CIA Challenge IIA-CIA-Part3-3P Practice Exam Questions For Preparation

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Page 1 of 11

1. An internal auditor is reviewing results from software development integration testing .

What is the purpose of integration testing?

To verify that the application meets staled user requirements.

To verify that standalone programs match code specifications.

To verify that me application would work appropriately for the intended number of users.

To verify that all software and hardware components work together as intended

2. An organization is experiencing a high turnover .

Which of the following can human resources deploy to effectively detect the root cause of turnover?

Require regular performance appraisals

Perform exit interviews

Encourage periodic rotation of employee duties.

Ensure mandatory vacations

3. International marketing activities often begin with:

Standardization.

Global marketing.

Limited exporting.

Domestic marketing.

4. Which of the following is a disadvantage in a centralized organizational structure?

Communication conflicts.

Slower decision making

Loss of economies of scale

Vulnerabilities in sharing knowledge

5. In an analysis of alternative credit-management policies, which of the following components will cause the net present value of receivables on credit sales to increase, if everything else remains constant?

A tougher collections policy that reduces the bad debt loss ratio.

A higher cost per unit sold.

A longer average collection period.

An increase in the cost of capital.

6. An organization with global headquarters in the United States has subsidiaries in eight other nations.

If the organization operates with an ethnocentric attitude, which of the following statements is true?

Standards used for evaluation and control are determined at local subsidiaries, not set by headquarters.

Orders, commands and advice are sent to the subsidiaries from headquarters.

People of local nationality are developed for the best positions within their own country

There is a significant amount of collaboration between headquarters and subsidiaries.

7. Which of the following accounting methods is an investor organization likely to use when buying 40 percent of the stock of another organization?

Cost method

Equity method

Consolidation method

Fair value method

8. The process of scenario planning begins with which of the following steps?

Determining the trends that will influence key factors in the organization's environment.

Selecting the issue or decision that will impact how the organization conducts future business.

Selecting leading indicators to alert the organization of future developments.

Identifying how customers, suppliers, competitors, employees, and other stakeholders will react.

9. An organization is developing a new online collaboration tool for employees. The tool includes a homepage that is customized to each employee according to his department and job function.

Which of the following engagements should be conducted to ensure that the organization has included all departments and job functions in the system before it is implemented?

An application control review

A source code review

A design review

An access control review

10. Which of the following statements about mentoring is true?

1) Mentoring can be used effectively for increasing employee retention

2) Mentoring can be used effectively in reducing employees frustration.

3) Mentoring can be used effectively for increasing organization communication.

4) Mentoring can be used effectively as a short term activity consisting of instruction and training

1 2. and 3 only.

1. 2 and 4 only

1, 3. and 4 only.

1,2. 3, and 4

Page 2 of 11

11. Which of the following techniques is the most relevant when an internal auditor conducts a valuation of an organization's physical assets?

Observation.

Inspection.

Original cost.

Vouching.

12. Which of the following statements is false regarding the internal audit approach when a set of standards other than The IIA's Standards is applicable to a specific engagement?

The internal auditor may cite the use of other standards during audit communications.

If the other standards are government-issued, the internal auditor should apply them in conjunction with The IIA's Standards.

If there are inconsistencies between the other standards and The IIA's Standards, the internal auditor must use the more restrictive standards.

If there are inconsistencies between the other standards and The IIA's Standards, the internal auditor must use the less restrictive standards.

13. An internal auditor has been asked to conduct an investigation involving allegations of independent contractor fraud .

Which of the following controls would be least effective in detecting any potential fraudulent activity?

Exception report identifying payment anomalies.

Documented policy and procedures.

Periodic account reconciliation of contractor charges.

Monthly management review of all contractor activity.

14. Which of the following stages of contracting focuses on aligning the markets with objectives of the organization?

Initiation stage

Bidding stage

Development stage

Negotiation stage

15. All of the following are possible explanations for a significant unfavorable material efficiency variance except:

Cutbacks in preventive maintenance.

An inadequately trained and supervised labor force.

A large number of rush orders.

Production of more units than planned for in the master budget.

16. Which of the following is most important for an internal auditor to check with regard to the database version?

Verify whether the organization uses the most recent database software version

Verify whether the database software version is supported by the vendor.

Verify whether the database software version has been recently upgraded

Verify whether access to database version information is appropriately restricted

17. A manager has difficulty motivating staff to improve productivity, despite establishing a lucrative individual reward system .

Which of the following is most likely the cause of the difficulty?

High degree of masculinity.

Low uncertainty avoidance.

High collectivism.

Low long-term orientation.

18. According to IIA guidance, which of the following is a typical risk associated with the tender process and contracting stage of an organization's IT outsourcing life cycle?

The process is not sustained and is not optimized as planned.

There is a lack of alignment to organizational strategies.

The operational quality is less than projected.

There is increased potential for loss of assets.

19. During an audit of the organization's annual financial statements, the internal auditor notes that the current cost of goods sold percentage is substantially higher than in prior years .

Which of the following is the most likely explanation for this increase?

Cost of raw material inventory items is decreasing.

Process to manufacture goods is more efficient.

Labor productivity to produce goods is increasing.

Write-off of inventory is increasing.

20. Which of the following best demonstrates an organization's ability to recover from a disaster?

Hot site

Cold site

Redundant data center

Regular testing of the disaster plan

Page 3 of 11

21. Which of the following statements regarding program change management is not correct?

The goal of the change management process is to sustain and improve organizational operations.

The degree of risk associated with a proposed change determines if the change request requires authorization.

In order to protect the production environment, changes must be managed in a repeatable, defined, and predictable manner.

All changes should be tested in a non-production environment before migrating to the production environment.

22. Which of the following local area network physical layouts is subject to the greatest risk of failure if one device fails?

Star network.

Bus network.

Token ring network.

Mesh network.

23. Which of the following is classified as a product cost using the variable costing method?

1) Direct labor costs

2) Insurance on a factory.

3) Manufacturing supplies.

4) Packaging and shipping costs

1 and 2

1 and 3

2 and 4

3 and 4

24. An internationally recognized brand name is an entrance barrier to new competitors because new competitors would:

Have to initiate a price war in order to enter the industry.

Face increased production costs.

Face increased marketing costs.

Face higher learning costs, which would increase fixed costs.

25. Which of the following is a logical access control designed to enhance the security of a computer-based application system?

User accounts will be locked alter three unsuccessful attempts to access the system

Users will not be allowed to use any of their last five passwords to access the system

Users will be assigned rights to access the system based on their job responsibilities

Users will automatically lose access to the system after 15 minutes of inactivity

26. Which of the following factors is most responsible for the increasing risk that unauthorized parties may obtain or tamper with personal data?

The lack of legal and industry frameworks on privacy.

The absence of generally accepted privacy principles.

The rapid growth and evolution of technology.

The legislated need to retain sensitive personal information.

27. An organization has a complex systems infrastructure consisting of multiple internally developed, off the shelf, and purchased but significantly customized applications. Some of these applications share databases or process data that is used by another stand-alone application, and interfaces have been written to move data between these applications as needed through batch processing.

Which of the following situations presents the greatest risk exposure given this environment?

Documentation of each system and its interactions, interfaces, and dependencies with other systems and databases is not gathered and maintained.

Batch processing jobs include key financial data that is not posted to the accounting system until the next day. preventing real-time queries.

The job scheduling tool frequently malfunctions, causing scheduled jobs not to run. An error message is sent to IT personnel when a job fails.

The implementation of a major update for a key application is delayed until any potential interdependencies are identified and analyzed.

28. Where complex problems need to be addressed, which of the following communication networks would be most appropriate?

Chain.

All-channel.

Circle.

Wheel.

29. The balanced scorecard approach differs from traditional performance measurement approaches because it adds which of the following measures?

1) Financial measures

2) Internal business process measures.

3) Client satisfaction measures

4) Innovation and learning measures

1 only.

2 and 4 only.

3 and 4 only.

2, 3, and 4 only

30. Which of the following risks is best addressed by encryption?

Information integrity risk.

Privacy risk

Access risk

Software risk

Page 4 of 11

31. Which of the following statements pertaining to a market skimming pricing strategy is not true?

The strategy is favored when unit costs fall with the increase in units produced.

The strategy is favored when buyers are relatively insensitive to price increases.

The strategy is favored when there is insufficient market capacity and competitors cannot increase market capacity.

The strategy is favored when high price is perceived as high quality.

32. Providing knowledge, motivating organizational members, controlling and coordinating individual efforts, and expressing feelings and emotions are all functions of:

Motivation.

Performance.

Organizational structure.

Communication.

33. According to MA guidance, which of the following would indicate poor change management control?

1) Low change success rate

2) Occasional planned outages

3) Low number of emergency changes.

4) Instances of unauthorized changes

1 and 3

1 and 4

2 and 3

2 and 4

34. Which of the following describes the result if an organization records merchandise as a purchase, but fails to include it in the closing inventory count?

The cost of goods sold for the period will be understated.

The cost of goods sold for the period will be overstated.

The net income for the period will be understated.

There will be no effect on the cost of goods sold or the net income for the period.

35. Which of the following engagement observations would provide the least motivation for management to amend or replace an existing cost accounting system?

The distorted unit cost of a service is 50 percent lower than the true cost, while the true cost is 50 percent higher than the competition's cost.

The organization is losing $1,000,000 annually because it incorrectly outsourced an operation based on information from its current system.

The cost of rework, hidden by the current system, is 50 percent of the total cost of all services.

50 percent of total organizational cost has been allocated on a volume basis.

36. The internal audit activity completed an initial risk analysis of the organization's data storage center and found several areas of concern .

Which of the following is the most appropriate next step?

Risk response.

Risk identification.

Identification of context.

Risk assessment.

37. According to the Standards, the internal audit activity must evaluate risk exposures relating to which of the following when examining an organization's risk management process?

1) Organizational governance.

2) Organizational operations.

3) Organizational information systems.

4) Organizational structure.

1 and 3 only

2 and 4 only

1, 2, and 3 only

1, 2, and 4 only

38. What must be monitored in order to manage risk of consumer product inventory obsolescence?

1) Inventory balances.

2) Market share forecasts.

3) Sales returns.

4) Sales trends.

1 only

4 only

1 and 4 only

1, 2, and 3 only

39. in which of the following technical infrastructure audits should attention be turned to physical security and environmental controls?

Database review

Data center review

Network configuration review

Operating systems review

40. An organization invests excess snort-term cash in trading securities.

When of the following actions should an internal auditor take to test the valuation of those securities?

Use the equity method to recalculate the investment carrying value

Confirm the securities held by the broker

Perform a calculation of premium or discount amortization.

Compare the carrying value with current market quotations

Page 5 of 11

41. Which of the following are likely indicators of ineffective change management?

1) IT management is unable to predict how a change will impact interdependent systems or business processes.

2) There have been significant increases in trouble calls or in support hours logged by programmers.

3) There is a lack of turnover in the systems support and business analyst development groups.

4) Emergency changes that bypass the normal control process frequently are deemed necessary.

1 and 3 only

2 and 4 only

1, 2, and 4 only

1, 2, 3, and 4

42. According to IIA guidance, which of the following statements is true with regard to workstation computers that access company information stored on the network?

individual workstation computer controls are not as important as companywide server controls.

Particular attention should be paid to housing workstations away from environmental hazards.

Cybersecurity issues can be controlled at an enterprise level making workstation level controls redundant

With security risks near an all-time high workstations should not be connected to the company network

43. CORRECT TEXT

An organization recently documented its procedures for recovering systems and data after a disaster How are these documented procedures most likely to be used during a disaster simulation exercise?

To help property configure mass communication notification tools

To help identify training needs across the functional areas required to recover systems and data.

To help ensure that the team members who are required to recover systems and data understand their roles.

To help validate the contact information of key personnel required to recover systems and data

44. Which of me following represents an inventory costing technique that can be manipulated by management to boost net income by selling units purchased at a low cost?

First-in first-out method (FIFO)

Last-in first-out method (LIFO)

Specific identification method

Average-cost method

45. Which of the following are typical responsibilities for operational management within a risk management program?

1) Implementing corrective actions to address process deficiencies.

2) Identifying shifts in the organization's risk management environment.

3) Providing guidance and training on risk management processes.

4) Assessing the impact of mitigation strategies and activities.

1 and 2 only

1 and 4 only

2 and 3 only

3 and 4 only

46. A multinational organization involved in online business has planned to set up a help desk service .

Which of the following best describes the role performed by the help desk?

Monitoring access to the online database.

Backing up and maintaining archived data.

Responding to customer inquiries.

Maintaining and assuring network security.

47. Which of the following is a product-oriented definition of a business rather than a market-oriented definition of a business?

We are a people-and-goods mover.

We supply energy.

We make movies.

We provide climate control in the home.

48. Which of the following statements best describes the frameworks set forth by the International Standards Organization?

Globally accepted standards for industries and processes.

Bridging the gaps among control requirements, technical issues, and business risks.

Practical guidance and benchmarks for all organizations that use information systems.

Frameworks and guidance on enterprise risk management, internal control, and fraud deterrence.

49. According to HerzBerg's Two-Factor Theory of Motivation, which of the following factors ate mentioned most often By satisfied employees?

Salary and status

Responsibility and advancement

Work conditions and security

Peer relationships and personal life

50. Which of the following statements about market signaling is correct?

1) The organization releases information about a new product generation.

2) The organization limits a challenger's access to the best source of raw materials or labor.

3) The organization announces that it is fighting a new process technology.

4) The organization makes exclusive arrangements with the channels.

1 and 3 only

1 and 4 only

2 and 3 only

2 and 4 only

Page 6 of 11

51. In mergers and acquisitions, which of the following is an example of a horizontal combination?

Dairy manufacturing company taking over a large dairy farm.

A movie producer acquires movie theaters.

A petroleum processing company acquires an agro-processing firm.

A baker taking over a competitor.

52. Which of the following is a major advantage of decentralized organizations, compared to centralized organizations?

Decentralized organizations are more focused on organizational goals.

Decentralized organizations streamline organizational structure.

Decentralized organizations tend to be less expensive to operate.

Decentralized organizations tend to be more responsive to market changes.

53. Which of the following methods, if used in conjunction with electronic data interchange (EDI), will improve the organization's cash management program, reduce transaction data input time and errors, and allow the organization to negotiate discounts with EDI vendors based on prompt payment?

Electronic funds transfer.

Knowledge-based systems.

Biometrics.

Standardized graphical user interface.

54. Presented below are partial year-end financial statement data (000 omitted from dollar amounts) for companies A and B:

If company A has a quick ratio of 2:1, then it has an accounts receivable balance of:

$100

$200

$300

$500

55. CORRECT TEXT

Which of the following is a project planning methodology that involves a complex series ot required simulations to provide information about schedule risk?

Monte Carlo Analysis

Project Management Information System (PMIS)

Earned Value Management (EVM).

Integrated Project Plan A

56. Which of the following statements accurately describes one of the characteristics that distinguishes a multinational company from a domestic company?

A multinational company has stockholders in other countries.

A multinational company exports its products to other countries.

A multinational company operates outside of its country of origin.

A multinational company uses raw materials and components from more than one country.

57. A rapidly expanding retail organization continues to be tightly controlled by its original small management team .

Which of the following is a potential risk in this vertically centralized organization?

Lack of coordination among different business units.

Operational decisions are inconsistent with organizational goals.

Suboptimal decision-making.

Duplication of business activities.

58. Which of the following is a key component of an organization's cybersecurity governance?

Administrators monitoring the use, assignment and configuration of privileges on the network.

The IT department establishing implementing, and actively managing security configurations.

Management identifying and classifying the types of critical data in the organization's system

Senior management of the organization setting the cybersecurity policy

59. The following transactions and events occurred during the year:

- $300,000 of raw materials were purchased, of which $20,000 were returned because of defects

- $600,000 of direct labor costs were incurred.

- S750.000 of manufacturing overhead costs were incurred .

What is the organization's cost of goods sold for the year?

$1.480.000

$1 500 000

$1,610.000

$1650 000

60. Which of the following application controls verifies the accuracy of transaction results in a system?

Input controls

Output controls

Processing controls

Integrity controls

Page 7 of 11

61. Which of the following is the most likely reason an organization may decide to undertake a stock split?

To keep stock price constant.

To keep shareholders' equity constant.

To increase shareholders' equity.

To enhance the stock liquidity.

62. An internal auditor is assigned to perform data analytics .

Which of the following is the next step the auditor should undertake after she has ascertained the value expected from the review?

Normalize the data

Obtain the data

identify the risks

Analyze the data

63. Which of the following would provide the most relevant assurance that the application under development will provide maximum value to the organization?

Use of a formal systems development lifecycle.

End-user involvement.

Adequate software documentation.

Formalized non-regression testing phase.

64. Which of the following is a strategy that organizations can use to stimulate innovation?

1) Source from the most advanced suppliers.

2) Establish employee programs that reward initiative.

3) Identify best practice competitors as motivators.

4) Ensure that performance targets are always achieved.

1 and 3 only

2 and 4 only

1, 2, and 3 only

1, 2, 3, and 4

65. According to the COSO enterprise risk management (ERM) framework, which of the following is not a typical responsibility of the chief risk officer?

Establishing risk category definitions and a common risk language for likelihood and impact measures.

Defining ERM roles and responsibilities.

Providing the board with an independent, objective risk perspective on financial reporting.

Guiding integration of ERM with other management activities.

66. According to IIA guidance, which of the following corporate social responsibility (CSR) activities is appropriate for the internal audit activity to perform?

Determine the optimal amount of resources for the organization to invest in CS

Align CSR program objectives with the organization's strategic plan.

Integrate CSR activities into the organization's decision-making process.

Determine whether the organization has an appropriate policy governing its CSR activities.

67. Which of the following statements is true regarding a bring-your-own-device (BYOD) environment?

There is a greater need Kr organizations to rely on users to comply with policies and procedures.

With fewer devices owned by the organization, there is reduced need to maintain documented policies and procedures.

Incident response times are less critical in the BYOD environment. compared to a traditional environment

There is greater sharing of operational risk in a BYOD environment.

68. In creating a risk-based plan, which of the following best describes a top-down approach to understanding business processes?

Identifying the processes at the activity level.

Analyzing the organization's strategic plan where the business processes are defined.

Analyzing the organization's objectives and identifying the processes needed to achieve the objectives.

Identifying the risks affecting the organization, the objectives, and then the processes concerned.

69. Which of the following characteristics is most important specifically for a global manager to possess in order to be successful?

Knowledge of different languages.

Understanding of uncertainty avoidance differences

Emotional intelligence

Cultural intelligence

70. Organizations mat adopt just-in-time purchasing systems often experience which of the following?

A slight increase in carrying costs.

A greater need for inspection of goods as the goods arrive.

A greater need for linkage with a vendor s computerized order entry system.

An increase in the number of suitable suppliers

Page 8 of 11

71. The percentage of sales method, rather than the percentage of receivables method, would be used to estimate uncollectible accounts if an organization seeks to:

Use an aging schedule to more closely estimate uncollectible accounts.

Eliminate the need for an allowance for doubtful accounts.

Emphasize the accuracy of the net realizable value of the receivables on the balance sheet.

Use a method that approximates the matching principle.

72. Which of the following is a security feature that involves the use of hardware and software to fitter or prevent specific information from moving between the outside network and the outside network?

Authorization

Architecture model

Firewall

Virtual private network

73. Which of the following control techniques would minimize the risk of interception during transmission in an electronic data interchange system?

1) Encryption.

2) Traffic padding.

3) Edit checks.

4) Structured data format.

1 and 2 only

2 and 3 only

3 and 4 only

1, 2, and 3 only

74. Which of the following authentication controls combines what a user knows with the unique characteristics of the user respectively?

Voice recognition and token.

Password and fingerprint.

Fingerprint and voice recognition

Password and token

75. According to the ISO 14001 standard, which of the following is not included in the requirements for a quality management system?

Key processes across the entity which impact quality must be identified and included.

The quality management system must be documented in the articles of incorporation, quality manual, procedures, work instructions, and records.

Management must review the quality policy, analyze data about quality management system performance, and assess opportunities for improvement and the need for change.

The entity must have processes for inspections, testing, measurement, analysis, and improvement.

76. Which of the following statements is in accordance with COBIT?

1) Pervasive controls are general while detailed controls are specific.

2) Application controls are a subset of pervasive controls.

3) Implementation of software is a type of pervasive control.

4) Disaster recovery planning is a type of detailed control.

1 and 4 only

2 and 3 only

2, 3, and 4 only

1, 2, and 4 only

77. Which of the following is useful for forecasting the required level of inventory?

1) Statistical modeling.

2) Information about seasonal variations in demand.

3) Knowledge of the behavior of different business cycles.

4) Pricing models linked to seasonal demand.

1 and 2 only

2 and 3 only

1, 2, and 3 only

1, 2, 3, and 4

78. The activity that involves a trial run of a product in a typical segment of the market before proceeding to a national launch is referred to as:

Test marketing

Experimentation

Segmentation

Positioning

79. With regard to disaster recovery planning, which of the following would most likely involve stakeholders from several departments?

Determining the frequency with which backups will be performed.

Prioritizing the order in which business systems would be restored.

Assigning who in the IT department would be involved in the recovery procedures.

Assessing the resources needed to meet the data recovery objectives

80. An organization needs to borrow a large amount of cash to fund its expansion plan .

Which of the following annual interest rates is least expensive?

7 percent simple interest with a 10 percent compensating balance.

7 percent simple interest paid at the end of each year.

7 percent discount interest.

7 percent compounding interest.

Page 9 of 11

81. According to IIA guidance, which of the following steps are most important for an internal auditor to perform when evaluating an organization's social and environmental impact on the local community?

1) Determine whether previous incidents have been reported, managed, and resolved.

2) Determine whether a business contingency plan exists.

3) Determine the extent of transparency in reporting.

4) Determine whether a cost/benefit analysis was performed for all related projects.

1 and 3.

1 and 4.

2 and 3.

2 and 4.

82. Which of the following is the best approach to overcome entry barriers into a new business?

Offer a standard product that is targeted in the recognized market.

Invest in commodity or commodity-like product businesses.

Enter into a slow-growing market.

Use an established distribution relationship.

83. Which of the following is an element of effective negotiating?

Ensuring that the other party has a personal stake in the agreement.

Focusing on interests rather than on obtaining a winning position.

Considering a few select choices during the settlement phase.

Basing the agreement on negotiating power and positioning leverage.

84. In the current year, a merchandising organization had an inventory turnover ratio of 3.0, which was less than the industry average of 6.5 .

Which of the following offers the most likely explanation for this difference?

The organization has understated the amount of inventory in its financial statements

The organization has overstated the cost of purchases in its financial statements.

The organization is holding obsolete or damaged items in its inventory

The organization experienced an unexpectedly large increase in sales shortly before year end.

85. According to IIA guidance on IT auditing, which of the following would not be an area examined by the internal audit activity?

Access system security.

Policy development.

Change management.

Operations processes.

86. An organization's balance sheet indicates that the total asset amount and the total capital stock amount remained unchanged from one year to the next, and no dividends were declared or paid. However, the organization reported a loss of $200,000 .

Which of the following describes the most likely year-over-year change to the organization's total liabilities and total stockholder equity?

The total liabilities and total stockholder equity both increased.

The total liabilities and total stockholder equity both decreased.

The total liabilities decreased, and the total stockholder equity increased.

The total liabilities increased, and the total stockholder equity decreased.

87. When using cost-volume-profit analysts which of the following will increase operating income once the break-even point has been reached?

Fixed costs per unit for each additional unit sold

Variable costs per unit for each additional unit sold

Contribution margin per unit for each additional unit sold

Gross margin per unit for each additional unit sold

88. Which of the following describes the free trade zone in an e-commerce environment?

Zone that separates an organization's servers from outside forces.

Area in which messages are scrutinized to determine if they are authorized.

Area where communication and transactions occur between trusted parties.

Zone where data is encrypted, users are authenticated, and user traffic is filtered.

89. The greatest advantage of functional departmentalization is that it:

Facilitates communication between primary functions.

Helps to focus on the achievement of organizational goals.

Provides for efficient use of specialized knowledge.

Accommodates geographically dispersed companies

90. Which of the following financial instruments should be recorded at fair market value on the financial statements?

Accounts receivable in the short term

Bonds to be held to maturity.

Notes receivable in the short term

Bonds to be held for sale in the short term.

Page 10 of 11

91. Which of the following budgets serves as a basis for the budgeted income statement?

All financial budgets

All operating budgets

Only the cash budget and budgeted balance sheet

Only the sales and production budgets

92. An internal auditor is evaluating an organization's business continuity management program According to the guidance on IT.

Which of the following tests would best demonstrate the ability to perform Key processes without significant problems?

End-to-end testing

IT systems and application walkthrough

Tabletop or boardroom-style testing

Desk check testing

93. Which of the following is not a barrier to effective communication?

Filtering.

Communication overload.

Similar frames of reference.

Lack of source credibility.

94. Which of the following roles would be least appropriate for the internal audit activity to undertake with regard to an organization's corporate social responsibility (CSR) program?

Consult on project design and implementation of the CSR program.

Serve as an advisor on internal controls related to CS

Identify and prioritize the CSR issues that are important to the organization.

Evaluate the effectiveness of the organization's CSR efforts.

95. Refer to the exhibit.

If the profit margin of an organization decreases, and all else remains equal, which of the following describes how the "Funds Needed" line in the graph below will shift?

The "Funds Needed" line will remain pointed upward, but will become less steep.

The "Funds Needed" line will remain pointed upward, but will become more steep.

The "Funds Needed" line will point downward with a minimal slope.

The "Funds Needed" line will point downward with an extreme slope.

96. According to IIA guidance, which of the following statements is true regarding analytical procedures?

Data relationships are assumed to exist and to continue where no known conflicting conditions exist.

Analytical procedures are intended primarily to ensure the accuracy of the information being examined.

Data relationships cannot include comparisons between operational and statistical data

Analytical procedures can be used to identify unexpected differences but cannot be used to identify the absence of differences

97. New data privacy laws require an organization to use collected customer information for me sole purpose of meeting the organization's business requirements .

Which of the following best addresses the risk of the organization not complying with this objective?

Provide training on social engineering attacks

Encrypt the customer information retained by the organization

Establish policies that discipline those who misuse customer information

Allocate access profiles for each end user of the information

98. Which of me following statements is true regarding the reporting of tangible and intangible assets?

For plant assets cost includes the purchase price and the cost of design and construction

For intangible assets cost includes the purchase price and development costs

Due to their indefinite nature intangible assets are not subject to amortization

The organization must expense any cost incurred in developing a plant asset

99. Which of the following statements is true regarding the roles and responsibilities associated with a corporate social responsibility (CSR) program?

The board has overall responsibility for the internal control processes associated with the CSR program.

Management has overall responsibility for the effectiveness of governance, risk management, and internal control processes associated with the CSR program.

The internal audit activity is responsible for ensuring that CSR principles are integrated into the organization's policies and procedures.

Every employee has a responsibility for ensuring the success of the organization's CSR objectives.

100. How do data analysis technologies affect internal audit testing?

They improve the effectiveness of spot check testing techniques

They allow greater insight into high risk areas.

They reduce the overall scope of the audit engagement.

They increase the internal auditor's objectivity

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101. A bank uses customer departmentalization to categorize its departments .

Which of the following groups best exemplifies this method of categorization?

Community institutional and agricultural banking.

Mortgages credit cards and savings

South southwest and east.

Teller manager and IT specialist

102. Which of the following actions would senior management need to consider as pan of new IT guidelines regarding the organization's cybersecurity policies?

Assigning new roles and responsibilities for senior IT management.

Growing use of bring your own devices tor organizational matters

Expansion of operations into new markets with united IT access

Hiring new personnel within the IT department tor security purposes

103. An internal auditor is reviewing the organization's performance appraisal process .

Which of the following methods would be most effective to identify stereotyping?

Use a behaviorally anchored rating scale to Break down jobs into their components.

Analyze and compare the ratings for different classes or groupings of employees.

Compare the ratings of selective employees with their previous appraisals.

Analyze the number and percentages of employee appraisals that fall into each rating category

104. Which of the following budgets must be prepared first?

Cash budget.

Production budget.

Sales budget.

Selling and administrative expenses budget.

CIA Challenge IIA-CIA-Part3-3P Practice Exam Questions For Preparation

CIA Challenge IIA-CIA-Part3-3P Practice Exam Questions For Preparation

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