Exam IIA-CIA-Part1 topic 6 question 652 discussion

Actual exam question from IIA's IIA-CIA-Part1

Question #: 652
Topic #: 6

[All IIA-CIA-Part1 Questions]

Which of the following would be considered a violation of The IIA's mandatory guidance on independence?

A. The chief audit executive (CAE) reports functionally to the board and administratively to the chief financial officer.
B. The board seeks senior management's recommendation before approving the annual salary adjustment of the CAE.
C. The CAE confirms to the board, at least once every five years, the organizational independence of the internal audit activity.
D. The CAE updates the internal audit charter and presents it to the board for approval periodically, not on a specific timeline.

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Suggested Answer: C 🗳️

by Kozy at July 13, 2025, 4:25 p.m.

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Kozy

2 weeks, 5 days ago

Selected Answer: B

According to the IIA's mandatory guidance—specifically the Core Principle for Independence and Objectivity and Standard 1110 – Organizational Independence—the board must be solely responsible for oversight of the CAE, including hiring, evaluating, compensating, and removing the CAE, without undue influence from management. Option B is a violation because seeking senior management’s recommendation on the CAE’s compensation may compromise the perception and reality of independence. Even if the board has the final say, such influence undermines organizational independence.

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