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

According to IIA guidance, the internal audit activity can consult on CSR program design and implementation, serve as an advisor on CSR governance and risk management, and identify and mitigate risks to help meet the CSR program objectives. These roles enable the internal audit to add value through both advisory and assurance services regarding CSR, aligning with their expertise in governance, risk management, and control.References: IIA guidance on the role of internal auditing in corporate social responsibility; Standards on advisory services.

If fraud is suspected, it is crucial to follow the organization’s protocol for reporting such suspicions. The chief audit executive should be informed so that appropriate steps can be taken, including involving fraud investigators if necessary. References:

• IIA Standard 1210.A2: Internal auditors must have sufficient knowledge to identify indicators of fraud.
• IIA Practice Guide: Internal Auditing and Fraud.

The chief audit executive (CAE) may decide to outsource an audit of the organization's cloud governance due to a lack of proficiency within the internal audit staff. Cloud governance involves specialized knowledge and skills related to cloud technologies, security, compliance, and risk management. If the internal audit team lacks the necessary expertise to perform a comprehensive and effective audit in this area, outsourcing to external experts ensures that the audit is conducted with the required depth and quality.

References:

• IIA Standard 1210: Proficiency
• IIA Standard 2070: External Service Provider and Organizational Responsibility for Internal Auditing

When the chief audit executive (CAE) reports to the chief financial officer (CFO), it can create a potential conflict of interest and impair the independence of the internal audit activity. This reporting structure may lead to limitations in the scope of engagements, particularly when auditing areas under the CFO's purview. Independence and objectivity are critical for the effectiveness of internal auditing, and reporting to the CFO can undermine these principles, restricting the ability to audit financial and other related areas without bias or undue influence.

References:

• The IIA Standards: Standard 1110 – Organizational Independence: "The chief audit executive must report to a level within the organization that allows the internal audit activity to fulfill its responsibilities. The chief audit executive must confirm to the board, at least annually, the organizational independence of the internal audit activity."
• IIA Practice Guide: "Independence and Objectivity": Discusses the importance of appropriate reporting lines to maintain audit independence and avoid conflicts of interest.