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

According to fraud theory, specifically the Fraud Triangle, the root causes of fraud are typically identified as opportunity, rationalization, and perceived need (or pressure). Among the options given, "Opportunity and perceived need" most closely align with two of these three key elements. Opportunity provides the means to commit fraud, while perceived need motivates the individual to justify fraudulent actions.References: Association of Certified Fraud Examiners (ACFE) - Fraud Triangle Theory

When an internal auditor discovers fraud-related red flags during an audit engagement, the action that best demonstrates due professional care is to perform further testing to verify the existence of fraud. This approach ensures that any findings of fraud are based on thorough investigation and sufficient evidence, rather than premature conclusions. This procedure aligns with the IIA's guidance on due diligence and the thorough investigation of anomalies.References: IIA International Standards for the Professional Practice of Internal Auditing.

Considering the possibility of noncompliance or irregularities at all times during an engagement best demonstrates an internal auditor's due professional care. This proactive approach to skepticism ensures that the auditor remains vigilant and prepared to identify any indications of noncompliance or irregular activities, which is central to upholding the integrity of the audit process.References: IIA standards on due professional care, which emphasize the importance of maintaining an attitude of professional skepticism throughout the audit process.

According to the IIA's guidance on risk management, the internal audit activity is not responsible for managing risks directly but plays a key role in evaluating the effectiveness of risk management processes. One way internal auditors contribute is by using established risk management or control frameworks to assist in identifying and assessing risks during their audits. This enables auditors to provide valuable insights and recommendations regarding risk management practices in the organization.References: The Institute of Internal Auditors (IIA) - Guidance on Risk Management