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

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 511:

  Which of the following key performance indicators would serve as the best measurement of internal audit innovation?

  A. The number of scheduled and completed audits and percentage of substantial recommendations
  B. The board's satisfaction index and internal audit staff commitment ratings
  C. Internal audit staff's application of technology in audit fieldwork and participation in professional organizations and publications
  D. Internal audit staff's compliance with the audit manual and technical knowledge in auditing, information security, and cloud computing issues
  C. Internal audit staff's application of technology in audit fieldwork and participation in professional organizations and publications

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  Explanation

  Innovation in internal audit is reflected in how the function applies new technologies, methodologies, and thought leadership. Measuring staff application of technology in audit fieldwork and their engagement in professional organizations/

  publications demonstrates innovation and forward-looking practices.

  Options A, B, and D measure performance, satisfaction, or compliance but do not specifically address innovation.

  IIA Practice Guide - Measuring Internal Audit Effectiveness and Efficiency.

• Question 512:

  Which of the following methods, if used in conjunction with electronic data interchange (EDI), will improve the organization's cash management program, reduce transaction data input time and errors, and allow the organization to negotiate discounts with EDI vendors based on prompt payment?

  A. Electronic funds transfer.
  B. Knowledge-basedsystems.
  C. Biometrics.
  D. Standardized graphical user interface.
  A. Electronic funds transfer.

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  Explanation

• Question 513:

  Which of the following is the most important contract term to audit, because it typically impacts business efficiency?

  A. Warranty service
  B. Extraordinary circumstance clause
  C. Indemnities
  D. Limitation of liability
  C. Indemnities

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  Explanation

• Question 514:

  Which of the following statements pertaining to a market skimming pricing strategy is not true?

  A. The strategy is favored when unit costs fall with the increase in units produced.
  B. The strategy is favored when buyers are relatively insensitive to price increases.
  C. The strategy is favored when there is insufficient market capacity and competitors cannot increase market capacity.
  D. The strategy is favored when high price is perceived as high quality.
  A. The strategy is favored when unit costs fall with the increase in units produced.

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  Explanation

• Question 515:

  Which of the following motivational theories are most alike in that both theories assume employees want to work and can do so unsupervised?

  A. Theory X and Theory Y.
  B. Theory X and Theory Z.
  C. Theory Y and Theory Z.
  D. Theory Y and Herzberg's two-factor theory.
  C. Theory Y and Theory Z.

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  Explanation

  Ouchi's Theory Z is based on the Japanese practice of providing long-term employment to workers. Decisions are made on a team basis, and trust is an important aspect of the theory, including the issue of trusting employees to complete their work satisfactorily and unsupervised. Theory Y assumes that Iiemployees like to work and will do so unsupervised.

• Question 516:

  According to IIA guidance, which of the following steps are most important for an internal auditor to perform when evaluating an organization's social and environmental impact on the local community?

  1. Determine whether previous incidents have been reported, managed, and resolved.

  2. Determine whether a business contingency plan exists.

  3. Determine the extent of transparency in reporting.

  4. Determine whether a cost/benefit analysis was performed for all related projects.

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

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  Explanation

• Question 517:

  For an engineering department with a total quality management program, important elements of quality management include all of the following except:

  A. Basing performance evaluations on the number of projects completed.
  B. Comparing results with those of other engineering departments.
  C. Creating a quality council within the engineering department.
  D. Conducting post-project surveys on performance.
  A. Basing performance evaluations on the number of projects completed.

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  Explanation

• Question 518:

  A manager believes that the department's most valuable resource is the employees' time. The manager enforces a set of rigid rules for employees. A characteristic of this leadership style is that

  A. Employees are encouraged to participate in decision making.
  B. Personal interaction among employees is limited.
  C. Organizational objectives are coordinated with each employee's goals.
  D. The manager's perceptions are similar to McGregor's Theory Y.
  B. Personal interaction among employees is limited.

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  Explanation

  The characteristics of a leadership style based on deadlines and strict rules include an emphasis on relatively inflexible congruence with the organization's overall goals, perceptions related to McGregor's Theory X, and limitations on interaction and communication among employees.

• Question 519:

  Which of the following is true regarding bonds?

  A. Bondholders do not have voting rights but obtain corporate control via interest pay-outs.
  B. Debenture bonds are rarely used by organizations with good credit ratings.
  C. Using bonds involves paying interest on a periodic basis and repaying the principal at the due date.
  D. Debenture bonds have specific assets pledged by the organization as collateral for the bonds.
  C. Using bonds involves paying interest on a periodic basis and repaying the principal at the due date.

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  Explanation

• Question 520:

  An information flow factor that may lead to industry overcapacity is:

  A. The need to give assurance to large customers.
  B. Stable industry structure.
  C. Presence of tax incentives.
  D. Untrustworthy market signaling.
  D. Untrustworthy market signaling.

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  Explanation

  Market signaling may be ineffective because it is no longer regarded as credible. Firms' signals may no longer be trusted as indicators of planned moves, such as expansion, because of new entrants, a period of bitter rivalry, or other reasons. Credible signaling fosters orderly expansion by allowing all parties to plan effectively.