Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 120

Which of the following statements is true in regard to policies and procedures for guiding the internal audit activity?

Answer options

• A. A small internal audit activity may be managed informally.
• B. All internal audit activities need formal policies and procedures to guide them regardless of size.
• C. A large internal audit activity may be managed informally if the chief audit executive decides to do so.
• D. There is no need for separate policies and procedures if audits are conducted in accordance with The IIA's International Professional Practices Framework.

Correct answer: A

Explanation

The correct answer, A, indicates that smaller internal audit functions can operate without strict formalities, which is practical for their scale. Option B is incorrect as it suggests that all activities, regardless of size, need formal guidelines, which is not necessary for smaller teams. Option C is misleading because it implies that larger teams can also operate informally without justification, and option D incorrectly states that following a framework eliminates the need for separate policies and procedures.