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

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 251:

  A chief audit executive (CAE) is developing a strategic plan for the internal audit function. In the last two years, the organization has faced significant IT risks, but the internal audit function has not been able to audit those areas due to a lack of knowledge.

  How could the CAE address this in the strategic plan?

  A. Purchase a data analytics program for the internal audit function
  B. Hold listening sessions to receive management's input on the strategic plan
  C. Develop a succession plan for the internal audit function to avoid staffing deficiencies
  D. Identify relevant training resources to strengthen staff skillsets
  D. Identify relevant training resources to strengthen staff skillsets

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  Explanation

  The CAE must ensure the internal audit activity has the knowledge, skills, and competencies needed to address significant risks facing the organization. In this scenario, IT risks have not been audited due to a skills gap. The best response is

  to identify and provide training resources to strengthen the team's IT audit capabilities.

  Option A (data analytics) is a tool, not a competency solution. Option B (listening sessions) helps planning but does not address the skill deficiency. Option C (succession planning) is future-focused but does not solve the current IT knowledge

  gap.

  IIA Standards - Standard 1210: Proficiency.

• Question 252:

  Which of the following is not an example of positive reinforcement of behavior?

  A. Paying a bonus to employees who had no absences for any four-week period.
  B. Giving written warnings to employees after only every other absence.
  C. Assigning a mentor to each employee who exhibits a desire to develop leadership skills.
  D. Having a lottery every month where 10% of the employees with no absences receive a US $200 bonus.
  B. Giving written warnings to employees after only every other absence.

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  Explanation

  Positive reinforcement encourages a desired behavior by following it with the presentation of a reward. Punishment, on the other hand, discourages an undesired behavior by following it with a negative consequence. While punishment ideally should follow every occurrence of an undesirable behavior, this is not always possible. Thus, even though written warnings are given to employees only after every other absence, the action is considered punishment, not positive reinforcement.

• Question 253:

  Which of the following is not a technological factor that may lead to overbuilding?

  A. Long lead times for adding capacity.
  B. Changes in production technology.
  C. The presence of economies of scale.
  D. High exit barriers.
  D. High exit barriers.

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  Explanation

  The following are technological factors that may lead to overbuilding:

  (1)

  capacity may need to be added in large increments; (2) the presence of economies of scale or a steep learning curve encourages preemption; (3) long lead times for adding capacity increase the risk of competitive inferiority if a firm does not act quickly to raise capacity;

  (4)

  when the minimum efficient scale increases, large plants are becoming more efficient even though demand is not growing:and (5) changes in production technology result in new construction while old plants remain in operation. High exit barriers are a structural factor that may lead to overbuilding. The effect of high exit barriers is to extend the period of overcapacity.

• Question 254:

  Which of the following statements is true regarding an investee that received a dividend distribution from an entity and is presumed to have little influence over the entity?

  A. The cash dividends received increase the investee investment account accordingly.
  B. The investee must adjust the investment account by the ownership interest.
  C. The investment account is adjusted downward by the percentage of ownership.
  D. The investee must record the cash dividends as dividend revenue.
  D. The investee must record the cash dividends as dividend revenue.

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  Explanation

• Question 255:

  Which of the following IT operational areas is responsible for the integrity of data flow within an organization?

  A. Network
  B. Database
  C. Operating system
  D. Server
  A. Network

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  Explanation

• Question 256:

  Which of the following is true regarding the COSO enterprise risk management framework?

  A. The framework categorizes an organization's objectives to distinct, non overlapping objectives.
  B. Control environment is one of the framework's eight components.
  C. The framework facilitates effective risk management, even if objectives have not been established.
  D. The framework integrates with, but is not dependent upon, the corresponding internal control framework.
  D. The framework integrates with, but is not dependent upon, the corresponding internal control framework.

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  Explanation

• Question 257:

  A reasonable BATNA (best alternative to a negotiated agreement) protects against bad decisions caused by the following:

  A. Framing error II. Escalation of commitment III. Overconfidence
  B. I and Ill only.
  C. I, II, and Ill.
  D. I only.
  E. II and Ill only.
  B. I and Ill only.

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  Explanation

  A reasonable BATNA protects against bad decisions caused by the following:framing error, escalation of commitment, and overconfidence. Framing error is a perceptual problem. The presentation or context of information may bias its interpretation and the resulting decision. Escalation of commitment is adherence to a failing course of action when a purely objectivedecision maker would abandon it. Overconfidence is the common tendency to overestimate the chances of success.

• Question 258:

  Senior management is trying to decide whether to use the direct write-off or allowance method for recording bad debt on accounts receivables.

  Which of the following would be the best argument for using the direct write-off method?

  A. It is useful when losses are considered insignificant.
  B. It provides a better alignment with revenue.
  C. It is the preferred method according to The IIA.
  D. It states receivables at net realizable value on the balance sheet.
  B. It provides a better alignment with revenue.

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  Explanation

• Question 259:

  For which of the following scenarios would the most recent backup of the human resources database be the best source of information to use?

  A. An incorrect program fix was implemented just prior to the database backup
  B. The organization is preparing to train all employees on the new self-service benefits system
  C. There was a data center failure that requires restoring the system at the backup site
  D. There is a need to access prior year-end training reports for all employees in the human resources database
  C. There was a data center failure that requires restoring the system at the backup site

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  Explanation

• Question 260:

  Which of the following statements is true regarding data backup?

  A. System backups should always be performed real time.
  B. Backups should be stored in a secured location onsite for easy access.
  C. The tape rotation schedule affects how long data is retained.
  D. Backup media should be restored only in case of a hardware or software failure.
  D. Backup media should be restored only in case of a hardware or software failure.

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  Explanation