Easy To Download IIA IIA-CIA-Part3 Exam Dumps Updated 344 Questions
New Updated IIA-CIA-Part3 Exam Questions 2024
Passing the IIA-CIA-Part3 exam is a crucial step towards earning the prestigious CIA certification from the IIA. Business Knowledge for Internal Auditing certification is highly regarded in the field of internal auditing and is recognized globally. It demonstrates an individual's knowledge and expertise in internal auditing, which can lead to better job opportunities, higher salaries, and increased credibility with clients and employers.
IIA-CIA-Part3 or Business Knowledge for Internal Auditing is an important exam for individuals who wish to pursue a career in internal auditing. IIA-CIA-Part3 exam is designed to test the candidate's understanding and knowledge of business management principles, financial management, and risk management. It is also designed to evaluate the candidate's ability to apply these principles to the internal auditing process.
NEW QUESTION # 104
A client installed the most sophisticated controls using biometric attributes of employees to gain access to their computer system. This technology most likely replaced which of the following controls?
- A. Use of security specialists.
- B. Virus protection software.
- C. Reasonableness tests.
- D. Passwords.
Answer: D
Explanation:
The purpose of passwords is to prevent ac o s by unauthorized users just as the more sophistic-cited control of employee biometric attributes. The use of passwords is an effective control in an online system to prevent unauthorized access to computer systems. However, biometric technologies are more sophisticated and difficult to compromise.
NEW QUESTION # 105
A traditional quality control process in manufacturing consists of mass inspection of goods only at the end of a production process. A major deficiency of the traditional control process is that:
- A. It is expensive to do the inspections at the end of the process.
- B. It does not focus on improving the entire production process.
- C. It is not possible to rework defective items.
- D. It is not 100% effective.
Answer: B
Explanation:
The process used to produce the goods is not thoroughly reviewed and evaluated for efficiency and effectiveness. Preventing defects and increasing efficiency by improving the production process raises quality standards and decreases costs.
NEW QUESTION # 106
Before sending or receiving EDI messages, a company should:
- A. Demand that all its suppliers implement EDI capabilities.
- B. Evaluate the effectiveness of its use of EDI transmissions.
- C. Reduce inventory levels in anticipation of receiving shipments.
- D. Execute a trading partner agreement with each of its customers and suppliers.
Answer: D
Explanation:
Before sending or receiving EDI messages, a company should execute a trading partner agreement with its customers and suppliers. All parries should understand their responsibilities, the messages each will initiate, how they will interpret messages, the means of authenticating and verifying the completeness and accuracy of messages, the moment when the contract between the parries is effective, the [required level of security, etc.
NEW QUESTION # 107
A measure that describes the risk of an investment project relative to other investments in general is the:
- A. Coefficient of variation.
- B. Beta coefficient
- C. Expected return
- D. Standard deviation.
Answer: B
Explanation:
The required rate of return on equity capital in the Capital Asset Pricing Model is the risk-free rate, plus the product of the market risk premium times the beta coefficient. The market risk premium is the amount above the risk-free rate that will induce investment in the market The beta coefficient of an individual share is the correlation between the volatility price variation) of the stock market and that of the price of the individual share. For example. if an individual share goes up 15% and the market only 10%. beta is 1.5.
NEW QUESTION # 108
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.
- A. 1 and 4 only
- B. 2 and 3 only
- C. 1, 2, and 4 only
- D. 2, 3, and 4 only
Answer: A
NEW QUESTION # 109
Which of the following conditions could lead an organization to enter into a new business through internal development rather than through acquisition?
- A. The acquiring organization has information that the selling organization is weak.
- B. The condition of the economy is poor.
- C. The number of bidders to acquire the organization for sale is low.
- D. It is expected that there will be slow retaliation from incumbents.
Answer: D
NEW QUESTION # 110
Which of the following methods is most closely associated to year over year trends?
- A. Horizontal analysis
- B. Vertical analysis
- C. Common-size analysis
- D. Ratio analysis
Answer: A
NEW QUESTION # 111
Which of the following would be of greatest concern to an auditor reviewing a policy regarding the sale of a company's used personal computers to outside parties?
- A. Whether there is terminal emulation software on the computer.
- B. Whether deleted files on the hard disk drive have been completely erased.
- C. Whether the computer has viruses.
- D. Whether all software on the computer is properly licensed.
Answer: B
Explanation:
While most delete programs erase file pointers, they do not remove the underlying data. The company must use special utilities that fully erase the data. This is important because of the potential for confidential data on the microcomputers.
NEW QUESTION # 112
In a process-costing system, the cost of abnormal spoilage should be:
- A. Included in the cost of units transferred out.
- B. Treated as a loss in the period incurred.
- C. Prorated between units transferred out and ending inventory
- D. Ignored.
Answer: B
Explanation:
Abnormal spoilage is spoilage that is not expected to occur under normal, efficient operating conditions. Because of its unusual nature, abnormal spoilage is typically treated as a loss in the period in which it is incurred. Believing that its traditional cost system may be providing misleading information, an organization is considering an activity-based costing ABC) approach. It now employs a full cost system and has been applying its manufacturing overhead on the basis of machine hours. The organization plans on using
50.000 direct labor hours and 30.000 machine hours in the coming year. The following data show the manufacturing overhead that is budgeted.
Cost, sales, and production data for one of the organization' s products for the coming year are as follows:
NEW QUESTION # 113
An entity donated land to a municipal for a park. cost of the land was US $75,000, and the market value at the time of the donation was US $2, as determined by a professional
appraisal if the entity has not chosen to adopt the cost model for- n' r ant of property plant, and equipment subsequent to initial recognition, the journal entry to record the dial of the land is:
- A. Option D
- B. Option C
- C. Option A
- D. Option B
Answer: B
Explanation:
An item of PPE is carried at cost minus any accumulated depreciation and impairment losses. Under the allowed alternative treatment an item of PPE may be carried at a revalued amount equal to fair value at the revaluation date minus any subsequent accumulated depreciation and impairment losses_ Land is not depreciated, so it should be carried at its amount. This amount should be determined by a professional appraisal. The revaluation increased the carrying amount and is therefore credited directly to equity a situation surplus. Accordingly, the entry is to debit land and credit revaluation for US $125.000. The entire surplus may be transferred to retained Earnings but not through profit or loss) when the asset is derecognize Upon on the asset should be removed from the balance sheet.
NEW QUESTION # 114
Cost of goods sold in Year 2 was:
- A. US $147,000
- B. US $180,000
- C. US $167,000
- D. US $160,000
Answer: A
Explanation:
Cost of goods sold equals beginning inventory, plus purchases, minus ending inventory. To determine cost of goods purchases must be calculated. Purchases equal US $167,000$49,000 ending accounts payable + $ 130,000 payments to suppliers - $62,000 beginning accounts payable). Thus, cost of goods sold equals US $ 147,000$120,000 beginning inventory + $167,000 purchases - $140,000 ending inventory).
Balance sheets on December 31, Year 1, and December 31, Year 2, are presented below
NEW QUESTION # 115
One drawback of business process reengineenng (BPR), sometimes referred to as business process analysis, is:
- A. Reduction of operational efficiency.
- B. Excess of cost over the benefit.
- C. Improved efficiency in the business processes analyzed.
- D. Employee resistance to change.
Answer: D
Explanation:
Business process reengineering (BPR), or business process analysis, involves process innovation and process redesign. Instead of improving existing procedures, it finds new ways of doing things. One major drawback of BPR is that employees may be resistant due to fear of layoffs, being replaced, or insecurity about new required skills or tasks that the employee now has to perform.
NEW QUESTION # 116
Your company (Company Y) has decided to enter the European market with one of its products and is now considering three advertising strategies. This market currently belongs to Company X. Company X is aware that your company is entering the market and is itself considering steps to protect its market. An analyst for your company has identified three strategies Company X might develop and has shown the payoffs for each in the tables below.
The analyst has formulated this problem as a:
- A. Game against nature.
- B. Cooperative game.
- C. Prisoner's dilemma.
- D. Zero-sum game.
Answer: D
Explanation:
Game theory is a mathematical approach to decision making when confronted with an enemy or competitor. Games are classified according to the number of players and the algebraic sum of the payoffs. In a two-player game, if the payoff is given by the loser to the winner, the algebraic sum is zero, and the game is a zero-sum game; if it is possible for both players to profit, the game is a positive-sum game. In this situation, the sum of the payoffs for each combination of strategies is zero. For example, if X takes no action and Y chooses limited advertising, X's payoff is -1 and Ys is 1.
NEW QUESTION # 117
An appropriate technique for planning and controlling manufacturing inventories, such as raw materials, components, and subassemblies whose demand depends on the level of production is:
- A. Linear programming.
- B. Capital budgeting.
- C. Materials requirements planning.
- D. Regression analysis.
Answer: C
Explanation:
Materials requirements planning MRP) is a system that translates a production schedule into requirements for each component needed to meet the schedule. It is usually implemented in the form of a computer-based information system designed to plan and control raw materials used in production. It assumes that forecasted demand is reasonably accurate and that suppliers can deliver based upon this accurate schedule. MRP is a centralized push-through system, output based on forecasted demand is pushed through to the next department or to inventory.
NEW QUESTION # 118
The economic order quantity is the size of the order that minimizes total inventory costs which include ordering and holding (carrying) costs. It can be calculated using the formula:
If:
Q = order size in units
D = annual demand in units
P = cost per purchase order
S = carrying cost per year for one unit of inventory
If the annual demand decreases by 36% the optimal order size will
- A. Decrease by 6%.
- B. Increase by 6%.
- C. Decrease by 20%.
- D. Increase by 20%.
Answer: C
Explanation:
D decreases by 36%, that is, from 100% to 64%. Because .64 is the square of .8, the EOQ for .64D (Q1) equals 80% of the EOQ for D(Q).
NEW QUESTION # 119
Which of the following controls would be most efficient to protect business data from corruption and errors?
- A. Controls to quickly identify malicious intrusion attempts.
- B. Controls to encrypt the data so that corruption is likely ineffective.
- C. Controls to ensure data is unable to be accessed without authorization.
- D. Controls to calculate batch totals to identify an error before approval.
Answer: D
NEW QUESTION # 120
All of the following are potential security issues for e-commerce except:
- A. Determining who may rightfully make transaction decisions.
- B. Correct identification of transacting parties.
- C. Verification of payment data.
- D. Proliferation of computer viruses.
Answer: D
Explanation:
E-commerce is the purchase and sale of goods and services by electronic means. Ecommerce may occur via online transactions on public networks electronic data interchange EDI), and email. E- commerce security issues include the correct identification of transacting parties authentication), determining who may rightfully make decisions authorization), and verification of payment data. While proliferation of computer viruses is a general security issue with regard to information systems, it is not a specific risk associated with e- commerce.
NEW QUESTION # 121
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?
- A. Obtain the data
- B. Identify the risks.
- C. Normalize the data,
Answer: B
Explanation:
Analyze the data.
NEW QUESTION # 122
Which of the following is true regarding the use of remote wipe for smart devices?
- A. It can restore default settings and lock encrypted data when necessary.
- B. It enables the erasure and reformatting of secure digital (SD) cards.
- C. It can delete data backed up to a desktop for complete protection if required.
- D. It can wipe data that is backed up via cloud computing
Answer: B
NEW QUESTION # 123
Which of the following statements is true for a defined contribution post employment benefit plan?
- A. Post employment benefits received by employees are defined by the plan's formula
- B. The employer bears the risk of the plan's investment performance.
- C. The employer and employees are required to contribute equal amounts to the fund.
- D. The employer is required to contribute a certain amount each period based on the plan's formula.
Answer: D
Explanation:
A defined contribution plan provides benefits in exchange for services, provides an account for each participant, and specifies how contributions are to be determined. Post employment benefits depend only on contributions, returns on investment, and allocated forfeitures of other participants' benefits. Thus, employees have the benefit of gain and the risk of loss.
NEW QUESTION # 124
A mail-order retailer of low-cost novelty items is receiving an increasing number of
complaints from customers about the wrong merchandise being shipped. The order code for items has the format The major category is ww, xx is the minor category, yy identifies the item, and zz identifies the catalog. In many cases, the wrong merchandise was sent because adjacent characters in the order code had been transposed. The best control for decreasing the number of orders with the wrong merchandise is to:
- A. Separate the parts of the order code with hyphens to make the characters easier to read.
- B. Add check-digits to the order codes and verify them for each order.
- C. Use a master file reference for all order codes to verify the existence of items.
- D. Require customers to specify the name for each item they order.
Answer: B
Explanation:
Self-checking digits may be used to detect incorrect codes. The digit is generated by applying an algorithm to the code. During the input process, the check digit is recomputed by applying the same algorithm to the code actually entered.
NEW QUESTION # 125
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