Certified Internal Auditor (CIA) Practice Test

When assessing activity risk, what should an internal auditor focus on?

1. Determining risk management strategies.

2. Providing assurance on risk management.

3. Updating risk management processes.

4. Designing controls for identified risks.

The correct answer is: Providing assurance on risk management.

In the context of assessing activity risk, the primary focus of an internal auditor should be on providing assurance on risk management. This involves evaluating the effectiveness of the risk management processes in place, ensuring they adequately identify, assess, and mitigate risks associated with the organization's operations. The assurance provided by the internal auditor helps to give stakeholders confidence that risks are being managed appropriately and that the organization is prepared to address potential challenges that could affect its objectives. This assurance also allows management to make informed decisions about risk management strategies and adjustments. While determining risk management strategies, updating risk management processes, and designing controls for identified risks are all critical aspects of effective risk management, they typically fall under the purview of management and their risk management teams. The internal auditor's role is more about assessing and assuring the effectiveness of these processes rather than directly managing or designing them. This distinction highlights the internal auditor's objective stance and focus on providing an independent evaluation of risk management practices.