CIA Question of the Day: Internal Audit Charter and Access

Quiz Yazan Ibrahim
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CIA exam practice question — CIA Question of the Day: Internal Audit Charter and Access

CIA exam practice question: daily practice for the Certified Internal Auditor (CIA) exam — domain: Part 1: Essentials of Internal Auditing.

Question

The chief audit executive (CAE) is revising the internal audit charter. The CEO requests that internal audit be restricted from accessing certain confidential personnel files unless specifically authorized for each engagement, and asks the CAE to include this limitation in the charter. What should the CAE do?

  • A. Agree to the CEO's limitation to preserve cooperation and continue audit work under the new restriction
  • B. Include the CEO's requested limitation in the draft charter with management's written acknowledgement and proceed with audits under those terms
  • C. Present the proposed limitation to the audit committee/board, seek approval for a charter that explicitly grants internal audit unrestricted access to records, personnel, and physical properties, and escalate unresolved restrictions to the board
  • D. Proceed with audits using alternative procedures to avoid those personnel files and disclose the access limitation in engagement reports
Show the answer and explanation

Correct answer: C. Present the proposed limitation to the audit committee/board, seek approval for a charter that explicitly grants internal audit unrestricted access to records, personnel, and physical properties, and escalate unresolved restrictions to the board

The best course is to take the issue to the audit committee/board and seek a charter that preserves internal audit's authority, including unrestricted access to records, personnel and properties. Professional standards require the charter be approved by the board and ensure internal audit's independence and sufficient access to perform engagements. Option A is wrong because accepting limitations undermines independence and the ability to provide assurance. Option B is wrong because management cannot unilaterally restrict access that affects independence; board approval is required for the charter. Option D is wrong because relying on alternative procedures and disclosures does not resolve the root limitation and may impair audit effectiveness.

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