These competencies include an understanding of

These competencies include an understanding of management principles. An understanding is the ability to
apply broad knowledge to situations likely to be encountered, to recognize significant deviations, and to be
able to carry out the research necessary to arrive at reasonable solutions (PA 1210-1).
Source: CIA 1195 I-14
27. Answer (B) is correct . The required competencies include an appreciation of the fundamentals of business
subjects, such as accounting, economics, commercial law, taxation, finance, quantitative methods,
information technology, risk management, and fraud. An appreciation is the ability to recognize the existence
of problems or potential problems and to identify the additional research to be undertaken or the assistance
to be obtained. Only if internal auditors work extensively with financial records and reports must they have
proficiency in accounting principles and techniques (PA 1210-1). Source: CIA 1194 I-48

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28. Answer (D) is correct . The required competencies include an appreciation of the fundamentals of business
subjects, such as accounting, economics, commercial law, taxation, finance, quantitative methods,
information technology, risk management, and fraud. An appreciation is the ability to recognize the existence
of problems or potential problems and to determine the additional research to be undertaken or the
assistance to be obtained (PA 1210-1). Source: CIA 592 II-5
29. Answer (B) is correct . Internal auditors need “skills in dealing with people, understanding human
relations, and maintainin g satisfactory relationships with engagement clients” (PA 1210 -1). A consultative
approach to the engagement reflects the application of such skills. Consultation with the engagement client
not only facilitates the planning and performance of the engagement but is a courtesy that enhances the
internal auditor-client relationship. Developing a positive relationship produces a more favorable
environment for the engagement effort. Moreover, involving the client in the engagement process is likely
to increase acceptance of recommended changes. Source: CIA 595 III-2
30. Answer (C) is correct . Internal auditors must be skilled in oral and written communications so that they
can clearly and effectively convey such matters as engagement objectives, evaluations, conclusions, and
recommendations (PA 1210-1). However, the risk assessment is not necessarily a matter that must be
communicated to an engagement client. Source: CIA 1195 I-49
31. Answer (C) is correct . Internal auditors must have skills in oral and written communications to clearly and
effectively convey such matters as engagement objectives, evaluations, conclusions, and recommendations
(PA 1210-1). Source: CIA 591 I-8