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

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 421:

  Understanding the best alternative to a negotiated agreement (BATNA) helps a negotiator to avoid which of the following? I. Accepting an unfavorable settlement. II. Rejecting a favorable settlement:

  A. I only.
  B. II only.
  C. land II.
  D. Neither I nor II.
  C. land II.

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  Explanation

  Accepting an unfavorable settlement and rejecting a favorable settlement are two mistakes avoided by understanding the BATNA. The BATNA is the acceptable minimum outcome if a negotiator cannot obtain the desired result.

• Question 422:

  A department purchased one copy of a software program for internal use. The manager of the department installed the program on an office computer and then made two complete copies of the original software.

  Copy 1 was solely for backup purposes.

  Copy 2 was for use by another member of the department.

  In terms of software licenses and copyright law, which of the following is correct?

  A. Both copies are legal.
  B. Only copy 1 is legal.
  C. Only copy 2 is legal.
  D. Neither copy is legal.
  B. Only copy 1 is legal.

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  Explanation

• Question 423:

  A firm considering entry into an emerging industry must be aware of many strategic factors. Thus, the firm must anticipate that:

  A. Early mobility barriers are likely to persist.
  B. Early commitment to suppliers is a strategic trap.
  C. The high cost of opening the market favor early entry.
  D. The nature of entrants may change.
  D. The nature of entrants may change.

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  Explanation

  The nature of entrants may change to include larger firms attracted by the proven and less risky industry. Firms must predict when such entry is likely given existing and probable future barriers and the costs of surmounting them. Firms also need to predict how new entrants will compete, e.g., on the basis of marketing power or economies of scale. Furthermore, new entrants may emerge through vertical integration.

• Question 424:

  Which of the following Issues would be a major concern for internal auditors when using a free software to analyze a third-party vendor's big data?

  A. The ability to use the software with ease to perform the data analysis to meet the engagement objectives.
  B. The ability to purchase upgraded features of the software that allow for more In-depth analysis of the big data.
  C. The ability to ensure that big data entered into the software is secure from potential compromises or loss.
  D. The ability to download the software onto the appropriate computers for use in analyzing the big data.
  C. The ability to ensure that big data entered into the software is secure from potential compromises or loss.

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  Explanation

  Comprehensive and Detailed Step-by-Step

  Explanation with all IIA References:

  Understanding the Concern:

  Internal auditors must assess risks when using free software for data analysis, particularly regarding data security, confidentiality, and integrity .

  When analyzing third-party vendor data, the primary risk is data compromise, unauthorized access, or data loss due to inadequate security controls in free software.

  Why Data Security is the Biggest Concern:

  Free software often lacks robust security measures , making sensitive vendor data susceptible to breaches, cyberattacks, or loss .

  Ensuring compliance with data protection regulations (e.g., GDPR, CCPA) and contractual obligations with third-party vendors is critical.

  Why Other Options Are Incorrect:

  Option A: The ability to use the software with ease # While usability is important, security risks outweigh ease of use in an internal audit context.

  Option B: The ability to purchase upgraded features # Upgrades may improve analysis capabilities but do not address security concerns.

  Option D: The ability to download the software # Installing software is a technical issue, not a major audit concern compared to security.

  IIA Standards and References:

  IIA Standard 2110 - Governance: Internal auditors should ensure data security risks are addressed in technology use.

  IIA Standard 2120 - Risk Management: Auditors must evaluate the organization's ability to safeguard data.

  IIA GTAG (Global Technology Audit Guide) on Data Analytics (2017): Recommends ensuring security of third-party data when using analytical tools.

  Thus, the correct answer is C: The ability to ensure that big data entered into the software is secure from potential compromises or loss.

• Question 425:

  In terms of international business strategy, which of the following is true regarding a multi-domestic strategy?

  A. It uses the same products in all countries.
  B. It centralizes control with little decision-making authority given to the local level.
  C. It is an effective strategy when large differences exist between countries.
  D. It provides cost advantages, improves coordinated activities, and speeds product development.
  C. It is an effective strategy when large differences exist between countries.

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  Explanation

• Question 426:

  A firm sells the same product in different countries and uses the same promotion methods. According to keegan's model of adaptation strategies, this firm has adopted a strategy of

  A. Straight extension.
  B. Product adaptation.
  C. Product invention.
  D. Dual adaptation.
  A. Straight extension.

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  Explanation

  Using a straight extension strategy, a higher profit potential exists because virtually no changes are made in the products or its promotion. There is a downside potential if foreign consumers are not familiar with this type of product or do not readily accept it.

• Question 427:

  A financial technology startup consists of self-managed teams. Although each team can make proposals to other teams, decision-making lies within each individual team. Which of the following risks could arise from this organizational structure?

  A. Processes are bureaucratic.
  B. Decision-making is slow.
  C. Resources are duplicated.
  D. Power is overconcentrated.
  C. Resources are duplicated.

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  Explanation

• Question 428:

  When an organization is choosing a new external auditor, which of the following is the most appropriate role for the chief audit executive to undertake?

  A. Review and acquire the external audit service.
  B. Assess the appraisal and actuarial services.
  C. Determine the selection criteria.
  D. Identify regulatory requirements to be considered.
  D. Identify regulatory requirements to be considered.

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  Explanation

• Question 429:

  Which of the following practices circumvents administrative restrictions on smart devices, thereby increasing data security risks?

  A. Rooting.
  B. Eavesdropping.
  C. Man in the middle.
  D. Session hijacking.
  A. Rooting.

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  Explanation

• Question 430:

  Which of the following documents would provide an internal auditor with information on the length of time to maintain documents after the completion of an engagement?

  A. Internal audit charter
  B. Annual internal audit plan
  C. Internal audit policies
  D. Quality assurance and improvement program
  C. Internal audit policies

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  Explanation

  The retention and maintenance of internal audit engagement records, including the period of time they must be kept, is governed by the internal audit activity's policies and procedures. These policies provide guidance on record retention

  consistent with organizational requirements, legal and regulatory obligations, and professional standards.

  The charter (Option A) defines purpose, authority, and responsibility but does not detail document retention. The annual plan (Option B) outlines engagements but not recordkeeping. The quality assurance and improvement program (Option

  D) addresses continuous improvement and compliance with standards, not retention guidelines.

  Therefore, the correct source for document retention requirements is internal audit policies (Option C).

  IIA Standards - Standard 2330: Documenting Information; Implementation Guide 2330.