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IIA-CIA-Part3-3P CIA Exam Part Three: Business Knowledge for Internal Auditing exam dumps questions are the best material for you to test all the related IIA exam topics. By using the IIA-CIA-Part3-3P exam dumps questions and practicing your skills, you can increase your confidence and chances of passing the IIA-CIA-Part3-3P exam. Features of Dumpsinfo’s products Instant Download Free Update in 3 Months Money back guarantee PDF and Software 24/7 Customer Support Besides, Dumpsinfo also provides unlimited access. You can get all Dumpsinfo files at lowest price. CIA Exam Part Three: Business Knowledge for Internal Auditing IIA-CIA- Part3-3P exam free dumps questions are available below for you to study. Full version: IIA-CIA-Part3-3P Exam Dumps Questions 1. 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. 2, 3, and 4 only D. 1, 2, and 4 only Answer: A 1 / 16 https://www.dumpsinfo.com/unlimited-access/ https://www.dumpsinfo.com/exam/iia-cia-part3-3p 2. 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. A. 1 and 3. B. 1 and 4. C. 2 and 3. D. 2 and 4. Answer: A 3. Which of the following best describes the primary objective of cybersecurity? A. To protect the effective performance of IT general and application controls. B. To regulate users' behavior in the web and cloud environment. C. To prevent unauthorized access to information assets. D. To secure application of protocols and authorization routines. Answer: B 4. Which stage of group development is characterized by a decrease in conflict and hostility among group members and an increase in cohesiveness? A. Forming stage. B. Norming stage. C. Performing stage. D. Storming stage. Answer: B 5. Which of the following strategies is most appropriate for an industry that is in decline? A. Invest in marketing. B. Invest in research and development. C. Control costs. D. Shift toward mass production. Answer: C 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? A. Standards used for evaluation and control are determined at local subsidiaries, not set by headquarters. B. Orders, commands and advice are sent to the subsidiaries from headquarters. C. People of local nationality are developed for the best positions within their own country D. There is a significant amount of collaboration between headquarters and subsidiaries. Answer: B 7. According to the Standards, which of the following is based on the assertion that the quality of an organization's risk management process should improve with time? A. Process element. 2 / 16 https://www.dumpsinfo.com/ B. Key principles. C. Maturity model. D. Assurance. Answer: C 8. If a just-in-time purchasing system is successful in reducing the total inventory costs of a manufacturing company, which of the following combinations of cost changes would be most likely to occur? A. 1 B. 2 C. 3 D. 4 Answer: D 9. Which of the following are the most appropriate measures for evaluating the change in an organization's liquidity position? A. Times interest earned, return on assets, and inventory turnover. B. Accounts receivable turnover, inventory turnover in days, and the current ratio. C. Accounts receivable turnover, return on assets, and the current ratio. D. Inventory turnover in days, the current ratio, and return on equity. Answer: B 10. Which of the following authentication controls combines what a user knows with the unique characteristics of the user respectively? A. Voice recognition and token. B. Password and fingerprint. C. Fingerprint and voice recognition D. Password and token Answer: B 11. 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. A. 1 and 2 only B. 2 and 3 only C. 3 and 4 only D. 1, 2, and 3 only Answer: A 12. Which of the following controls is designed to mitigate a physical IT risk? A. An automated fire prevention system. B. Access control restrictions in a system. C. Anti-malware protection software. D. A network isolating firewall system. 3 / 16 https://www.dumpsinfo.com/ Answer: B Explanation: Reference: https://blog.usecure.io/physical-security-risks 13. Which of the following data analytics tools would be applied by an internal audit activity positioned at the lowest level of maturity? A. Workflow and data capture technology B. Data visualization applications. C. Software integrated with central data warehouse D. Spreadsheets. Answer: D 14. According to IIA guidance, which of the following statements is true regarding analytical procedures? A. Data relationships are assumed to exist and to continue where no known conflicting conditions exist. B. Analytical procedures are intended primarily to ensure the accuracy of the information being examined. C. Data relationships cannot include comparisons between operational and statistical data D. Analytical procedures can be used to identify unexpected differences but cannot be used to identify the absence of differences Answer: A 15. In mergers and acquisitions, which of the following is an example of a horizontal combination? A. Dairy manufacturing company taking over a large dairy farm. B. A movie producer acquires movie theaters. C. A petroleum processing company acquires an agro-processing firm. D. A baker taking over a competitor. Answer: D 16. Which of the following would most likely be found in an organization that uses a decentralized organizational structured? A. There is a higher reliance on organizational culture B. There are clear expectations set for employees C. There are electronic monitoring techniques employed D. There is a defined code for employee behavior Answer: B 17. Import quotas that limit the quantities of goods that a domestic subsidiary can buy from its foreign parent company represent which type of barrier to the parent company? A. Political. B. Financial. C. Social. D. Tariff. Answer: A 4 / 16 https://www.dumpsinfo.com/ 18. Which of the following is likely to occur when an organization decides to adopt a decentralized organizational structure? A. A slower response to external change. B. Less controlled decision making. C. More burden on higher-level managers. D. Less use of employees' true skills and abilities. Answer: B Explanation: Reference: https://opentextbc.ca/principlesofaccountingv2openstax/chapter/differentiate-between- centralized-and-decentralized-management/ 19. In an organization's established accounts payable department employees perform highly structured activities follow clearly defined procedures and have strict deadlines for performing their tasks. The head of the department recently retired, and a new department head was hired. To achieve the greatest benefit for this department and avoid redundancy the new leader should adopt which of the following leadership styles? A. Achievement-oriented style B. People-oriented style C. Goal-oriented style D. Task-oriented style Answer: C 20. According to MA guidance, which of thefollowing 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 A. 1 and 3 B. 1 and 4 C. 2 and 3 D. 2 and 4 Answer: B 21. Which of the following is not a common feature of cumulative preferred stock? A. Priority over common stock with regard to dilution of shares. B. Priority over common stock with regard to earnings. C. Priority over common stock with regard to dividend payment. D. Priority over common stock with regard to assets. Answer: A 22. According to IIA guidance on IT. which of the following plans would pair the identification of critical business processes with recovery time objectives? A. The business continuity management charter. B. The business continuity risk assessment plan C. The business impact analysis plan D. The business case for business continuity planning Answer: C 5 / 16 https://www.dumpsinfo.com/ 23. Much of the following authentication device credentials is the most difficult to revoke when an employee's access rights need to be removed? A. A traditional key lock B. A biometric device. C. A card-key system D. A proximity device Answer: B 24. According to the COSO enterprise risk management (ERM) framework, which of the following is not a typical responsibility of the chief risk officer? A. Establishing risk category definitions and a common risk language for likelihood and impact measures. B. Defining ERM roles and responsibilities. C. Providing the board with an independent, objective risk perspective on financial reporting. D. Guiding integration of ERM with other management activities. Answer: C 25. Which component of an organization's cybersecurity risk assessment framework would allow management to implement user controls based on a user's role? A. Prompt response and remediation policy. B. Inventory of information assets. C. Information access management. D. Standard security configurations. Answer: C Explanation: Reference: https://www.techtarget.com/searchsecurity/definition/identity-access-management-IAM- system 26. A brand manager in a consumer food products organization suspected that several days of the point-of-sale data on the spreadsheet from one grocery chain were missing. The best approach for detecting missing rows in spreadsheet data would be to: A. Sort on product identification code and identify missing product identification codes. B. Review store identification code and identify missing product identification codes. C. Compare product identification codes for consecutive periods. D. Compare product identification codes by store for consecutive periods. Answer: D 27. Which of the following actions would senior management need to consider as pan of new IT guidelines regarding the organization's cybersecurity policies? A. Assigning new roles and responsibilities for senior IT management. B. Growing use of bring your own devices tor organizational matters C. Expansion of operations into new markets with united IT access D. Hiring new personnel within the IT department tor security purposes Answer: D 6 / 16 https://www.dumpsinfo.com/ 28. Which of the following application controls can be defined as controls that monitor data Being processed and in storage to ensure it remains consistent and correct? A. Input controls B. Output controls C. Integrity controls D. Processing controls Answer: C 29. 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? A. 50 units. B. 60 units. C. 100 units. D. 120 units. Answer: A 30. 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 payments to the vendor are appropriate and timely for the services delivered. B. Ensuring that the vendor has complete management control of the outsourced process. C. Ensuring that there are means of monitoring the efficiency of the outsourced process. D. Ensuring that there are means of monitoring the effectiveness of the outsourced process. Answer: D 31. Which of the following steps should an internal auditor take during an audit of an organization's business continuity plans? 1) Evaluate the business continuity plans for adequacy and currency. 2) Prepare a business impact analysis regarding the loss of critical business. 3) Identify key personnel who will be required to implement the plans. 4) Identify and prioritize the resources required to support critical business processes. A. 1 only B. 2 and 4 only C. 1, 3, and 4 only D. 1, 2, 3, and 4 7 / 16 https://www.dumpsinfo.com/ Answer: A 32. 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? A. Documentation of each system and its interactions, interfaces, and dependencies with other systems and databases is not gathered and maintained. B. Batch processing jobs include key financial data that is not posted to the accounting system until the next day. preventing real-time queries. C. The job scheduling tool frequently malfunctions, causing scheduled jobs not to run. An error message is sent to IT personnel when a job fails. D. The implementation of a major update for a key application is delayed until any potential interdependencies are identified and analyzed. Answer: A 33. Which of the following is a characteristic of using a hierarchical control structure? A. Less use of policies and procedures B. Less organizational commitment by employees C. Less emphasis on extrinsic rewards D. Less employees turnover Answer: B 34. Which of the following is always true regarding the use of encryption algorithms based on public key infrastructure (PKI)? A. PKI uses an independent administrator to manage the public key. B. The public key is authenticated against reliable third-party identification. C. PKI's public accessibility allows it to be used readily for e-commerce. D. The private key uniquely authenticates each party to a transaction. Answer: D 35. An employee's mobile device used for work was stolen in a home burglary. Which control, if already implemented by the organization, would best prevent unauthorized access to organizational data stored on the employee's device? A. Access control via biometric authentication. B. Access control via passcode authentication. C. Access control via swipe pattern authentication. D. Access control via security question authentication. Answer: A 36. In creating a risk-based plan, which of the following best describes a top-down approach to understanding business processes? A. Identifying the processes at the activity level. B. Analyzing the organization's strategic plan where the business processes are defined. C. Analyzing the organization's objectives and identifying the processes needed to achieve the objectives. 8 / 16 https://www.dumpsinfo.com/ D. Identifying the risks affecting the organization, the objectives, and then the processes concerned. Answer: C 37. Which of the following is an example of a physicalcontrol? A. Providing fire detection and suppression equipment B. Establishing a physical security policy and promoting it throughout the organization C. Performing business continuity and disaster recovery planning D. Keeping an offsite backup of the organization's critical data Answer: A 38. Which of the following statements regarding program change management is not correct? A. The goal of the change management process is to sustain and improve organizational operations. B. The degree of risk associated with a proposed change determines if the change request requires authorization. C. In order to protect the production environment, changes must be managed in a repeatable, defined, and predictable manner. D. All changes should be tested in a non-production environment before migrating to the production environment. Answer: B 39. Which of the following describes the most appropriate set of tests for auditing a workstation's logical access controls? A. Review the list of people with access badges to the room containing the workstation and a log of those who accessed the room. B. Review the password length, frequency of change, and list of users for the workstation's login process. C. Review the list of people who attempted to access the workstation and failed, as well as error messages. D. Review the passwords of those who attempted unsuccessfully to access the workstation and the log of their activity. Answer: B 40. Which of the following is a typical example of structured data? A. Production information maintained in relational tables. B. Tweets and posts of users on social media. C. Photos and videos stored in hard drive catalogs. D. Sales reports documented in word processing software. Answer: A 41. Which of the following budgets must be prepared first? A. Cash budget. B. Production budget. C. Sales budget. D. Selling and administrative expenses budget. Answer: C 9 / 16 https://www.dumpsinfo.com/ 42. Which of the following techniques would be least effective in resolving the conflict created by an internal audit client's perception of the audit report as a personal attack on his management performance? A. The auditor should focus on the audit client as a person and understand him, rather than just concentrating on the problem. B. The auditor should make recommendations based on objective criteria, rather than based on a subjective assessment. C. The auditor should explore alternative solutions to address the audit problem, so the audit client has options. D. The auditor should take a flexible position on the recommendations and focus on resolving the issue by addressing the interests of the people concerned. Answer: A 43. When applied to international economics, the theory of comparative advantage proposes that total worldwide output will be greatest when: A. Each nation's total imports approximately equal its total exports. B. Each good is produced by the nation that has the lowest opportunity cost for that good. C. Goods that contribute to a nation's balance-of-payments deficit are no longer imported. D. International trade is unrestricted and tariffs are not imposed. Answer: B 44. An internal auditor reviewed Finance Department records to obtain a list of current vendor addresses. The auditor then compared the vendor addresses to a record of employee addresses maintained by the Payroll Department Which of the following types of data analysis did the auditor perform? A. Duplicate testing. B. Joining data sources C. Gap analysis D. Classification Answer: A 45. An internal auditor was asked to review an equal equity partnership In one sampled transaction Partner A transferred equipment into the partnership with a self-declared value of $10,000 and Partner B contributed equipment with a self-declared value of $15 000 The capital accounts of each partner were subsequently credited with S12,500 . Which of the following statements is true regarding this transaction? A. The capital accounts of the partners should be increased by the original cost of the contributed equipment. B. The capital accounts should be increased using a weighted average based on the current percentage of ownership C. No action is needed as the capital account of each partner was increased by the correct amount D. The capital accounts of the partners should be increased by the fair market value of their contribution Answer: C 46. Which of following best demonstrates the application of the cost principle? A. A company reports trading and investment securities at their market cost. B. A building purchased last year for $1 million is currently worth $1.2 million, but the company still 10 / 16 https://www.dumpsinfo.com/ reports the building at $1 million. C. A building purchased last year for $1 million is currently worth $1.2 million, and the company adjusts the records to reflect the current value. D. A company reports assets at either historical or fair value, depending which is closer to market value. Answer: D Explanation: Reference: https://www.smartcapitalmind.com/what-are-the-applications-of-cost-principle.htm 47. An organization accumulated the following data for the prior fiscal year: Value of Percentage of Quarter Output Produced Cost X 1 $4,750,000 48. 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: A. Better internal controls. B. Greater economies of scale. C. Improved work flow. D. Increased specialization. Answer: C Topic 2, Exam Pool B 49. An internal audit activity is piloting a data analytics model, which aims to identify anomalies in payments to vendors and potential fraud indicators Which of the following would be the most appropriate criteria for assessing the success of the piloted model? A. The percentage of cases flagged by the model and confirmed as positives. B. The development and maintenance costs associated with the model C. The feedback of auditors involved with developing the model D. The number of criminal investigations initiated based on the outcomes of the model Answer: A 50. In reviewing an organization's IT infrastructure risks, which of the following controls is to be tested as part of reviewing workstations? A. Input controls. B. Segregation of duties. C. Physical controls. D. Integrity controls. Answer: D 51. Which of the following is a systems software control? 11 / 16 https://www.dumpsinfo.com/ A. Restricting server room access to specific individuals B. Housing servers with sensitive software away from environmental hazards. C. Ensuring that ail user requirements are documented. D. Performing of intrusion testing on a regular basis Answer: A 52. An organization's board of directors is particularly focused on positioning the organization as a leader in the industry and beating the competition. Which of the following strategies offers the greatest alignment with the board's focus? A. Divesting product lines expected to have negative profitability. B. Increasing the diversity of strategic business units. C. Increasing investment in research and development for a new product. D. Relocating the organization's manufacturing to another country. Answer: B 53. Which of the following recognized competitive strategies focuses on gaining efficiencies? A. Focus B. Cost leadership C. Innovation D. Differentiation Answer: B 54. An internal auditor has been approved lo gather data directly horn the organization's relational database management system tor data analyses To collect the data which of the Wowing is most important for the auditor to know? A. Structured query language B. Spreadsheet software such as Excel C. Data management system such as Oracle D.Basic web development Answer: A 55. Which of the following is a characteristic of just-in-time inventory management systems? A. Users determine the optimal level of safety stocks. B. They are applicable only to large organizations. C. They do not really increase overall economic efficiency because they merely shift inventory levels further up the supply chain. D. They rely heavily on high quality materials. Answer: D 56. Which of the following should be included m a company's year-end inventory valuation? A. Company goods that were sold during the year free on board shipping point that have been shipped but not yet received by the customer B. Goods purchased by the company free on board destination mat have not yet been received C. Goods on consignment, which the company is trying to sell for its customers D. Company goods tor sale on consignment at a consignment shop Answer: A 12 / 16 https://www.dumpsinfo.com/ 57. Which of the following techniques is the most relevant when an internal auditor conducts a valuation of an organization's physical assets? A. Observation. B. Inspection. C. Original cost. D. Vouching. Answer: B 58. 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. A tougher collections policy that reduces the bad debt loss ratio. B. A higher cost per unit sold. C. A longer average collection period. D. An increase in the cost of capital. Answer: A 59. A global business organization is selecting managers to post to various international (expatriate) assignments. In the screening process, which of the following traits would be required to make a manager a successful expatriate? 1) Superior technical competence. 2) Willingness to attempt to communicate in a foreign language. 3) Ability to empathize with other people. A. 1 and 2 only B. 1 and 3 only C. 2 and 3 only D. 1, 2, and 3 Answer: C 60. Which of the following is an example of a key systems development control typically found in the in-house development of an application system? A. Logical access controls monitor application usage and generate audit trails. B. The development process is designed to prevent, detect and correct errors that may occur C. A record is maintained to track the process of data from input, to output, to storage D. Business users' requirements are documented, and their achievement is monitored Answer: D 61. Which of the following statements is correct regarding corporate compensation systems and related bonuses? 1) A bonus system should be considered part of the control environment of an organization and should be considered in formulating a report on internal control. 2) Compensation systems are not part of an organization's control system and should not be reported as such. 3) 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. A. 1 only 13 / 16 https://www.dumpsinfo.com/ B. 2 only C. 3 only D. 2 and 3 only Answer: A 62. 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? A. Monte Carlo Analysis B. Project Management Information System (PMIS) C. Earned Value Management (EVM). D. Integrated Project Plan A Answer: E 63. Which of the following best demonstrates an organization's ability to recover from a disaster? A. Hot site B. Cold site C. Redundant data center D. Regular testing of the disaster plan Answer: A 64. An organization is experiencing a high turnover . Which of the following can human resources deploy to effectively detect the root cause of turnover? A. Require regular performance appraisals B. Perform exit interviews C. Encourage periodic rotation of employee duties. D. Ensure mandatory vacations Answer: B 65. Which of the following IT controls includes protection for mainframe computers and workstations? A. Change management controls B. Physical and environmental controls. C. System software controls D. Organization and management controls Answer: B 66. Which of the following application-based controls is an example of a programmed edit check? A. Reasonableness check. B. Transaction log. C. Input error correction. D. Authorization for access. Answer: A 67. Multinational organizations generally spend more time and effort to identify and evaluate: A. Internal strengths and weaknesses. B. Break-even points. 14 / 16 https://www.dumpsinfo.com/ C. External trends and events. D. Internal risk factors. Answer: C 68. A restaurant deeded to expand its business to include delivery services rather than relying on third-party food delivery services . Which of the following best describes the restaurant's strategy? A. Diversification B. Vertical integration C. Risk avoidance D. Differentiation Answer: B 69. Which of the following is the best example of IT governance controls? A. Controls that focus on segregation of duties, financial and change management B. Personnel policies that define and enforce conditions for staff in sensitive IT areas C. Standards that support IT policies by more specifically defining required actions D. Controls that focus on data structures and the minimum level of documentation required Answer: C 70. They rely heavily on objective assessments and related risk tolerances. 71. Senior management has decided to implement the Three Lines of Defense model for risk management . Which of the following best describes senior management's duties with regard to this model? A. Ensure compliance with the model. B. Identify management functions. C. Identify emerging issues. D. Set goals for implementation. Answer: A 72. Which of the following factors is most responsible for the increasing risk that unauthorized parties may obtain or tamper with personal data? A. The lack of legal and industry frameworks on privacy. B. The absence of generally accepted privacy principles. C. The rapid growth and evolution of technology. D. The legislated need to retain sensitive personal information. Answer: C 73. An organization had a gross profit margin of 40 percent in year one and in year two. The net profit margin was 18 percent in year one and 13 percent in year two. Which of the following could be the reason for the decline in the net profit margin for year two? A. Cost of sales increased relative to sales. B. Total sales increased relative to expenses. 15 / 16 https://www.dumpsinfo.com/ C. The organization had a higher dividend payout rate in year two. D. The government increased the corporate tax rate. Answer: D 74. According to IIA guidance on IT. which of the following would be considered a primary control for a spreadsheet to help ensure accurate financial reporting? A. Formulas and static data are locked or protected. B. The spreadsheet is stored on a network server that is backed up daily. C. The purpose and use of the spreadsheet are documented. D. Check-in and check-out software is used to control versions. Answer: A 75. Which of the following statements about matrix organizations is false? A. In a matrix organization, conflict between functional and product managers may arise. B. In a matrix organization, staff under dual command is more likely to suffer stress at work. C. Matrix organizations offer the advantage of greater flexibility. D. Matrix organizations minimize costs and simplify communication. Answer: D 76. Organizational activities that complement each other and create a competitive advantage are called a: A. Merger. B. Strategic fit. C. Joint venture. D. Strategic goal. Answer: B Powered by TCPDF (www.tcpdf.org) 16 / 16 https://www.dumpsinfo.com/ http://www.tcpdf.org
