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IIA-CIA-PART3 Real Exam Questions

Certified Internal Auditor - Part 3 study guide with online review

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Question 1 Single choice

According to Michael E Porter's generic strategies model, a firm that successfully adopts a differentiation strategy is most likely to:

  1. A

    Tend to disregard cost control.

  2. B

    Risk overlooking product changes.

  3. C

    Closely supervise its labor force.

  4. D

    Be able to pass supplier cost increases on to its customers.

Show answer and explanation

Correct answer: D

Explanation

Differentiation is the generic strategy favored by firms that seek competitive advantage through providing a unique product or service and that have a broad competitive scope. A successful differentiation strategy creates a consumer perception that few, if any, substitutes are available. Thus, a firm that adopts this strategy may have the additional advantage of being able to pass supplier cost increases to consumers.

Question 2 Single choice

Which of the following sites would an Internet service provider most likely use to restore operations after its servers were damaged by a natural disaster?

  1. A

    On site.

  2. B

    Cold site.

  3. C

    Hot site.

  4. D

    Warm site

Show answer and explanation

Correct answer: C

Explanation

A hot site is a fully operational, ready-to-use backup site that allows an organization to quickly resume business operations after a disaster. For an Internet Service Provider (ISP) , maintaining continuous operations is critical, and a hot site ensures minimal downtime by providing pre-configured hardware, software, and network connectivity.

A. On-site - Keeping backups and disaster recovery infrastructure on-site is risky because it can be
affected by the same disaster that damaged the primary servers.

B. Cold site- A cold site is a backup location that has infrastructure but lacks pre-installed systems and
configurations. It takes significant time to become operational, making it unsuitable for an ISP needing quick recovery.

C. Hot site (Correct Answer) - A hot site is fully operational , with replicated data, applications, and network
configurations that allow an ISP to quickly switch operations, minimizing service disruption.

D. Warm site - A warm site is partially equipped with some hardware and software but requires
configuration before becoming operational. This delays recovery compared to a hot site .

IIA GTAG (Global Technology Audit Guide) 10 - Business Continuity Management emphasizes the importance of hot sites for organizations requiring real-time service restoration . IIA IPPF Standard 2120 -

Risk Management advises organizations to assess disaster recovery plans and ensure continuity strategies align with business needs.

COBIT 2019 - DSS04 (Managed Continuity) discusses different recovery site types and their impact on business continuity.

Question 3 Single choice

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?

  1. A

    Monitoring access to the online database.

  2. B

    Backing up and maintaining archived data.

  3. C

    Responding to customer inquiries.

  4. D

    Maintaining and assuring network security.

Show answer and explanation

Correct answer: C

Question 4 Single choice

The most effective way fora supervisor to delegate a task to an employee is to:

  1. A

    Define the desired outcome and the approach precisely and in writing.

  2. B

    Define the desired outcome precisely, discuss possible approaches with the employee, and reach agreement on the approach to be taken.

  3. C

    Let the employee try to perform the task fora defined period of time and then meet to critique the approach, clarify the assignment as needed.

  4. D

    Give the assignment in very general terms, have the employee develop the desired outcome and approach, and then review and critique the employee's decisions.

Show answer and explanation

Correct answer: B

Explanation

The supervisor's expectations should be clear. The employee should also be involved in determining how to reach the desired outcome, thereby increasing both acceptance and understanding of the assignment.

Question 5 Single choice

Which of the following is an advantage of a tall organizational structure?

  1. A

    The flow of communications from top to bottom and bottom to top is improved.

  2. B

    The organization's overall objectives are familiar to all employees.

  3. C

    More opportunity to advance.

  4. D

    Labor expenses are reduced.

Show answer and explanation

Correct answer: C

Explanation

The organizational structure consists of the order, disposition, and relationships of positions and lines of responsibility within an entity. In a tall organizational structure, decision-making responsibility is shared by many levels.

Question 6 Single choice

In the years after the mind-service point of a depreciable asset, which of the following depreciation methods will result in the highest depreciation expense?

  1. A

    Sum of the years' digits

  2. B

    Declining balance

  3. C

    Double-declining balance

  4. D

    Straight line

Show answer and explanation

Correct answer: A

Question 7 Single choice

Motivation is:

  1. A

    The extent to which goal-specific performance is recognized by supervisors.

  2. B

    The extent to which individuals have the authority to make decisions.

  3. C

    The extent of the attempt to accomplish a specific goal.

  4. D

    The desire and the commitment to achieve a specific goal.

Show answer and explanation

Correct answer: D

Explanation

Motivation is the desire to attain a specific goal goal congruence) and the commitment to accomplish the goal managerial effort). Managerial motivation is therefore a combination of managerial effort and goal congruence.

Question 8 Single choice

Which of the following are the most appropriate measures for evaluating the change in an organization's liquidity position?

  1. A

    Times interest earned, return on assets, and inventory turnover.

  2. B

    Accounts receivable turnover, inventory turnover in days, and the current ratio.

  3. C

    Accounts receivable turnover, return on assets, and the current ratio.

  4. D

    Inventory turnover in days, the current ratio, and return on equity.

Show answer and explanation

Correct answer: B

Question 9 Single choice

Intensity of rivalry among existing firms in an industry increases when:

  1. A

    Products are relatively undifferentiated.
    II.Consumer switching costs are low.

  2. B

    I only.

  3. C

    II only.

  4. D

    Both I and II.

  5. E

    Neither I nor II.

Show answer and explanation

Correct answer: C

Explanation

The degree of product differentiation and the costs of switching from one competitor's product to another increase the intensity of rivalry and competition in an industry. Less differentiation tends to heighten competition based on price, with price cutting leading to lower profits. Low costs of switching products also increase competition.

Question 10 Single choice

Edward T. Hall has distinguished between high-context and low-context cultures.

Which culture is high-context?

  1. A

    United States.

  2. B

    Canada.

  3. C

    Germany.

  4. D

    Japan.

Show answer and explanation

Correct answer: D

Explanation

Hall drew a distinction between high-context and low-context cultures. In high-context cultures (e.g., Japanese, Chinese, Arabic, and Korean), much meaning is transmitted by nonverbal cues and situational circumstances. Thus, a person's status in a firm, rank in society, and reputation convey the primary message.
Section 2:Sec Two (51 to 90)
Details:
Industry and Market Analysis