IIA Updated IIA-CIA-Part1 Exam Questions and Answers by artemis

During an audit engagement that examines the effectiveness of risk management processes, the internal audit activity should evaluate how the organization manages fraud risk. This approach ensures that the organization’s risk management practices are comprehensive and effectively address all significant areas of risk, including the potential for fraud.References: The Institute of Internal Auditors (IIA) - International Standards for the Professional Practice of Internal Auditing, especially those related to risk management.

The best evidence of conformance with the Standards concerning the proficiency required of the internal audit activity would be a listing of employee profiles and certifications. This documentation provides concrete evidence of the knowledge, skills, and competencies of the internal audit staff, ensuring that they meet the requirements set forth by the professional standards and are capable of performing their duties effectively. This also aligns with the Standards' requirement for the internal audit activity to possess the knowledge, skills, and other competencies needed to perform its responsibilities.References: The Institute of Internal Auditors (IIA) - International Standards for the Professional Practice of Internal Auditing

Requesting advances against a monthly salary frequently, as in option C, could indicate financial stress or potentially dubious financial management behaviors. This situation could heighten an auditor's professional skepticism regarding potential fraud due to possible motives or incentives to commit fraud.References: Internal Auditing Standards and professional guidelines on fraud risk awareness and assessment.

It would be considered problematic for the chief audit executive (CAE) to provide assurance services over the payroll function if, prior to becoming the CAE, the CAE was the payroll manager. This scenario poses a conflict of interest and impacts the objectivity required for assurance services, as the CAE might have inherent biases or a conflict due to previous roles and responsibilities within the payroll function.References: The Institute of Internal Auditors (IIA) - Code of Ethics and International Standards for the Professional Practice of Internal Auditing.