Certified Internal Auditor (CIA) Practice Test

If an internal auditor interrogates a clerk suspected of embezzlement, which ethical rule might be violated?

1. Failing to exercise due diligence.

2. Lack of loyalty to the organization.

3. Lack of competence in the area of investigation.

4. Failing to comply with the law.

The correct answer is: Lack of competence in the area of investigation.

When considering the ethical standards applicable to internal auditors, the aspect of competence is critical. Internal auditors must possess the necessary skill set to conduct investigations, ensuring that they are effectively equipped to handle the complexities of financial irregularities such as embezzlement. If an auditor lacks the competence required for proper interrogation techniques or understanding the legal implications of such actions, it poses a significant risk to the integrity of the investigation. Competency is about being adept at not only understanding financial data and systems but also being familiar with the appropriate procedures for conducting interviews and interrogations in an ethical manner, which includes adhering to the laws governing employee rights and workplace investigations. An internal auditor must know how to navigate potential legal repercussions and ensure that the rights of the person being interrogated are respected, as failure to do so could compromise the investigation and the auditor’s professional standing. This emphasis on competence aligns with the ethical imperative for internal auditors to maintain professional skill levels that are relevant to their work and to continuously improve their expertise. If the auditor conducting the interrogation lacks this competence, it could undermine the audit process and violate ethical standards. The focus on competence in the context of the situation highlights its importance, reinforcing that internal auditors must be trained and knowledgeable when addressing serious matters such as suspected