Certified Internal Auditor (CIA) Practice Test

What should an internal auditor do when presented with a gift of moderate value from a division manager?

1. Accept it, because its value is insignificant.

2. Not accept it prior to submission of final engagement communication.

3. Not accept it if it may impair the auditor's judgment.

4. Not accept it, regardless of circumstances, due to its significant value.

The correct answer is: Not accept it if it may impair the auditor's judgment.

In the context of internal auditing, maintaining independence and objectivity is paramount. When an internal auditor is presented with a gift, the most appropriate course of action is to consider whether accepting the gift could impair their judgment or create a conflict of interest. By choosing not to accept a gift if it may impair the auditor's judgment, the auditor upholds ethical standards and ensures that their ability to conduct an unbiased audit is preserved. The ethical guidelines and professional standards for internal auditors emphasize the importance of avoiding any actions that might appear to compromise one’s impartiality. While the value of the gift might be considered moderate, the key determinant should be the potential influence it could exert over the auditor's decisions or the perception of those decisions by others. Thus, the focus on judgment and the implications of accepting gifts is central to maintaining the integrity of the audit process. Considering other options, accepting the gift solely based on its insignificant value overlooks the broader ethical implications and the auditor's responsibility to remain impartial. Not accepting it prior to final engagement communication does not account for the preliminary nature of auditors' conversations, as the potential for impaired judgment exists regardless of the timing. Declining a gift purely due to its significant value does not allow for circumstances where a moderate gift might legitimately be