IIA-CIA-Part3 Real Exam Questions Online – 100% Passing

1. Which of the following statements is correct regarding risk analysis?

2. Which of the following statements regarding organizational governance is not correct?

3. Which of the following is a role of the board of directors in the governance process?

4. Which is the least effective form of risk management?

5. An audit of an organization’s compensation system should be performed independently of an audit of the control system over other functions that impact corporate bonuses.

6. The first stage in the development of a crisis management program is to:

7. When developing an effective risk-based plan to determine audit priorities, an internal audit activity should start by:

8. The decision to implement enhanced failure detection and back-up systems to improve data integrity is an example of which risk response?

9. Which of the following activities most significantly increases the risk that a bank will make poor-quality loans to its customers?

10. The main reason to establish internal controls in an organization is to:

11. During a review of a web-based application used by customers to check the status of their bank accounts, it would be most important for the internal auditor to ensure that:

12. Identify and prioritize the resources required to support critical business processes.

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

14. Structured data format.

15. For an engineering department with a total quality management program, important elements of quality management include all of the following except:

16. Refer to the exhibit.

The figure below shows the network diagram for the activities of a large project.

What is the shortest number of days in which the project can be completed?

17. Which of the following is a characteristic of just-in-time inventory management systems?

18. The economic order quantity for inventory is higher for an organization that has:

19. Sales trends.

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

21. Preferred stock is less risky for investors than is common stock because:

22. Which of the following borrowing options is an unsecured loan?

23. 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?

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

25. Which of the following performance measures would be appropriate for evaluating an investment center, which has responsibility for its revenues, costs, and investment base, but would not be appropriate for evaluating cost, revenue, or profit centers?

26. A capital investment project will have a higher net present value, everything else being equal, if it has:

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

28. An organization is projecting sales of 100,000 units, at a unit price of $12. Unit variable costs are $7.

If fixed costs are $350,000, what is the projected total contribution margin?

29. When applied to international economics, the theory of comparative advantage proposes that total worldwide output will be greatest when:

30. A brand manager in a consumer food products organization suspected that several days of the point-of­sale data on the spreadsheet from one grocery chain were missing.

The best approach for detecting missing rows in spreadsheet data would be to:

31. An organization uses a database management system (DBMS) as a repository for data. The DBMS, in turn, supports a number of end-user developed applications which were created using fourth-generation programming languages. Some of the applications update the database.

Which of the following is the most important control related to the integrity of the data in the database?

32. Which of the following is not a method for implementing a new application system?

33. One change control function that is required in client/server environments, but is not required in mainframe environments, is to ensure that:

34. A key advantage of developing a computer application by using the prototyping approach is that it:

35. Which of the following is a disadvantage of selecting a commercial software package rather than developing an application internally?

36. A software that translates hypertext markup language (HTML) documents and allows a user to view a remote web page is called:

37. The first step in determining product price is:

38. 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:

39. Which of the following best describes the concept of relevant cost?

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

41. Which of the following statements is true regarding the use of public key encryption to secure data while it is being transmitted across a network?

42. The market price is the most appropriate transfer price to be charged by one department to another in the same organization for a service provided when:

43. Which of the following is a type of network in which an organization permits specific users (such as existing customers) to have access to its internal network through the Internet by building a virtual private network?

44. During the last year, an organization had an opening inventory of $300,000, purchases of $980,000, sales of $1,850,000, and a gross margin of 40 percent.

What is the closing inventory if the periodic inventory system is used?

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

46. An organization produces two products, X and Y. The materials used for the production of both products are limited to 500 kilograms (kg) per month. All other resources are unlimited and their costs are fixed.

Individual product details are as follows:

Product X

Product Y

Selling price per unit

$10

$13

Materials per unit (at $1/kg)

2 kg

6 kg

Monthly demand

100 units

120 units

In order to maximize profit, how much of product Y should the organization produce each month?

47. Pricing models linked to seasonal demand.

48. Which of the following standards would be most useful in evaluating the performance of a customer-service group?

49. A small furniture-manufacturing firm with 100 employees is located in a two-story building and does not plan to expand. The furniture manufactured is not special-ordered or custom-made.

The most likely structure for this organization would be:

50. When writing a business memorandum, the writer should choose a writing style that achieves all of the following except:

51. Listening effectiveness is best increased by:

52. An organization had three large centralized divisions: one that received customer orders for service work; one that scheduled the service work at customer locations; and one that answered customer calls about service problems. These three divisions were restructured into seven regional groups, each of which performed all three functions.

One advantage of this restructuring would be:

53. Multinational organizations generally spend more time and effort to identify and evaluate:

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

55. Ability to empathize with other people.

56. Which of the following is the best reason for considering the acquisition of a nondomestic organization?

57. When initiating international ventures, an organization should consider cultural dimensions in order to prevent misunderstandings.

Which of the following does not represent a recognized cultural dimension in a work environment?

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

59. Cost focus.

60. International marketing activities often begin with:

61. A supervisor receives a complaint from an employee who is frustrated about having to learn a new software program. The supervisor responds that the new software will enable the employee to work more efficiently and with greater accuracy.

This response is an example of:

62. The cost to enter a foreign market would be highest in which of the following methods of global expansion?

63. Which of the following is a characteristic of an emerging industry?

64. Which of the following distinguishes the added-value negotiation method from traditional negotiating methods?

65. It can lead to cultural myopia.

66. If a bank’s activities are categorized under such departments as community banking, institutional banking, and agricultural banking, what kind of departmentalization is being utilized?

67. Which of the following conflict resolution methods should be applied when the intention of the parties is to solve the problem by clarifying differences and attaining everyone’s objectives?

68. Which of the following factors would reduce dissatisfaction for a management trainee but would not particularly motivate the trainee?

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

70. Organizational structure.

71. An organization engages in questionable financial reporting practices due to pressure to meet unrealistic performance targets.

Which internal control component is most negatively affected?

72. Which mindset promotes the most comprehensive risk management strategy?

73. An internal auditor is reviewing physical and environmental controls for an IT organization.

Which control activity should not be part of this review?

74. According to the International Professional Practices Framework, internal auditors who are assessing the adequacy of organizational risk management processes should not:

75. Which audit approach should be employed to test the accuracy of information housed in a database on an un-networked computer?

76. The IAA may accept requests from management to perform advisory services regarding how the IT governance of the organization supports the organization’s strategies and objectives.

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

78. An organization decided to install a motion detection system in its warehouse to protect against after-hours theft.

According to the COSO enterprise risk management framework, which of the following best describes this risk management strategy?

79. 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?

80. Organizations use matrix management to accomplish which of the following?