IIA-CIA-Part3-3P by IIA Actual Free Exam Questions And Answers

Question 1

A retail organization mistakenly did not include S10.000 of inventory in the physical count at the end of the year. What was the impact to the organization's financial statements?

A. Cost of sales is overstated and net income is understated.

B. Cost of sales is understated and net income is overstated.

C. Cost of sales and net income are understated

D. Cost of sales and net income are overstated

Discussion 0

Correct Answer: B Vote an answer

Question 2

Under a value-added taxing system:

A. The consumer ultimately bears the cost of the tax through higher prices.

B. Consumer savings are discouraged.

C. Businesses must pay a tax only if they make a profit.

D. The amount of value added is the difference between an organization's sales and its cost of goods sold.

Discussion 0

Correct Answer: A Vote an answer

Question 3

An organization is considering the outsourcing of its business processes related to payroll and information technology functions. Which of the following is the most significant area of concern for management regarding this proposed agreement?

A. Ensuring that there are means of monitoring the efficiency of the outsourced process.

B. Ensuring that there are means of monitoring the effectiveness of the outsourced process.

C. Ensuring that the vendor has complete management control of the outsourced process.

D. Ensuring that payments to the vendor are appropriate and timely for the services delivered.

Discussion 0

Correct Answer: B Vote an answer

Question 4

An organization engages in questionable financial reporting practices due to pressure to meet unrealistic performance targets. Which internal control component is most negatively affected?

A. Control activities.

B. Control environment.

C. Risk assessment.

D. Monitoring.

Discussion 0

Correct Answer: B Vote an answer

Question 5

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

A. A sense of achievement.

B. An incremental increase in salary.

C. Recognition.

D. Promotion.

Discussion 0

Correct Answer: B Vote an answer

Question 6

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

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

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

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

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

Discussion 0

Correct Answer: B Vote an answer

Question 7

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. An increase in the cost of capital.

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

C. A higher cost per unit sold.

D. A longer average collection period.

Discussion 0

Correct Answer: B Vote an answer

Question 8

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

A. Filtering.

B. Communication overload.

C. Similar frames of reference.

D. Lack of source credibility.

Discussion 0

Correct Answer: C Vote an answer

Question 9

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?

A. Provide training on social engineering attacks

B. Allocate access profiles for each end user of the information

C. Encrypt the customer information retained by the organization

D. Establish policies that discipline those who misuse customer information

Discussion 0

Correct Answer: C Vote an answer

Question 10

An internal auditor is reviewing the organization's performance appraisal process. Which of the following methods would be most effective to identify stereotyping?

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

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

C. Compare the ratings of selective employees with their previous appraisals.

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

Discussion 0

Correct Answer: C Vote an answer

Question 11

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?

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

B. The organization is holding obsolete or damaged items in its inventory

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

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

Discussion 0

Correct Answer: B Vote an answer

Question 12

Which of the following is true of bond financing, compared to common stock, when all other variables are equal?

A. Lower shareholder control.

B. Higher company earnings per share.

C. Lower indebtedness.

D. Higher overall company earnings.

Discussion 0

Correct Answer: A Vote an answer

IIA CIA Exam Part Three: Business Knowledge for Internal Auditing - IIA-CIA-Part3-3P Exam Practice Test

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