prior to
plans for implementation. #nternal auditors may
recommend standards of control and review
procedures before implementation but they
should not design install or operate systems.
Also drafting procedures is not an audit
function.
Not (c) because this activity is appropriate for
users and functional management.
Not (d) because computer e!perts should
perform this task.
c. CIA Nov 94 I.61
Correct Answer is (A)
Answer (a) is correct. $ecause the auditor
reports directly to the $oard of directors (s)he
has organi%ational independence however
because the auditor did not report the issue to
management (s)he lacks objectivity.
Not (b) because the auditor reports directly to
the $oard of directors (s)he has organi%ational
independence however because the auditor
did not report the issue to management (s)he
lacks objectivity.
Not (c) because the auditor reports directly to
the $oard of directors (s)he has organi%ational
independence however because the auditor
did not report the issue to management (s)he
lacks objectivity.
Not (d) because the auditor reports directly to
the $oard of directors (s)he has organi%ational
independence however because the auditor
did not report the issue to management (s)he
lacks objectivity.
&' A(!4
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d. CIA May 91 II.14
Correct Answer is (A)
Answer (a) is correct. "he internal auditing
department should possess or should obtain
the knowledge skills and disciplines needed to
carry out its audit responsibilities. "he internal
auditing staff should collectively possess the
knowledge and skills essential to the practice of
the profession within the organi%ation. "hese
attributes include proficiency in applying
internal auditing standards procedures and
techni*ues. "he internal auditing department
should have employees or use outside service
providers who are *ualified in such disciplines
as accounting auditing economics finance
statistics information technology engineering
ta!ation law environmental affairs and such
other areas as needed to meet the audit
responsibilities. +ach member of the
department however need not be *ualified in
all of these disciplines.
Not (b) because obtaining college transcripts is
an appropriate procedure to determine a
prospective auditor,s *ualifications.
Not (c) because checking an applicant,s
references is an appropriate procedure to
determine a prospective auditor,s *ualifications.
Not (d) because determining previous job
e!perience is appropriate during the hiring
process.
e. CIA Nov 94 I.46
Correct Answer is (A)
Answer (a) is correct. -roficiency in applying
internal auditing standards procedures and
techni*ues is re*uired in performing internal
audits. -roficiency means the ability to apply
knowledge to situations likely to be
encountered and to deal with them without
e!tensive recourse to technical research and
assistance.
Not (b) because proficiency in accounting
principles and techni*ues is re*uired only of
auditors who work e!tensively with financial
records and reports.
Not (c) because an internal auditor is re*uired
to have an understanding of not a proficiency
in management principles.
Not (d) because internal auditors ordinarily
need not be proficient in marketing techni*ues.
". CIA Nov 94 I.4#
Correct Answer is (C)
Not (a) because proficiency not an
understanding is re*uired in applying internal
auditing procedures and techni*ues.
Not (b) because proficiency in accounting
principles and techni*ues is re*uired only of
auditors who work e!tensively with financial
records and reports.
Answer (c) is correct. An understanding of
management principles is re*uired to recogni%e
and evaluate the materiality and significance of
deviations from good business practice. An
understanding means the ability to apply broad
knowledge to situations likely to be
encountered to recogni%e significant
deviations and to be able to carry out the
research necessary to arrive at reasonable
solutions.
Not (d) because internal auditors ordinarily
need not be proficient in marketing techni*ues.
&' A(!$
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%. CIA Nov 94 I.48
Correct Answer is ()
Not (a) because proficiency not an
appreciation is re*uired of internal auditors in
applying internal auditing procedures and
techni*ues.
Answer (b) is correct. An appreciation is
re*uired of the fundamentals of such subjects
as accounting economics commercial law
ta!ation finance *uantitative methods and
information technology. An appreciation means
the ability to recogni%e the e!istence of
problems or potential problems and to
determine the further research to be
undertaken or the assistance to be obtained.
&owever proficiency in accounting principles
and techni*ues is re*uired of auditors who
work e!tensively with financial records and
reports.
Not (c) because an internal auditor must have
an understanding not an appreciation of
management principles.
Not (d) because internal auditors ordinarily
need not be proficient in marketing techni*ues.
&. CIA Nov 91 II.48
Correct Answer is (C)
Not (a) because an auditor should conduct
reasonable e!aminations but detailed tests of
all transactions are not re*uired.
Not (b) because absolute assurance need not
and cannot be given with regard to audited
activities.
Answer (c) is correct. .ue /are implies
reasonable care and competence not
infallibility or e!traordinary performance. .ue
care re*uires the auditor to conduct
e!aminations and verifications to a reasonable
e!tent but does not re*uire detailed audits of
all transactions. Accordingly the internal
auditor cannot give absolute assurance that
noncompliance or irregularities do not e!ist.
Nevertheless the possibility of material
irregularities or noncompliance should be
considered whenever the internal auditor
undertakes an internal auditing assignment.
Not (d) because an auditor should provide
recommendations to promote compliance with
acceptable practices.
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i. CIA Nov 91 I.6
Correct Answer is (C)
Not (a) because regardless of their
backgrounds all internal auditors should
participate in professional development
programs.
Not (b) because the use of a mentor is
encouraged regardless of the new auditor,s
background.
Answer (c) is correct. "he internal auditing
department should possess or should obtain
the knowledge skills and disciplines needed to
carry out its audit responsibilities. "he internal
auditing staff should collectively possess the
knowledge and skills essential to the practice of
the profession within the organi%ation. "hese
attributes include proficiency in applying
internal auditing standards procedures and
techni*ues. "he internal auditing department
should have employees or use consultants who
are *ualified in such disciplines as accounting
economics finance statistics electronic data
processing engineering ta!ation and law as
needed to meet the audit responsibilities. +ach
member of the department however need not
be *ualified in all of these disciplines.
Not (d) because unless other auditors possess
sufficient knowledge of these disciplines hiring
this person would accentuate staffing
deficiencies.
'. CIA Nov 93 I.46
Correct Answer is (A)
Answer (a) is correct. .ue /are implies
reasonable care and competence not
infallibility or e!traordinary performance. .ue
care re*uires the auditor to conduct
e!aminations and verifications to a reasonable
e!tent but does not re*uire detailed audits of
all transactions. Accordingly the internal
auditor cannot give absolute assurance that
noncompliance or irregularities do not e!ist.
Nevertheless the possibility of material
irregularities or noncompliance should be
considered whenever the internal auditor
undertakes an internal auditing assignment.
"he work performed in both areas was
ade*uate and would withstand normal scrutiny.
Not (b) because the work performed in both
areas was ade*uate and would withstand
normal scrutiny.
Not (c) because the work performed in both
areas was ade*uate and would withstand
normal scrutiny.
Not (d) because the work performed in both
areas was ade*uate and would withstand
normal scrutiny.
(. CIA Nov 93 I.4#
Correct Answer is (C)
Not (a) because .ue /are was not e!ercised in
regard to re*uirements ### and #0.
Not (b) because .ue /are was not e!ercised in
regard to re*uirements ### and #0.
Answer (c) is correct. "he procedures
performed as a basis for concluding that no
nonproductive work was accomplished resulted
in insufficient competent evidence. "he opinion
of individuals whose work was in *uestion lacks
reliability. 1iven that the evidence regarding
area #0 was based on that in area ### it also is
suspect.
Not (d) because .ue /are was not e!ercised in
regard to re*uirements ### and #0.
&' A(!#
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). CIA May 8$ II.1!
Correct Answer is (C)
Not (a) because it is an e!ample of an informal
report.
Not (b) because it is an e!ample of issuing a
fair and complete report.
Answer (c) is correct. Auditors should be
skilled in dealing with people and in
communicating effectively. Auditors should
understand human relations and maintain good
relations with auditees. "he participative audit
approach is an outgrowth of this re*uirement.
2ecent research suggests that auditees who
are involved in the audit and who e!pect to
benefit there from will be less fearful more
cooperative and more accepting of change.
"he auditor should establish an amicable
problem(solving partnership with auditees with
full disclosure in most cases of audit objectives
scope and findings. "he auditor should seek
the assistance and agreement of the auditee in
determining standards of measurement and
their means of application and in devising
recommendations for corrective action. "he
auditee,s views about auditor conclusions or
recommendations also may be included in the
report.
Not (d) because it is an e!ample of both
gaining input from the auditee and maintaining
a good auditee relationship.
*. CIA Nov 91 I.49
Correct Answer is (A)
Answer (a) is correct. +!ercising due
professional care means using reasonable
audit skill and judgment in performing the audit.
"o this end the internal auditor should consider
"he e!tent of audit work
needed to achieve audit
objectives.
"he relative materiality or
significance of matters to
which audit procedures are
applied.
"he ade*uacy and
effectiveness of internal
controls.
"he cost of auditing in relation
to potential benefits.
Not (b) because the auditor should consider the
cost(benefit ratio before beginning an audit.
Not (c) because .ue /are includes 3evaluating
established operating Standards and
determining whether those Standards are
acceptable and are being met.3
Not (d) because .ue /are does not re*uire
absolute assurance.
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n. CIA May 90 I.43
Correct Answer is ()
Not (a) because governments typically have no
such re*uirement.
Answer (b) is correct. An organi%ation,s code
of ethical conduct is the established general
value system the organi%ation wishes to apply
to its members, activities by communicating
organi%ational purposes and beliefs and
establishing uniform ethical guidelines for
members which include guidance on behavior
for members in making decisions. $ecause
laws and specific rules cannot cover all
situations organi%ations can benefit from
having an established ethical code. #t
effectively communicates acceptable values to
all members including recruits and
subcontractors. #t also provides a method of
policing and disciplining members for violations
through formal review panels and group
pressure (informal). A code establishes high
standards against which individuals can
measure their own performance and
communicates to those outside the
organi%ation the value system from which the
organi%ation,s members must not be asked to
deviate.
Not (c) because codes of conduct provide
*ualitative not *uantitative standards.
Not (d) because other purposes of a code of
conduct are much more significant.
o. CIA Nov 84 I.33
Correct Answer is (D)
Not (a) because this re*uirement is not in the
/ode.
Not (b) because this re*uirement is not in the
/ode.
Not (c) because this re*uirement is not in the
/ode.
Answer (d) is correct. 2ule of /onduct 4.5
states 3#nternal auditors shall disclose all
material facts known to them that if not
disclosed may distort the reporting of activities
under review.3
+. CIA Nov 84 I.40
Correct Answer is (C)
Not (a) because internal auditors should
e!ercise diligence in performing their duties.
Not (b) because according to 2ule of /onduct
4.6 3#nternal auditors shall not participate in
any activity or relationship that may impair or
be presumed to impair their unbiased
assessment. "his participation includes those
activities or relationships that may be in conflict
with the interests of the organi%ation3.
Answer (c) is correct. Nothing in "he ##A /ode
of +thics prohibits operating an unrelated
business outside of regular office hours. "he
activity does not in itself constitute a conflict of
interest a use of information for personal gain
or an impairment of the auditor,s unbiased
assessment.
Not (d) because according to 2ule of /onduct
4.4 3#nternal auditors shall not accept anything
that may impair or be presumed to impair their
professional judgment7.
&' A(!9
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,. CIA Nov 84 II.!1
Correct Answer is (A)
Answer (a) is correct. "he ##A /ode of +thics
includes -rinciples that internal auditors are
e!pected to apply and uphold. "hey are
interpreted by the 2ules of /onduct behavior
norms e!pected of internal auditors. "hat a
particular conduct is not mentioned in the
2ules of /onduct does not prevent it from
being unacceptable or discreditable.
/onse*uently a reasonable inference is that
individual judgment is necessary in the
application of the -rinciples and the 2ules of
/onduct. +thics provide basic principles in the
practice of internal auditing. 8embers or /#As
should reali%e that their individual judgment is
re*uired in the application of these principles3.
Not (b) because an internal auditor 3shall not
knowingly be a party to any illegal activity3.
9urthermore an internal auditor is bound to
respect and contribute only to the legitimate
and ethical objectives of the organi%ation.
Not (c) because internal auditors 3shall engage
only in those services for which they have the
necessary knowledge skills and e!perience3.
Not (d) because applying and upholding the
integrity principle is the means by which an
internal auditor establishes trust as a basis for
reliance on his:her judgment.
r. CIA May 8$ I.1$
Correct Answer is ()
Not (a) because acceptance of anything from a
customer is prohibited but only if it would impair
or be presumed to impair professional
judgment.
Answer (b) is correct. 2ule of /onduct 4.5
states 3#nternal auditors shall disclose all
material facts known to them that if not
disclosed may distort the reporting activities
under review3. 8oreover under 2ule of
/onduct 6.5 3#nternal auditors shall not
knowingly be a party to any illegal activity or
engage in acts that are discreditable to the
profession of internal auditing or to the
organi%ation3.
Not (c) because under 2ule of /onduct ;.5
3#nternal auditors shall continually improve their
proficiency and the effectiveness and *uality of
their services3.
Not (d) because whereas an internal auditor is
prohibited from using confidential information
for personal gain and an investment in the
company,s stock would be *uestionable an
investment in a mutual fund is acceptable.
s. CIA Nov. 8$ )I.9
Correct Answer is (D)
Not (a) because only authori%ed personnel
need access to appropriate data.
Not (b) because only authori%ed personnel
need access to appropriate data.
Not (c) because only authori%ed personnel
need access to appropriate data.
Answer (d) is correct. because the code
re*uire the internal auditors to be prudent in the
use protection of information ac*uired in the
course of their duties. &owever authori%ed
parties presumably may be allowed to review
confidential information with the consent of the
auditee. As long as no determent occurs to the
legitimate and ethical objectives of the
organi%ation as a result confidentiality is
maintained.
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&' A(30
Powers CIA Review
t. CIA Nov 86 II.4$
Correct Answer is ()
Not (a) because the activities of a charity are
unlikely to be contrary to the interests of the
organi%ation.
Answer (b) is correct. <nder 2ule of /onduct
4.6 3#nternal auditors shall not participate in
any activity or relationship that may impair or
be presumed to impair their unbiased
assessment. "his participation includes those
activities or relationships that may be in conflict
with the interests of the organi%ation3. As a
business insurance broker the auditor may
lose his:her objectivity because (s)he might
benefit from a change in the employer,s
insurance coverage.
Not (c) because teaching is compatible with
internal auditing.
Not (d) because whereas dealing in
commercial properties might involve a conflict
renting residential units most likely does not.
-. CIA Nov 86 II.48
Correct Answer is (D)
Not (a) because according to 2ule of /onduct
6.6 3#nternal auditors shall perform their work
with honesty diligence and responsibility7.
Not (b) because according to 2ule of /onduct
;.5 3#nternal auditors shall continually improve
their proficiency and the effectiveness and
*uality of their services3.
Not (c) because according to 2ule of /onduct
;.4 3#nternal auditors shall perform internal
auditing services in accordance with the
Standards for the -rofessional -ractice of
#nternal Auditing3. "he Standards re*uire
supporting information to be sufficient reliable
relevant and useful.
Answer (d) is correct. According to 2ule of
/onduct 5.6 of "he ##A /ode of +thics 3#nternal
auditors shall be prudent in the use and
protection of information ac*uired in the course
of their duties3. According to 2ule of /onduct
5.4 3#nternal auditors shall not use information
for any personal gain or in any manner that
would be contrary to the law or detrimental to the
legitimate and ethical objectives of the
organi%ation3. "hus such use of information by
the /A+ might be illegal under the insider
trading rules.
&' A(31
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v. CIA Nov 8# II.46
Correct Answer is (C)
Not (a) because the charity,s interests are
unlikely to conflict with the employer,s.
Not (b) because although a conflict is possible
in this case it is not inevitable.
Answer (c) is correct. 2ule of /onduct 5.4 of
"he ##A /ode of +thics states 3#nternal auditors
shall not use information for any personal gain
or in any manner that would be contrary to the
law or detrimental to the legitimate and ethical
objectives of the organi%ation.3 $ecause the
employee is considered to stand in the shoes
of the relative with regard to the mailing list (s)
he is deemed to be using company information
for personal gain. "he use is probably also
contrary to the company,s interest.
Not (d) because teaching is compatible with
internal auditing.
w. CIA Nov 8# II.48
Correct Answer is (C)
Not (a) because teaching is compatible with
internal auditing.
Not (b) because owning a significant amount of
stock in a public company that is a competitor
is more likely to cause a conflict for a director
or officer than an internal auditor. An auditor
would seldom be able during the course of
his:her employment to take action that would
enhance the value of the stock.
Answer (c) is correct. 2ule of /onduct 4.4 of
"he ##A /ode of +thics states 3#nternal auditors
shall not accept anything that may impair or be
presumed to impair their professional
judgment.3
Not (d) because the ##A /ode of +thics does
not specifically mention use of the /#A
designation. Acts discreditable to the
profession or the organi%ation are prohibited
but use of the /#A designation outside the
employment conte!t is not per se discreditable.
.. CIA Nov 8# II.$0
Correct Answer is (A)
Answer (a) is correct. <nder 2ule of /onduct
4.6 3#nternal auditors shall not participate in
any activity or relationship that may impair or
be presumed to impair their unbiased
assessment. "his participation includes those
activities or relationships that may be in conflict
with the interests of the organi%ation7. #n these
circumstances the auditor lacks the
appearance of objectivity because the outcome
of the audit could directly affect the ac*uisition
decision and the price of the stock. "he use of
the information also would be a violation of the
/ode and possibly of insider trading rules as
well. <nder 2ule of /onduct 5.4 3#nternal
auditors shall not use information for any
personal gain or in any manner that would be
contrary to the law or detrimental to the
legitimate and ethical objectives of the
organi%ation3.
Not (b) because the appearance as well as the
reality of loss of independence must be
considered.
Not (c) because the auditor might be deemed
to have a personal stake in the results of the
audit.
Not (d) because the investment is significant to
the auditor.
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&' A(3!
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y. CIA May 89 I.44
Correct Answer is (C)
Not (a) because the /ode and the S--#A
would be violated.
Not (b) because the /ode and the S--#A
would be violated.
Answer (c) is correct. "he ##A,s /ode of
+thics (2ule of /onduct ;.5) states 3#nternal
auditors shall continually improve their
proficiency and the effectiveness and *uality of
their services3. "he /ode also re*uires
compliance with the S--#A (2ule of /onduct
;.4). <nder the S--#A internal auditors should
enhance their knowledge skills and
competencies through continuing professional
development. &ence both "he ##A,s /ode of
+thics and the S--#A would be violated by
failing to earn continuing education credits.
Not (d) because the /ode and the S--#A
would be violated.
/. CIA May 88 I.48
Correct Answer is ()
Not (a) because this is an activity separate
from the interests and activities of the
organi%ation. No impairment of professional
judgment e!ercised during the internal auditor,s
duties is likely to result from this activity.
Answer (b) is correct. 2ule of /onduct 4.4
states 3#nternal auditors shall not accept
anything that may impair or be presumed to
impair their professional judgment3. -reparing
a personal ta! return for a division manager for
a fee falls under this prohibition.
Not (c) because this is an activity separate from
the interests and activities of the organi%ation.
No impairment of professional judgment
e!ercised during the internal auditor,s duties is
likely to result from this activity.
Not (d) because this is an activity separate
from the interests and activities of the
organi%ation. No impairment of professional
judgment e!ercised during the internal auditor,s
duties is likely to result from this activity.
aa. CIA May 88 II.46
Correct Answer is (C)
Not (a) because reporting to company officials
is not detrimental to the organi%ation.
Not (b) because the /ode imposes no such
re*uirement. "he appropriate authorities within
the organi%ation should be notified.
Answer (c) is correct. Such payments may be
illegal. 2ule of /onduct 4.5 states 3#nternal
auditors shall disclose all material facts known
to them that if not disclosed may distort the
reporting of activities under review3.
Not (d) because the /ode imposes no such
re*uirement. "he appropriate authorities within
the organi%ation should be notified.
bb. CIA May 88 II.$0
Correct Answer is ()
Not (a) because disclosure of information
technology controls is not detrimental to the
objectives of the organi%ation. "hey are not
likely to be trade secrets.
Answer (b) is correct. #nsider trading is
prohibited by federal securities law. According
to 2ule of /onduct 5.6 3#nternal auditors shall
be prudent in the use and protection of
information ac*uired in the course of their
duties3. 9urthermore according to 2ule of
/onduct 5.4 3#nternal auditors shall not use
information for any personal gain or in any
manner that would be contrary to the law or
detrimental to the legitimate and ethical
objectives of the organi%ation3.
Not (c) because if senior management permits
the omission the auditor is not guilty of failing
to disclose material facts in the report.
Not (d) because an audit of e!pense accounts
is within the auditor,s normal responsibilities
but further investigation of fraud should
ordinarily be made by investigative specialists.
&' A(33
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cc. CIA Nov 88 II.4#
Correct Answer is ()
Not (a) because the timing of the gift is
irrelevant.
Answer (b) is correct. 2ule of /onduct 4.4
states 3#nternal auditors shall not accept
anything that may impair or be presumed to
impair their professional judgment3.
Not (c) because the 2ule of /onduct uses the
word 3anything3.
Not (d) because the gift,s acceptance should
be based on whether the auditor,s professional
judgment will be impaired or be presumed to
be impaired.
dd. CIA Nov 89 I.4$
Correct Answer is (D)
Not (a) because immaterial facts need not be
included.
Not (b) because the ethical transgression if
any was not made by the auditor but by audit
management.
Not (c) because the ethical transgression if
any was not made by the auditor but by audit
management.
Answer (d) is correct. 2eporting the defective
function as an auditee failure is a violation of
the auditor,s ethical obligation to disclose all
material facts known to him:her that if not
disclosed may distort the reporting of activities
under review (2ule of /onduct 4.5).
ee. CIA May 89 I.43
Correct Answer is (D)
Not (a) because awarding the contract to the
lowest bidder does not necessarily indicate an
absence of favoritism. "he lowest bid is not
always the best because many factors other
than price must be weighed.
Not (b) because awarding the contract to the
lowest bidder does not necessarily indicate an
absence of favoritism. "he lowest bid is not
always the best because many factors other
than price must be weighed.
Not (c) because the functions described are
within the ordinary scope of work of a
purchasing agent who does not have an actual
or apparent conflict of interest.
Answer (d) is correct. "he purchasing agent
has a conflict of interest because (s)he appears
to lack objectivity. +thics codes re*uire that
even the appearance of impropriety be
avoided. /onse*uently the agent should not
have participated in the decision however
scrupulous his:her actions may have been.
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&' A(34
Powers CIA Review
"". CIA Nov 90 I.46
Correct Answer is (A)
Answer (a) is correct. An organi%ation,s code
of ethical conduct is the established general
value system the organi%ation wishes to apply
to its members, activities by communicating
organi%ational purposes and beliefs and
establishing uniform ethical guidelines for
members which include guidance on behavior
for members in making decisions. $ecause
laws and specific rules cannot cover all
situations organi%ations can benefit from
having an established ethical code. #t
effectively communicates acceptable values to
all members including recruits and
subcontractors. #t also provides a method of
policing and disciplining members for violations
through formal review panels and group
pressure (informal). A code establishes high
standards against which individuals can
measure their own performance and
communicates to those outside the
organi%ation the value system from which the
organi%ation,s members must not be asked to
deviate.
Not (b) because governments typically have no
such re*uirement.
Not (c) because codes of conduct provide
*ualitative not *uantitative standards.
Not (d) because other purposes of a code of
conduct are much more significant.
%%. CIA Nov 90 I.$0
Correct Answer is (C)
Not (a) because the ##A board of directors is not
authori%ed to re*uire continuing professional
education as a sensation for misconduct.
Not (b) because the board is not authori%ed to
re*uire retaking of the /#A e!amination as a
sensation for misconduct.
Answer (c) is correct. "he /ode of +thics
specifically mentions forfeiture of ##A
membership as possible penalty for violation of
its provisions.
Not (d) because the board has no authority to
assess a monetary fine.
&&. CIA Nov 90 I.48
Correct Answer is (A)
Answer (a) is correct. 2ule of /onduct 4.4
states 3#nternal auditors shall not accept
anything that may impair or be presumed to
impair their professional judgment3. Small
promotional item such as a pen that are
available to the general public and are of
minimal value are not likely to hinder the
auditor,s professional judgment.
Not (b) because a gift may not be accepted
under article l0.
Not (c) because the manager may think that a
gift will ward off future audit.
Not (d) because a gift may not be accepted
under article l0.
&' A(3$
) 2004 Powers Resources Corporation.
All rights reserved
Powers CIA Review
ii. CIA May 9! II.49
Correct Answer is (A)
Answer (a) is correct. "he first Standards of
/onduct states these *ualities 3#nternal
auditors shall perform their work with honesty
diligence and responsibility3.
Not (b) because timeliness sobriety and clarity
are not mentioned.
Not (c) because paraphrase from standards
4=>(knowledge skills and .isciplines).
Not (d) because punctuality is not mentioned in
the /ode.
''. CIA Nov 90 II.4$
Correct Answer is (A)
Answer (a) is correct. -rofessional
organi%ations usually do not deal with auditors
employees and are not in competition with
them. "hey also normally do not reveal or use
confidential information to the detriment of
employers.
Not (b) because this could be a conflict of
interest and could involve misuse of
confidential information.
Not (c) because each relationship might create
a conflict of interest and could involve misuse
of confidential information.
Not (d) because could result in misuse of
confidential information.
((. CIA Nov 90 II.4#
Correct Answer is (A)
Answer (a) is correct. Article ll re*uires the
auditor to be loyal to his employer.
Not (b) because this action violates the
auditor,s duties under Article ll.
Not (c) because this action violates the
auditor,s duties under Article ll.
Not (d) because this action violates the
auditor,s duties under Article ll.
)). CIA May 96 I.68
Correct Answer is (C)
Not (a) because the auditor cannot ignore the
matter since it is an ethical issue.
Not (b) because the Standards re*uire the
director of internal auditing to distribute audit
report to those members of organi%ation who
can take appropriate actions.
Answer (c) is correct. ##As /ode of +thics
Article l? re*uire /#A to reveal all material facts
which could conceal unlawful practices.
Not (d) because management should
determine what constitutes just compensation.
**. CIA May 90 I.4$
Correct Answer is ()
Not (a) because continuing education is
encouraged and because the program is open
to all employees there is no violation.
Answer (b) is correct. 'ithout consent by
appropriate senior management acceptance of
any gift is prohibited (Article ll of /ode of
+thics).
Not (c) because the auditors is re*uired to
reveal all material facts in his or her opinion.
Not (d) because a violation would occur only if
confidential information were used for personal
gain. #n his case no information was known.
nn. CIA Nov 90 II.48
Correct Answer is (A)
Answer (a) is correct. Article l0 re*uires
auditor to report any information that is material
to management.
Not (b) because this action is acceptable for
internal use only.
Not (c) because this action is acceptable as
long as the auditor is careful not to state any
final conclusions that are not supported by
factual evidence.
Not (d) because this is typical done.
) 2004 Powers Resources Corporation.
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&' A(36
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oo. CIA May 9! I.4#
Correct Answer is (C)
Not (a) because diligence does not override
professional competence or use good
judgment.
Not (b) because loyalty would be better
e!hibited by consulting professionals in
interrogation and knowing your limits of
competence.
Answer (c) is correct. "he code re*uires
members and /#As to refine from undertaking
services which cannot be reasonably
completed with professional competence.
Not (d) because the auditor may violate the
suspect,s civil rights due to his ine!perience
but that is not a certainty.
++. CIA May 93 II.4!
Correct Answer is ()
Not (a) because a conflict of interest policy
should prohibit financial dealings or the transfer
of benefits between an employee and those
with whom the organi%ation deals. 9or
e!ample according to "he ##A /ode of +thics
internal auditors shall not accept anything that
may impair or be presumed to impair their
professional judgment (2ule of /onduct 4.4).
Answer (b) is correct. A prohibition on public
service is ordinarily inappropriate. "his is a
right if not a duty of all citi%ens.
Not (c) because a conflict of interest policy
should prohibit financial dealings or the transfer
of benefits between an employee and those
with whom the organi%ation deals. 9or
e!ample according to "he ##A /ode of +thics
internal auditors shall not accept anything that
may impair or be presumed to impair their
professional judgment (2ule of /onduct 4.4).
Not (d) because the ##A /ode of +thics prohibits
use of information for personal gain (2ule of
/onduct 5.4).
,,. CIA Nov 9! I.49
Correct Answer is (D)
Not (a) because the auditor has violated the
/ode of +thics standard regarding use of
confidential information. "he institute should be
notified.
Not (b) because summary discharge may not
be in accordance with company personnel
policies.
Not (c) because the auditor was negligent in his
use of confidential information and violates the
/ode of +thics. Some action is warranted.
Answer (d) is correct. Since the ##A /ode
(Article l0) was violated the institute should be
notified. #n addition company policy must be
followed.
rr. CIA Nov 9! II.4#
Correct Answer is ()
Not (a) because this is a material fact that
could distort a report of operations if not
revealed.
Answer (b) is correct. "he /ode of +thics
calls for compliance with the Standards.
Standards ==> (e!ternal auditors) charges the
director with coordination with e!ternal auditors
and e!changing information. #n addition the
code re*uires that all material facts known be
revealed. Since this impact the e!ternal
auditors work in which the internal auditors are
participating the situation must be divulged.
Not (c) because the shortage is known and the
e!ternal auditors should be told more than that
there is a possibility.
Not (d) because the audit director should
discuss the issue with the management first
and later with the board of directors. "he audit
directors can report this issues directly with the
e!ternal auditor.
&' A(3#
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ss. CIA May 93 I.4$
Correct Answer is (A)
Answer (a) is correct. /#As must not
knowingly be a party to any illegal or improper.
Also reporting within the organi%ation is the
proper action.
Not (b) because /#As must not knowingly be a
party to an illegal or improper act. "he fact that
this activity is improper and probably illegal
re*uires the /#A to report it.
Not (c) because /#As must not knowingly be a
party to an illegal or improper act. "he fact that
this activity is improper and probably illegal
re*uires the /#A to report it. 8erely nothing the
condition in the audit working paper does not
constitute @reporting7 it.
Not (d) because /#A are not re*uired to
voluntarily reveal illegal or improper acts to
outside individuals or organi%ations. "hey
should try to work within their organi%ation.
tt. CIA Nov 93 I.4$
Correct Answer is (C)
Not (a) because although this result may follow
from establishing a code of conduct it is not
the primary purpose. "o consider it so would be
self(serving.
Not (b) because a code of conduct may help to
establish minimum standards of competence
but it would be impossible to legislate e*uality
of competence by all members of a profession.
Answer (c) is correct. "his is a distinguishing
mark of profession.
Not (d) because there are situations where
responsibility to the public at large may conflict
with and be more important than loyalty to
one,s organi%ation.
--. CIA May 91 II.$
Correct Answer is ()
Not (a) because staffing re*uirements must be
determined based on the circumstances of
each audit.
Answer (b) is correct. 0&e ##A /ode of +thics
applies not only to individuals but also to
entities that provide internal auditing services.
<nder 2ule of /onduct ;.4 3#nternal auditors
shall perform internal auditing services in
accordance with the Standards for the
-rofessional -ractice of #nternal Auditing.3
Not (c) because the /ode re*uires internal
auditors to respect and contribute to the
legitimate and ethical objectives of the
organi%ation and not engage in acts
discreditable to the organi%ation. &owever the
/ode does not specifically mention compliance
with organi%ational policy.
Not (d) because the /ode re*uires compliance
with the S--#A and the S--#A re*uire internal
auditors to enhance their knowledge skills and
competencies through continuing professional
development but neither the /ode nor the
S--#A re*uire formal continuing education.
vv. CIA Nov 93 I.44
Correct Answer is (A)
Answer (a) is correct. 'hen evaluating a
code of conduct it is important to consider two
itemsA comprehensiveness and compliance.
"he code should address the ethical issues
that the employees are e!pected to encounter
and provide suitable guidance. "he audit must
also consider the e!tent to which employees
are complying with the standards established.
Not (b) because evaluating the
comprehensiveness of the code is also
necessary.
Not (c) because evaluating the
comprehensiveness of the code is also
necessary.
Not (d) because evaluating the
comprehensiveness of the code is also
necessary.
) 2004 Powers Resources Corporation.
All rights reserved
&' A(38
Powers CIA Review
ww.CIA Nov 93 II.4$
Correct Answer is ()
Not (a) because the ##A /ode of +thics applies
##A members and /#As
Answer (b) is correct. "he ##A /ode of +thics
Standards of /onduct 0ll re*uires members
and /#As to adopt suitable means to comply
with standards.
Not (c) because loyalty to the organi%ation
must be e!hibited but the standards must be
followed by a member or /#A.
Not (d) because the ##A /ode of +thics says
nothing about resignation to avoid improper
activities.
... CIA Nov 93 II.44
Correct Answer is (A)
Answer (a) is correct. "his is the primary
purpose of the /ode of +thics.
Not (b) because /ode of +thics was not
designated to serve as standards for effective
accounting practice.
Not (c) because a /ode of +thics does not
provide the framework within which accounting
policies are developed.
Not (d) because the primary purpose of /ode
of +thics is not for interviewing new
accountants.
yy. CIA Nov 93 II.46
Correct Answer is (D)
Not (a) because this procedure would only
ensure employee knowledge and acceptance
of the code which are not at issue.
Not (b) because this procedure would only
ensure employee knowledge and acceptance
of the code which are not at issue.
Not (c) because public knowledge might affect
the behavior of some individuals but not to the
same e!tent as the perceived likelihood of
sanctions for wrongdoing.
Answer (d) is correct. -enalties for violations
of a code of conduct should enhance its
effectiveness. Some individuals will be deterred
from misconduct if they e!pect it to be detected
and punished.
//. CIA May 94 I.66
Correct Answer is (A)
Answer (a) is correct. "he ##A /ode re*uires
conditionality. Standard 44> (Bnowledge Skills
and .isciplines) and 4;> (/ompliance with
standards of /onduct)
Not (b) because approval of the audit
committee or management is re*uired by the
Standards.
Not (c) because the Standards re*uire
sufficient evidence to support findings.
Not (d) because the Standards allow use of
e!perts when needed.
&' A(39
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Powers CIA Review
aaa. CIA May 96 I.1#
Correct Answer is (A)
Answer (a) is correct. "he ##A /ode of +thics
contains basic principles which re*uire
individuals judgment to apply.
Not (b) because while the comparison might be
interesting # would not help determine how to
apply the code.
Not (c) because application might not be in the
best interest of the auditee.
Not (d) because judgment may be applied to
their use but not to whether or not to use them.
bbb. CIA May 9$ I.43
Correct Answer is (C)
Not (a) because there is no professional
conflict of interest e!ists per se &owever the
auditor should be aware of potential conflicts.
Not (b) because 1eorge has committed to
obtaining the needed e!pertise before
conducting the audit.
Answer (c) is correct. "his would be a
violation of Article ? of the code which re*uires
auditors to continually strive for improvement in
their proficiency and the effectiveness of their
services audits.
Not (d) because the information was disclosed
as part of the normal process of cooperation
between the internal and e!ternal auditor.
$ecause the books were adjusted the e!ternal
auditor was e!pected to in*uire as to the nature
of the adjustment.
ccc. CIA May 94 I.9
Correct Answer is (D)
Not (a) because this would be included in the
normal scope of this type of audit.
Not (b) because testing employees is not
prohibited by the Standards.
Not (c) because not prohibited by the
Standards
Answer (d) is correct. "he internal auditing
activity is ultimately responsible to the board of
directors. Not much benefit is gained by
surveying the board since their views will be
biased for this audit. Standards 6>>
(#ndependence) and 5>> (Scope of 'ork).
ddd. CIA Nov 9$ I.$1
Correct Answer is ()
Not (a) because the auditor must act
consistently with the sprit embodied in the ##A
/ode of +thics. #t not be practical to seek the
advice of legal counsel for all ethical decision.
+thics is a moral and professional concept not
just a legal concept.
Answer (b) is correct. "his is consistent with
the concept embodied in the ##A /ode. "he last
sentence of the code clearly indicates that the
auditor needs to uphold the objectives of the
##A.
Not (c) because it would not be practical to
seek management advice for all potential
dilemmas. 9urthermore the advice might not
be consistent with the profession,s standards.
Not (d) because if the company,s standards
are not consistent with or as high as the
profession,s standards and the internal auditor
is held to the standards of the profession.
) 2004 Powers Resources Corporation.
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&' A(40
Powers CIA Review
eee. CIA May 9$ I.$3
Correct Answer is (A)
Answer (a) is correct. Although an argument
should be made that the auditor should report
the matter to the audit committee and
management there is no evidence that the
auditor is deliberately withholding material facts
their for no violation of the /ode occurred
Not (b) because material fraud if suspected
should be brought to the attention of
management. &owever in this case the
auditor gathered sufficient evidence to dispel
the suspicion of fraud.
Not (c) because the auditor did not deliberately
withhold important information.
Not (d) because the auditor has gathered
sufficient information. #nternal legal counsel,s
opinion appears to be sufficient.
""". CIA Nov 9$ I.$!
Correct Answer is (A)
Answer (a) is correct. "his is consistent with
the ##As /ode of +thics 3#nternal auditors shall
not accept anything that may impair or be
presumed to impair their professional
judgment.3
Not (b) because this would be inconsistent with
the standards adopted by the professionC
Not (c) because the auditor is guided by the
profession,s standards not the customs of
individual countries or regions.
Not (d) because the action is e!plicitly
prohibited by the /ode of +thics.
%%%. CIA May 96 I.#0
Correct Answer is (A)
Answer (a) is correct. "his is part of the
introduction to the ##A /ode of +thics.
Not (b) since they are part of internal auditing
standard.
Not (c) because the 2ules of /onduct are an
aid in interpreting the -rinciples.
Not (d) because this is the purpose of the
statement of responsibility.
&&&. CIA Nov 9$ I.$3
Correct Answer is (D)
Not (a) because this action violates the /ode of
+thics.
Not (b) because this action violates the /ode of
+thics.
Not (c) because this action violates the /ode of
+thics but the auditor should report the
unlawful activities to the appropriate personnel
within the organi%ation not to a regulatory
agency.
Answer (d) is correct. "he auditor should
inform the appropriate authorities in the
organi%ation if there are sufficient indicators of
the commission of a fraud.
&' A(41
) 2004 Powers Resources Corporation.
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iii. CIA Nov 96 I.6
Correct Answer is (D)
Not (a) because although there is a mineral
difference in the standard the auditor ought to
be guided by the most applicable set of
standards.
Not (b) because although there is a mineral
difference in the standard the auditor ought to
be guided by the most applicable set of
standards.
Not (c) because the auditor ought to be guided
by the applicable ##A Standards and
governmental auditing standards.
Answer (d) is correct. 8embers and /#As are
re*uired to follow the ##A standards. Additional
governmental audit standards should also be
followed on these governmental grants audit.
'''. CIA Nov 96 I.16
Correct Answer is ()
Not (a) because the mere e!istence of
/ompany A,s /ode of +thics does not assure
that its tenets are followed.
Answer (b) is correct. A formal /ode of +thics
effectively communicates acceptable values to
all members provides a method of policing and
disciplining members for violations establishes
objective standards against which individuals
can measure their own performance and
communicates the organi%ation,s value system
to outsiders.
Not (c) because an audit of ethical behavior is
not dependent on the e!istence of a formal
/ode of +thics. -olicies however may provide
the criteria for such an audit.
Not (d) because an audit of ethical behavior is
not dependent on the e!istence of a formal
/ode of +thics. -olicies however may provide
the criteria for such an audit.
(((. CIA May 96 I.61
Correct Answer is ()
Not (a) because according to the /ode of
+thics.
Answer (b) is correct. "he director has to
avoid conflict of interest or activity that might
impair or be presumed to impair their unbiased
assessment. "he director may not accept
anything of value that may impair his
professional judgment. 2eference to /ode of
+thics section l0 and 0.
Not (c) according to the /ode of +thics.
Not (d) according to the /ode of +thics.
))). CIA Nov 94 I.$!
Correct Answer is ()
Not (a) because telling the neighbor about the
plant closing is the only violation of the /ode of
+thics.
Answer (b) is correct. According to the ##A
/ode of +thics (Article ll l0 0 0lll and ?)
telling the neighbor about a plant closing
(item5) is the only violation
Not (c) because telling the neighbor about the
plant closing is the only violation of the /ode of
+thics.
Not (d) because telling the neighbor about the
plant closing is the only violation of the /ode of
+thics.
) 2004 Powers Resources Corporation.
All rights reserved
&' A(4!
Powers CIA Review
***. CIA Nov 94 I.$3
Correct Answer is ()
Not (a) because receiving an item of value from
a customer of the employer (item=) and failure
to disclose the kickback (item D) are the only
violations.
Answer (b) is correct. According to the ##A
/ode of +thics (Article ll l0 0 0lll and ?)
receiving an item of value from a customer of
the employer (item=) and failure to disclose the
kickback (item D) are the only violations.
Not (c) because receiving an item of value from
a customer of the employer (item=) and failure
to disclose the kickback (item D) are the only
violations.
Not (d) because receiving an item of value from
a customer of the employer (item=) and failure
to disclose the kickback (item D) are the only
violations.
nnn. CIA Nov 94 I.$4
Correct Answer is (C)
Not (a) because receiving royalties from a book
publisher is the only action that is not a
violation of the /ode.
Not (b) because receiving royalties from a book
publisher is the only action that is not a
violation of the /ode. "he receipt of royalties is
not a violation because it is not a basis for
presuming an impairment of professional
judgment.
Answer (c) is correct. According to the ##A
/ode of +thics (Article ll l0 0 0lll and ?)
receiving royalties from a book publisher (item
E) is the only action that is not a violation and
the other (item 6> 66 64) are clear violations.
Not (d) because receiving royalties from a book
publisher is the only action that is not a
violation of the /ode.
ooo. CIA Nov 96 I.43
Correct Answer is (C)
Not (a) because it is clearly violates the ##As
/ode Article l0 but statement ll is also correct.
Not (b) because it could cause a conflict of the
type describes and would be considered a
discreditable act (Article lll). &owever
statement l is also correct.
Answer (c) is correct. "he action may
represent a violation of the code for both of the
reason given.
Not (d) because it is a violation of the /ode.
+++. CIA Nov 96 I.33
Correct Answer is (A)
Answer (a) is correct. "he /ode of +thics and
Standards do not provide for strict
confidentiality of information.
Not (b) because the option is allowable and an
attorney can provide legal confidentiality.
Not (c) because the option is allowable but is
not a guarantee of confidentiality.
Not (d). "o maintain confidentialityF the
employer can be directed to other option to
provide the information.
,,,. CIA Nov 96 I.3!
Correct Answer is (A)
Answer (a) is correct. Auditor must e!hibit
loyalty to the organi%ation but not be a party to
any illegal activity. "hus auditors must comply
with legal subpoenas.
Not (b) because article 0lll prohibits auditors
from using information for personal gain.
Not (c) because article 0 prohibits auditors
from accepting gifts that may impair or be
presumed to impair their professional
judgment.
Not (d) because article ll prohibits auditors from
knowingly being a party to any illegal activity.
&' A(43
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rrr. CIA May 9# I.10
Correct Answer is (D)
Not (a) because the employee,s patenting of
new developments violates the general policy
that all(important new discoveries are the
property of the company. 9urthermore if the
practice is an alternative way to provide
benefits to an employee it may violate
employee compensation rules. #t may also
need to be reported to various ta!ing
authorities.
Not (b) because failing to report the violation of
company policy is contrary to "he ##A /ode of
+thics Standards.
Not (c) because failing to report the violation of
company policy is contrary to "he ##A /ode of
+thics Standards.
Answer (d) is correct. According to the
Standards internal auditors should
communicate engagement results. 2ule of
/onduct ;.4 states 3#nternal auditors shall
perform internal auditing services in
accordance with the Standards for the
-rofessional -ractice of #nternal Auditing3. 2ule
of /onduct 4.5 states 3#nternal auditors shall
disclose all material facts known to them that if
not disclosed may distort the reporting of
activities under review3. &ence the failure to
report violates "he ##A /ode of +thics
Standards.
sss. CIA May 9# I.#0
Correct Answer is (D)
Not (a) because according to 2ule of /onduct
6.4 3#nternal auditors shall observe the law and
make disclosures e!pected by the law and the
profession3. 9ailure to comply with a subpoena
is illegal.
Not (b) because the hospital is not a competitor
or supplier of the auditor,s employer. &ence no
conflict of interest is involved.
Not (c) because giving a speech is not a
violation of "he ##A /ode of +thics. #n fact "he
##A,s motto is 3progress through sharing3.
Answer (d) is correct. According to 2ule of
/onduct 5.4 3#nternal auditors shall not use
information for any personal gain or in any
manner that would be contrary to the law or
detrimental to the legitimate and ethical
objectives of the organi%ation3.
ttt. CIA May 9# I.66
Correct Answer is (C)
Not (a) because the auditor is not withholding
information because he or she has passed the
information along to the director of internal
audit. "he information may be useful in a
subse*uent audit in the marketing area.
Not (b) because the auditor is not withholding
information because he or she has passed the
information along to the director of internal
audit. 9urthermore the auditor has
documented a red flag that may be important in
a subse*uent audit. "his action also does not
violate the Standards.
Answer (c) is correct. "here is no violation of
either "he ##A /ode of +thics or the Standards.
Not (d) because the auditor is not withholding
information because he or she has passed the
information along to the director of internal
audit. 9urthermore the auditor has
documented a red flag that may be important in
a subse*uent audit. "his action also does not
violate the Standards.
) 2004 Powers Resources Corporation.
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&' A(44
Powers CIA Review
---. CIA May 9# I.64
Correct Answer is ()
Not (a) because acceptance of the gift could
easily be presumed to have impaired the /#A,s
professional judgment. 9urthermore the gift
could easily be perceived as a kickback.
Answer (b) is correct. As long as individual is
a certified #nternal Auditor he or she should be
guided by the professions /ode of +thics in
addition to the organi%ations code of conduct.
Article 0 of the /ode of +thics would preclude
such a gift because it could be presumed to
have influenced the individuals decisions.
Not (c) because acceptance of the gift could
easily be presumed to have impaired the /#A,s
professional judgment. 9urthermore the gift
could easily be perceived as a kickback.
Not (d) because acceptance of the gift could
easily be presumed to have impaired the /#A,s
professional judgment. 9urthermore the gift
could easily be perceived as a kickback.
vvv. CIA Nov 94 I.$#
Correct Answer is (A)
Answer (a) is correct. 2ule of /onduct 6.4
states 3#nternal auditors shall observe the law
and make disclosures e!pected by the law and
the profession3. "hus complying with a valid
subpoena does not violate "he ##A /ode of
+thics.
Not (b) because rule of /onduct 5.4 states
3#nternal auditors shall not use information for
any personal gain or in any manner that would
be contrary to the law or detrimental to the
legitimate and ethical objectives of the
organi%ation3.
Not (c) because rule of /onduct 4.4 states
3#nternal auditors shall not accept anything that
may impair or be presumed to impair their
professional judgment3.
Not (d) because rule of /onduct 6.5 states
3#nternal auditors shall not knowingly be a party
to any illegal activity or engage in acts that are
discreditable to the profession of internal
auditing or to the organi%ation.3 8oreover 2ule
of /onduct 4.5 states 3#nternal auditors shall
disclose all material facts known to them that if
not disclosed may distort the reporting of
activities under review3.
&' A(4$
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www. CIA May 94 I.30
Correct Answer is (C)
Not (a) because including facts in the working
papers is not a violation of the Standards or the
/ode.
Not (b) because additional discussion with the
audit manager is not necessary before
discussion with the director of internal audit.
Answer (c) is correct. #t is the director of
internal auditing who is responsible to
communicate with the e!ternal auditor (##As
/ode of +thics)
Not (d) because resigning is an option always
available to the auditor without a violation of the
Standards or the /ode.
.... CIA May 9$ I.$#
Correct Answer is (D)
Not (a) because this could be viewed as
general information about @best practices7 and
is acceptable to carry to the ne!t employer.
Not (b) because the auditor is applying
knowledge of a commonly used standards
and audit techni*ues. #t is not confidential
information.
Not (c) because this information could be
viewed as part of continuing education of the
auditor. As long as it is general information
about @best practices7 and is acceptable to
carry to the ne!t employer.
Answer (d) is correct. All the three answers
are not violated.
yyy. CIA Nov 9! I.48
Correct Answer is (D)
Not (a) because sanctions against /#As must
be imposed by the $oard of .irectors.
Not (b) because the /#A violated the law and
performed an act discreditable to the
profession.
Not (c) because sanctions against /#As must
be imposed by the $oard of .irectors.
Answer (d) is correct. "he sanction must be
imposed by the $oard. "his act is probably
severe enough to warrant forfeiture of the /#A
designation (##A /ode of +thics Applicability
section).
///.CIA May 9# I.60
Correct Answer is ()
Not (a) because this is the definition of
standards given in the foreword of the
Standards for the -rofessional -ractice of
#nternal Auditing.
Answer (b) is correct. "he /ode of +thics
defines the minimum ethical standards for the
internal auditor.
Not (c) because the Standards define the
practice of internal auditing 3as it should be3.
Not (d) because the Standards are applicable
across all industries and types of internal audit
organi%ations.
) 2004 Powers Resources Corporation.
All rights reserved
&' A(46