Certified Internal Auditor (CIA) Practice Test

Controls provide assurance that desired actions will be accomplished when objectives are established in writing and?

1. Standards are adopted, results are compared, and corrective actions are taken.

2. Communicated to employees and updated by personnel as conditions change.

3. Policies are outlined in manuals for trained personnel.

4. Internal reviews of objectives are conducted periodically.

The correct answer is: Standards are adopted, results are compared, and corrective actions are taken.

The correct response highlights that controls provide assurance through a structured process involving the adoption of standards, regular comparison of results, and timely corrective actions. This systematic approach is crucial in ensuring that the organization's goals are met effectively. When objectives are established in writing, having standards in place ensures there is a clear benchmark against which performance can be measured. By comparing actual results to these standards, organizations can identify variances or gaps in performance. This analysis forms the basis for corrective actions, which are necessary to address any discrepancies and realign activities with established objectives. Consequently, this continuous feedback loop not only enhances accountability but also fosters a culture of improvement and adaptability within the organization. This structured process is more comprehensive and robust than simply communicating objectives to employees or outlining policies in manuals, as those actions alone do not necessarily ensure that desired results will be achieved. Therefore, the focus on standards, result comparisons, and corrective actions is fundamental to the effectiveness of internal controls.