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

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 401:

  As an organization introduces new technologies, what is internal audit's primary consideration for evaluating the organization's change management system?

  A. How the organization handles emergency change requests.
  B. Whether a change management system exists and can meet the organization's objectives.
  C. How the organization adjusts as business risks change.
  D. Whether the organization considers changes in capacity requirements.
  B. Whether a change management system exists and can meet the organization's objectives.

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  Explanation

• Question 402:

  At one organization, the specific terms of a contract require both the promisor and promisee to sign the contract in the presence of an independent witness. What is the primary role of the witness to these signatures?

  A. A witness verifies the quantities of the copies signed
  B. A witness verifies that the contract was signed with the free consent of the promisor and promisee
  C. A witness ensures the completeness of the contract between the promisor and promisee
  D. A witness validates that the signatures on the contract were signed by the promisor and promisee
  D. A witness validates that the signatures on the contract were signed by the promisor and promisee

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  Explanation

• Question 403:

  An organization decided to reorganize into a atter structure. Which of the following changes would be expected with this new structure?

  A. Lower costs
  B. Slower decision making at the senior executive level
  C. Limited creative freedom in lower-level managers
  D. Senior-level executives more focused on short-term routine decision making
  A. Lower costs

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  Explanation

• Question 404:

  According to Herzberg's Two-Factor Theory of Motivation, which of the following factors are mentioned most often by satisfied employees?

  A. Salary.
  B. Achievement.
  C. Security.
  D. Relationship with supervisor.
  B. Achievement.

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  Explanation

• Question 405:

  Which of the following forms of compensation best indicates that an organization's cost-saving objectives have been targeted?

  A. Gain sharing
  B. Commission
  C. Profit sharing
  D. Pension
  A. Gain sharing

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  Explanation

  Comprehensive and Detailed In-Depth Explanation:

  Gain sharing is a compensation program where employees receive bonuses tied directly to the company's cost- saving measures and productivity improvements. This approach aligns employees' interests with organizational goals by

  rewarding them for identifying and implementing efficiencies that reduce costs. Unlike profit sharing, which is based on overall profitability, gain sharing focuses specifically on performance improvements that lead to cost savings.

  Commissions are typically related to sales performance, and pensions are long-term retirement benefits not directly linked to immediate cost-saving efforts. Therefore, gain sharing is the most indicative of targeting cost-saving objectives.

• Question 406:

  Which of the following is a benefit of implementing an electronic communication system?

  A. Relatively low capital expenditures are required.
  B. The company's comparative advantage over smaller firms that cannot afford such a system will increase.
  C. There is little need for additional resource allocation to facilitate implementation of the system.
  D. The sophistication of electronic communication systems eliminates the need for backup files and data recovery systems.
  B. The company's comparative advantage over smaller firms that cannot afford such a system will increase.

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  Explanation

  Implementation of an electronic communication system improves the technology of a company. This increases the company's advantage over smaller companies that cannot afford electronic communication systems.

• Question 407:

  In order to provide useful information for an organization's risk management decisions, which of the following factors is least important to assess?

  A. The underlying causes of the risk.
  B. The impact of the risk on the organization's objectives.
  C. The risk levels of current and future events.
  D. The potential for eliminating risk factors.
  D. The potential for eliminating risk factors.

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  Explanation

• Question 408:

  Which of the following is least appropriate with regard to management's approach to informal group or grapevine communication? Management should:

  A. Use informal group information to supplement communication channels of the formal organization.
  B. Try to suppress informal group information as a possible source of conflicting information.
  C. Take advantage of informal group information as a device to correct misinformation.
  D. Make use of informal group information as a means of transmitting information not appropriate for formal communication channels.
  B. Try to suppress informal group information as a possible source of conflicting information.

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  Explanation

  Suppressing grapevine networks is difficult, if not impossible. Recognizing that the grapevine exists and can be used effectively for several kinds of messages makes better managerial sense.

• Question 409:

  As part of internal audit's risk assessment, a chief audit executive is determining certain factors as part of planning the areas to audit within an organization that makes silicon chips. Which of the following would be considered a subjective factor as part of the risk assessment?

  A. The number of vendors able to meet the supply demand request from the organization
  B. The quality of the staff supervision of silicon chips produced by the organization
  C. The length of time since the last audit of the organization's manufacturing facilities
  D. The asset value of the silicon chips that the organization did not produce because of a shortage in raw materials
  B. The quality of the staff supervision of silicon chips produced by the organization

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  Explanation

  Subjective factors are based on judgment or opinion, whereas objective factors rely on measurable data. The quality of staff supervision is a judgment-based assessment, making it subjective.

  Options A, C, and D are measurable, quantitative factors and thus objective.

  IIA Practice Guide - Developing a Risk-Based Internal Audit Plan.

• Question 410:

  The technique that calls for the manager to concentrate on tasks that are most closely related to the manager's strengths is:

  A. Keeping an activity log for about a week.
  B. Creating a prioritized to-do list.
  C. Prioritizing work.
  D. Developing an action plan.
  C. Prioritizing work.

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  Explanation

  The are several common techniques that managers use for effective time management. One of those techniques is prioritizing work. There are three methods that can be employed to prioritize work. The first one is for the manager to concentrate on the things that (s)he enjoys. The second is for the manager to concentrate on tasks most closely related to his/her strengths. The third method is for the manager to determine how (s)he is being evaluated and to prioritize tasks accordingly.