Here are case-based MCQs with answers focused specifically on objectivity, integrity, independence, proficiency, and professional credibility — topics emphasized in the CIA Part 1 (New Syllabus 2025).FIRST SOLVE..THEN CHECK ✅ YOURSELF, ANSWERS ARE AT THE END..
✅ OBJECTIVITY & INDEPENDENCE
Q1 — Case
An internal auditor in a multinational company has been asked to audit a division where a close relative is a senior manager. The auditor believes they can remain unbiased.
Which of the following is the best course of action according to internal audit standards?
A. Accept the assignment but disclose the relationship to the division manager.
B. Request reassignment to a different audit to avoid any perception of bias.
C. Proceed with the audit because the auditor feels objective.
D. Conduct the audit with limited reporting.
✅ Answer:
Q2 — Case
During an audit of procurement controls, an auditor realizes they’ve developed a close friendship with one of the procurement supervisors. The supervisor often provides informal suggestions during audit work.
What should the auditor do?
A. Disregard this friend’s influence but continue the audit.
B. Document the relationship but remain on the engagement.
C. Inform the audit manager and remove themselves from the audit if needed.
D. Accept suggestions as long as they help audit work.
✅ Answer:
✅ INTEGRITY & PROFESSIONAL BEHAVIOR
Q3 — Case
An internal auditor discovers evidence of expense fraud by a senior executive. The executive threatens that disclosing the findings will harm the auditor’s career.
According to professional standards, the internal auditor should:
A. Refrain from reporting to protect their job.
B. Report the findings to the audit committee or equivalent authority.
C. Modify the findings to reduce severity.
D. Discuss the issue only with the executive to avoid conflict.
✅ Answer:
Q4 — Case
An internal audit manager finds that a long-serving junior auditor has been inflating audit hours on timesheets to receive higher productivity scores.
What is the most appropriate action for the manager?
A. Ignore it to maintain team morale.
B. Report it to human resources or audit leadership and take corrective action.
C. Adjust the hours themselves without notifying anyone.
D. Advise the junior auditor to be more honest in future.
✅ Answer:
✅ PROFICIENCY & DUE PROFESSIONAL CARE
Q5 — Case
An internal audit team is assigned to evaluate complex IT security controls. None of the team members have experience or certification in IT auditing.
The best action before performing the engagement is to:
A. Proceed and learn on the job.
B. Outsource or involve auditors with appropriate IT expertise.
C. Skip the detailed audit steps.
D. Rely on management’s assurance.
✅ Answer:
Q6 — Case
During a financial statement audit, an internal auditor encounters accounting treatments that are unfamiliar and potentially misleading.
Which action shows due professional care?
A. Ignore the unfamiliar treatments and proceed.
B. Consult with a senior auditor or accounting specialist.
C. Conclude the accounts are correct because management authorized them.
D. Guess the appropriate treatment based on experience in other areas.
✅ Answer:
✅ PROFESSIONAL CREDIBILITY
Q7 — Case
An internal audit report understated a significant control deficiency because the auditor believed management would be upset and delay future support for audit work.
Which of the following BEST describes what was compromised?
A. Audit efficiency
B. Professional credibility
C. Auditor independence
D. Regulatory compliance
✅ Answer:
Q8 — Case
A chief audit executive (CAE) wants to increase the internal audit’s visibility and influence in the organization. However, their reports contain frequent inaccuracies and unsupported conclusions.
Which of the following should the CAE do FIRST?
A. Assign more audits to junior auditors to build experience.
B. Improve quality assurance and training in the internal audit practice.
C. Focus on public relations to enhance perception.
D. Reduce the number of audits issued each year.
✅ Answer:
✅ KEY TAKEAWAYS
✔ Objectivity & Independence: Avoid conflicts and perceptions of bias.
✔ Integrity: Always be truthful and report significant issues even under pressure.
✔ Proficiency: Ensure skills and knowledge are adequate for assignments.
✔ Due Professional Care: Use judgment, seek help, and apply audit standards.
✔ Professional Credibility: Built through reliability, accuracy, and ethical conduct.
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ANSWERS...
✅ OBJECTIVITY & INDEPENDENCE
Q1 — Case
An internal auditor in a multinational company has been asked to audit a division where a close relative is a senior manager. The auditor believes they can remain unbiased.
Which of the following is the best course of action according to internal audit standards?
A. Accept the assignment but disclose the relationship to the division manager.
B. Request reassignment to a different audit to avoid any perception of bias.
C. Proceed with the audit because the auditor feels objective.
D. Conduct the audit with limited reporting.
✅ Answer: B – Auditors must avoid conflicts of interest and maintain independence; disclosing isn’t enough when a close relative is involved.
Principle: Objectivity & independence require avoiding situations that impair unbiased judgment.
Q2 — Case
During an audit of procurement controls, an auditor realizes they’ve developed a close friendship with one of the procurement supervisors. The supervisor often provides informal suggestions during audit work.
What should the auditor do?
A. Disregard this friend’s influence but continue the audit.
B. Document the relationship but remain on the engagement.
C. Inform the audit manager and remove themselves from the audit if needed.
D. Accept suggestions as long as they help audit work.
✅ Answer: C – The auditor must address the possible impairment of objectivity by involving supervision and changing assignment if necessary.
Principle: Objectivity also means avoiding relationships that compromise or appear to compromise judgment.
✅ INTEGRITY & PROFESSIONAL BEHAVIOR
Q3 — Case
An internal auditor discovers evidence of expense fraud by a senior executive. The executive threatens that disclosing the findings will harm the auditor’s career.
According to professional standards, the internal auditor should:
A. Refrain from reporting to protect their job.
B. Report the findings to the audit committee or equivalent authority.
C. Modify the findings to reduce severity.
D. Discuss the issue only with the executive to avoid conflict.
✅ Answer: B – Auditors must maintain integrity and report significant findings to the appropriate level.
Principle: Integrity means honesty and truthfulness; it overrides personal threats or pressure.
Q4 — Case
An internal audit manager finds that a long-serving junior auditor has been inflating audit hours on timesheets to receive higher productivity scores.
What is the most appropriate action for the manager?
A. Ignore it to maintain team morale.
B. Report it to human resources or audit leadership and take corrective action.
C. Adjust the hours themselves without notifying anyone.
D. Advise the junior auditor to be more honest in future.
✅ Answer: B – The situation involves ethical misconduct and must be reported and addressed appropriately.
Principle: Integrity applies not only to audit results but also professional conduct.
✅ PROFICIENCY & DUE PROFESSIONAL CARE
Q5 — Case
An internal audit team is assigned to evaluate complex IT security controls. None of the team members have experience or certification in IT auditing.
The best action before performing the engagement is to:
A. Proceed and learn on the job.
B. Outsource or involve auditors with appropriate IT expertise.
C. Skip the detailed audit steps.
D. Rely on management’s assurance.
✅ Answer: B – Auditors must have the knowledge, skills, or bring in specialists to conduct the audit properly.
Principle: Proficiency and due professional care require competent personnel and appropriate skills.
Q6 — Case
During a financial statement audit, an internal auditor encounters accounting treatments that are unfamiliar and potentially misleading.
Which action shows due professional care?
A. Ignore the unfamiliar treatments and proceed.
B. Consult with a senior auditor or accounting specialist.
C. Conclude the accounts are correct because management authorized them.
D. Guess the appropriate treatment based on experience in other areas.
✅ Answer: B – Seeking expert input improves audit quality and accuracy.
Principle: Due professional care means using appropriate competence and obtaining help when needed.
✅ PROFESSIONAL CREDIBILITY
Q7 — Case
An internal audit report understated a significant control deficiency because the auditor believed management would be upset and delay future support for audit work.
Which of the following BEST describes what was compromised?
A. Audit efficiency
B. Professional credibility
C. Auditor independence
D. Regulatory compliance
✅ Answer: B – Professional credibility suffers when auditors alter findings to appease management.
Principle: Credibility requires accurate, complete, unbiased reporting.
Q8 — Case
A chief audit executive (CAE) wants to increase the internal audit’s visibility and influence in the organization. However, their reports contain frequent inaccuracies and unsupported conclusions.
Which of the following should the CAE do FIRST?
A. Assign more audits to junior auditors to build experience.
B. Improve quality assurance and training in the internal audit practice.
C. Focus on public relations to enhance perception.
D. Reduce the number of audits issued each year.
✅ Answer: B – Without quality and accuracy, credibility cannot be built.
Principle: Credibility derives from consistent quality, not visibility alone.
