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

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 741:

  How do data analysis technologies affect internal audit testing?

  A. They improve the effectiveness of spot check testing techniques.
  B. They allow greater insight into high risk areas.
  C. They reduce the overall scope of the audit engagement.
  D. They increase the internal auditor's objectivity.
  B. They allow greater insight into high risk areas.

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  Explanation

• Question 742:

  Developing brand equity in a foreign market may be desirable but is subject to considerable risk. A global firm launching a new product in a new market most likely should

  A. Initially place most of the firm's emphasis on advertising geared to the local culture.
  B. Fully decentralize control of the marketing process.
  C. Avoid creating partnerships with local distribution channels to avoid dilution of the brand.
  D. Balance standardization and customization of the product.
  D. Balance standardization and customization of the product.

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  Explanation

  The firm should determine the ratio of standardization and customization. Products that can be sold virtually unchanged throughout several markets provide a greater profit opportunity for a global firm. However, cultural differences may require extensive customization to appeal to markets in different countries.

• Question 743:

  A multinational organization has multiple divisions that sell their products internally to other divisions.

  When selling internally, which of the following transfer prices would lead to the best decisions for the organization?

  A. Full cost
  B. Full cost plus a markup.
  C. Market price of the product
  D. Variable cost plus a markup
  C. Market price of the product

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  Explanation

• Question 744:

  Which of the following attributes of data analytics relates to the growing number of sources from which data is being generated?

  A. Volume
  B. Velocity
  C. Variety
  D. Veracity
  C. Variety

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  Explanation

• Question 745:

  Which statement is true regarding the development of a risk-based internal audit plan?

  A. It requires a previously conducted assurance engagement on the organization's risk management maturity
  B. It requires an assessment by the internal audit function of key risks identified within the organization's risk management system
  C. It requires that at least 90% of planned engagements address areas critical to the organization's strategy
  D. It requires that an organization adheres to a well-recognized risk management framework in order to identify and manage its risks
  B. It requires an assessment by the internal audit function of key risks identified within the organization's risk management system

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  Explanation

  A risk-based audit plan must be aligned with the organization's objectives and risk management system. According to the Standards, the CAE must consider the organization's risk management framework and assess key risks to develop the

  plan. A maturity review (Option A) is not a prerequisite, nor is a mandated percentage of strategic coverage (Option C). Option D is incorrect because an organization does not need to follow a specific external framework to develop a risk-

  based plan; internal risk identification suffices.

  IIA Standards - Standard 2010: Planning; Implementation Guide 2010.

• Question 746:

  Which of the following principles are common to both hierarchical and open organizational structures?

  1. Employees at all levels should be empowered to make decisions.

  2. A supervisor's span of control should not exceed seven subordinates.

  3. Responsibility should be accompanied by adequate authority.

  4. A superior cannot delegate the ultimate responsibility for results.

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

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  Explanation

• Question 747:

  Modern management theory devotes considerable attention to employee empowerment. Done appropriately, employee empowerment:

  A. Increases managerial power.
  B. Means lack of control.
  C. Is independent of compensation.
  D. Does not require full employee participation in decision making.
  A. Increases managerial power.

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  Explanation

  Modern management theory emphasizes employee empowerment. The question is not whether employees should be empowered, but the circumstances in which it should occur. The paradox isthat managers who appropriately surrender power by empowering employees actually gain power. They have an increased ability to achieve desired results.

• Question 748:

  Which of the following is a typical activity performed by the help desk?

  A. Monitoring the network
  B. Troubleshooting
  C. Backing up data
  D. Assigning authorizations to a user, a role, or profile
  B. Troubleshooting

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  Explanation

  IIA Business Knowledge for Internal Auditing, Help Desk Functions section.

• Question 749:

  Which of the following options correctly defines a transmission control protocol/Internet protocol (TCP/IP)?

  A. System software that acts as an interface between a user and a computer.
  B. A standardized set of guidelines that facilitates communication between computers on different networks.
  C. System software that translates hypertext markup language to allow users to view a remote webpage.
  D. A network of servers used to control a variety of mission-critical operations.
  B. A standardized set of guidelines that facilitates communication between computers on different networks.

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  Explanation

• Question 750:

  As an organization increases the number of employees, its structure becomes more complex. Rules become more formalized and more supervisors are hired to direct the increased numbers of subordinates. What is the nature of the size-structure relationship?

  A. The size-structure relationship is linear.
  B. The structure becomes fixed once an organization attains a level of about 200 employees.
  C. The size-structure relationship is concave.
  D. None of the answers are correct.
  D. None of the answers are correct.

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  Explanation

  As an organization increases in size, its structure tends to become more formal and mechanistic. More policies and procedures are necessary to coordinate the increased number of employees, and more managers must be hired. However, the relationship between size and changes in structure is linear only within a certain range. For example, adding 100 employees to a company with 100 employees is likely to cause significant structural change, but adding the same numberto a workforce of 10,000 is unlikely to have little impact. By the time a company reaches a certain size 1,500 to 2,000 or more), it usually has most of the qualities of a mechanistic structure.