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

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 691:

  The optimal span of control of a manager is contingent upon several situational variables. For instance, a manager supervising workers within the same work area who are performing identical tasks that are simple and repetitive would best be able to supervise:

  A. An unlimited number of employees.
  B. Only a few workers a narrow span of control).
  C. A relatively large number of employees a wide span of control).
  D. Fewer workers than if the workers were geographically dispersed.
  C. A relatively large number of employees a wide span of control).

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  Explanation

  In any situation, there are underlying variables that influence the number of subordinates a manager can supervise. In general, if jobs are similar, procedures are standardized, and physical dispersion is minimized, a wide span of control is most effective.

• Question 692:

  An organization invests excess snort-term cash in trading securities. When of the following actions should an internal auditor take to test the valuation of those securities?

  A. Use the equity method to recalculate the investment carrying value
  B. Confirm the securities held by the broker
  C. Perform a calculation of premium or discount amortization.
  D. Compare the carrying value with current market quotations
  D. Compare the carrying value with current market quotations

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  Explanation

• Question 693:

  Which of the following common quantitative techniques used in capital budgeting is best associated with the use of a table that describes the present value of an annuity?

  A. Cash payback technique.
  B. Discounted cash flow technique: net present value.
  C. Annual rate of return
  D. Discounted cash flow technique: internal rate of return.
  D. Discounted cash flow technique: internal rate of return.

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  Explanation

  Capital budgeting techniques help organizations evaluate long-term investment decisions by assessing future cash flows and their present value. A present value of an annuity table is commonly used in methods that involve discounted cash

  flows over multiple periods .

  Let's analyze the options:

  Option A: Cash payback technique.

  Incorrect. The payback period simply calculates the time needed to recover an investment and does not use discounting or present value tables.

  Option B: Discounted cash flow technique: net present value (NPV).

  Incorrect. While NPV involves discounting future cash flows, it does not specifically rely on the present value of an annuity table . Instead, NPV uses individual present values of cash flows at a specific discount rate.

  Option C: Annual rate of return.

  Incorrect. This method calculates return on investment based on accounting numbers and does not involve discounting future cash flows.

  Option D: Discounted cash flow technique: internal rate of return (IRR). # (Correct Answer)

  Correct. The IRR method determines the discount rate that equates the present value of cash inflows to the initial investment (i.e., NPV = 0).

  The present value of an annuity table is essential in IRR calculations, especially when future cash flows occur at regular intervals.

  IRR is widely used in capital budgeting to compare different investment opportunities.

  IIA GTAG (Global Technology Audit Guide) - Auditing Capital Budgeting Decisions - Discusses techniques used for investment evaluation.

  COSO ERM Framework ?Financial Decision-Making - Covers capital budgeting risks and techniques.

  GAAP and IFRS - Investment Decision Guidelines - Explains the importance of present value calculations in investment evaluations.

  IIA Standard 2130 ?Control Over Capital Investments - Focuses on internal audit's role in assessing capital budgeting techniques.

• Question 694:

  Which of the following should be established by management during implementation of big data systems to enable ongoing production monitoring?

  A. Key performance indicators
  B. Reports of software customization
  C. Change and patch management
  D. Master data management
  A. Key performance indicators

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  Explanation

• Question 695:

  Which of the following is true regarding the most recent traitist approach to leadership?

  A. The most recent traitist approach to leadership attempts to identify traits possessed by leaders.
  B. The most recent traitist approach to leadership has produced such a long list of leadership traits that, in effect, the approach identifies nothing.
  C. The most recent traitist approach to leadership is based on scholarship, dependability, and social participation.
  D. The most recent traitist approach to leadership is based on social skills, judgment, maturity, and emotional control.
  D. The most recent traitist approach to leadership is based on social skills, judgment, maturity, and emotional control.

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  Explanation

  The most recent traitist approach is based on the emotional intelligence of leaders, that is, their social skills and judgment, maturity, and emotional control. These abilities can be learned, especially when a manager or employee understands that immaturity, erratic behavior, and uncontrolled negative emotions have a bad effect on the workplace.

• Question 696:

  While auditing a marketing department, the internal auditor discovered that the product life cycle model was used to structure the marketing mix. The manager has asked the auditor for advice about increasing advertising of various products. During which stage of the life cycle would it be appropriate to advertise that the company's product is the lowest price and best quality of all competitors?

  A. Introduction stage.
  B. Growth stage.
  C. Maturity stage.
  D. Decline stage.
  C. Maturity stage.

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  Explanation

  The maturity stage is the ideal time for advertising lower prices and superior quality because this is the period during a product's life when competition is greatest. Due to the availability of many substitutes, a firm has reasons to set itself apart. Because price and quality are both concerns of customers during the maturity stage, it is an ideal time for the firm to differentiate its product by advertising low prices and higher quality.

• Question 697:

  An employee was promoted within the organization and relocated to a new office in a different building. A few months later, security personnel discovered that the employee's smart card was being used to access the building where she previously worked. Which of the following security controls could prevent such an incident from occurring?

  A. Regular review of logs.
  B. Two-level authentication.
  C. Photos on smart cards.
  D. Restriction of access hours.
  B. Two-level authentication.

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  Explanation

• Question 698:

  A firm in a fragmented industry must position itself by adopting a competitive strategy appropriate to the industry. 1hich of the following is most clearly a focus strategy?

  A. Specialization by product type.
  B. Backward integration.
  C. An emphasis on low overhead and low payroll.
  D. Development of formula facilities.
  A. Specialization by product type.

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  Explanation

  A focus strategy is directed at a buyer group, segment of the product line, or geographic area. Thus, the strategic target is narrow compared with an industry wide strategy designed to achieve cost leadership or product differentiation. Specialization by product type or segment is a focus strategy. This focus may enhance bargaining power with suppliers. It may also increase differentiation because of the perceived expertise and image. The downside is reduced growth opportunities.

• Question 699:

  Which of the following is used during all three stages of project management?

  A. Earned Value Management (EVM).
  B. Organizational procedures.
  C. Performance measurement.
  D. Project Management Information System (PMIS).
  D. Project Management Information System (PMIS).

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  Explanation

  Comprehensive and Detailed In-Depth Explanation:

  A Project Management Information System (PMIS) is a centralized tool used throughout a project's planning, execution, and monitoring phases. It helps track schedules, costs, and risks.

  Option A (EVM) - Used primarily in monitoring and control phases, not all three.

  Option B (Organizational procedures) - Provides guidance but is not actively used in all project phases.

  Option C (Performance measurement) - Important in monitoring, but not central to planning or execution.

  Since PMIS is used throughout the project lifecycle, Option D is correct.

  IIA Project Management - Toolsand; Techniques

• Question 700:

  The project charter is an output from which of the following?

  A. Scope planning
  B. Scope definition
  C. Scope verification
  D. Project initiation
  D. Project initiation

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  Explanation