Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 210

Which of the following situations is most likely to prompt the internal audit activity to disclose its nonconformance with the Standards?

Answer options

• A. One of the organization's senior internal auditors owns a side business, though to date, no sales have been made to this business.
• B. The annual internal audit plan includes performance audits of main business processes, but reviews of high-risk development projects were not considered.
• C. The internal audit activity committed to carrying out an audit of documentation on investment hedging, and a hedging expert was contracted to assist with the engagement.
• D. A periodic quality self-assessment of the internal audit activity identified a number of improvement areas with regard to key performance indicators.

Correct answer: D

Explanation

The correct answer, D, indicates that the internal audit activity has recognized its shortcomings through a self-assessment, which is a significant reason for disclosing nonconformance. Options A, B, and C do not reflect situations where there is a direct acknowledgment of nonconformance with the Standards; rather, they describe normal operational scenarios or commitments that do not indicate a failure to meet auditing standards.