IIA IIA-CIA-PART3 Online Practice Questions and Exam Preparation

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 1231:

  Which of the following statements is accurate when planning for an external quality assurance assessment of the internal audit function?

  A. The external assessment would include the audit function's compliance with laws and regulations
  B. The selected qualified assessor can be from the organization's shared services team
  C. The external assessment team members must work for an accounting firm
  D. The frequency of the performance of assessments should be considered by the assessor
  D. The frequency of the performance of assessments should be considered by the assessor

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  Explanation

  The external quality assessment must be performed at least once every five years. Therefore, the assessor must consider the frequency requirement when planning the review.

  Option A is too narrow; the assessment evaluates conformance with the Standards, not just laws/regulations. Option B is incorrect because assessors must be independent of the organization. Option C is incorrect; assessors may come from

  various professional backgrounds, not just accounting firms.

  IIA Standards - Standard 1312: External Assessments.

• Question 1232:

  Which of the following best describes a man-in-the-middle cyberattack?

  A. The perpetrator is able to delete data on the network without physical access to the device
  B. The perpetrator is able to exploit network activities for unapproved purposes
  C. The perpetrator is able to take over control of data communication in transit and replace traffic
  D. The perpetrator is able to disable default security controls and introduce additional vulnerabilities
  C. The perpetrator is able to take over control of data communication in transit and replace traffic

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  Explanation

• Question 1233:

  Which of the following is not a characteristic of decentralized organizations?

  A. Decentralized organizations are usually more flexible.
  B. Decentralized organizations have reduced costs through resource sharing.
  C. Decentralized organizations have fewer decisions made lower in the hierarchy that are monitored by senior management.
  D. Decentralization has a positive influence on morale.
  B. Decentralized organizations have reduced costs through resource sharing.

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  Explanation

  The main benefits of centralization are more effective control and reduced costs through resource sharing. In a centralized organization, senior management is able to direct control over subordinates and direct the flow of resources. Senior management is able to allocate reduce costs most effectively because they are aware of where expenses can be reduced across departments within an organization.

• Question 1234:

  When uncertainty about an industry's future is greatest and other markets for the firm's assets are favorable, it should most likely follow a:

  A. Harvest strategy.
  B. Quick divestment strategy.
  C. Leadership strategy.
  D. Niche strategy.
  B. Quick divestment strategy.

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  Explanation

  A quick divestment strategy assumes that the highest net recovery is obtained by sale early in the decline phase. It is then that uncertainty about the industry's future is greatest and other markets for the assets are most favorable. Indeed, divestiture may be indicated during the maturity phase prior to decline. But the firm risks being wrong about the onset of the decline phase. Quick divestment should be chosen when the industry structure is unfavorable, and the firm lacks strengths in the remaining pockets of demand.

• Question 1235:

  An internal auditor is reviewing the sales and collections processes of an e-commerce organization that is facing budget constraints. The auditor found that the accountant did not perform reconciliations of cash collections in a timely manner. The auditor determined that the reason was timing errors in the interfacing process between the customer payments portal and the accounting system. The current customer payments portal was recently implemented to replace a legacy system. The finance manager is in charge of the customer payments portal.

  Which of the following recommendations is the most appropriate to address the root cause of this deficiency?

  A. The accountant, in view of the budget constraints, should consider a manual workaround to include unposted transactions into the accounting system in a timely
  B. Management should consider investing in a new customer payments portal, as the existing portal is unable to interface accurately with the accounting system
  C. The finance manager should work with IT and the vendor of the customer payments portal to rectify the interfacing errors
  D. The accountant should perform reconciliations of cash collections to customer payment records and investigate exceptions in a timely manner
  C. The finance manager should work with IT and the vendor of the customer payments portal to rectify the interfacing errors

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  Explanation

  The root cause is the system interface errors between the customer payments portal and the accounting system. The most appropriate recommendation is for the finance manager to collaborate with IT and the system vendor to correct the

  interfacing issue.

  Option A (manual workaround) is temporary and inefficient. Option B (new portal) is costly and unnecessary when the existing one can be fixed. Option D addresses symptoms but not the root cause.

  IIA Standards - Standard 2130: Control; GTAG - Business and IT Alignment.

• Question 1236:

  Which of the following are typical audit considerations for a review of authentication?

  1. Authentication policies and evaluation of controls transactions.

  2. Management of passwords, independent reconciliation, and audit trail.

  3. Control self-assessment tools used by management.

  4. Independent verification of data integrity and accuracy.

  A. 1, 2, and 3
  B. 1, 2, and 4
  C. 1, 3, and 4
  D. 2, 3, and 4
  A. 1, 2, and 3

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  Explanation

• Question 1237:

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

  A. Draws positive attention to the writing style.
  B. Treats all receivers with respect.
  C. Suits the method of presentation and delivery.
  D. Develops ideas without overstatement.
  A. Draws positive attention to the writing style.

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  Explanation

• Question 1238:

  Which of the following is useful for forecasting the required level of inventory?

  1. Statistical modeling.

  2. Information about seasonal variations in demand.

  3. Knowledge of the behavior of different business cycles.

  4. Pricing models linked to seasonal demand.

  A. 1 and 2 only
  B. 2 and 3 only
  C. 1, 2, and 3 only
  D. 1, 2, 3, and 4
  C. 1, 2, and 3 only

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  Explanation

• Question 1239:

  A line on a spreadsheet includes an employee's name, date of hire, job title, and monthly salary. Which of the following correctly describes this line information?

  A. Field.
  B. File.
  C. Record.
  D. Database.
  C. Record.

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  Explanation

• Question 1240:

  Which of the following would not be considered a conflict trigger?

  A. Ambiguous jurisdictions.
  B. Competition for scarce resources.
  C. Status differential.
  D. Super ordinategoals.
  D. Super ordinategoals.

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  Explanation

  An appeal to super ordinate goals is a means of resolving conflict.Super ordinategoals are overriding, common goals of the parties. The conflict can be resolved if the individuals involved understand that it is preventing them from achieving more important, mutually held goals.