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

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 951:

  The information flow factor that may lead to overbuilding in an industry is:

  A. The desire of firms able to add capacity to improve market share.
  B. The lack of a credible market leader.
  C. Effective market signaling.
  D. Management's expression of optimism to the financial community.
  D. Management's expression of optimism to the financial community.

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  Explanation

  The financial community plays a role in overbuilding when analysts criticize firms that have not expanded. Also, management's optimistic comments to the financial community may be taken as aggressive signals by competitors.

• Question 952:

  Which of the following data analytics tools would be applied by an internal audit activity positioned at the lowest level of maturity?

  A. Workflow and data capture technology
  B. Data visualization applications.
  C. Software integrated with central data warehouse
  D. Spreadsheets.
  D. Spreadsheets.

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  Explanation

• Question 953:

  An internationally recognized brand name is an entrance barrier to new competitors because new competitors would:

  A. Have to initiate a price war in order to enter the industry.
  B. Face increased production costs.
  C. Face increased marketing costs.
  D. Face higher learning costs, which would increase fixed costs.
  C. Face increased marketing costs.

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  Explanation

• Question 954:

  According to IIA guidance, which of the following would be the best first step to manage risk when a third party is overseeing the organization's network and data?

  A. Creating a comprehensive reporting system for vendors to demonstrate their ongoing due diligence in network operations.
  B. Drafting a strong contract that requires regular vendor control reports and a right-to-audit clause.
  C. Applying administrative privileges to ensure right-to-access controls are appropriate.
  D. Creating a standing cybersecurity committee to identify and manage risks related to data security.
  B. Drafting a strong contract that requires regular vendor control reports and a right-to-audit clause.

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  Explanation

• Question 955:

  A new clerk in the managerial accounting department applied the high-low method and computed the difference between the high and low levels of maintenance costs. Which type of maintenance costs did the clerk determine?

  A. Fixed maintenance costs.
  B. Variable maintenance costs.
  C. Mixed maintenance costs.
  D. Indirect maintenance costs.
  B. Variable maintenance costs.

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  Explanation

• Question 956:

  New data privacy laws require an organization to use collected customer information for me sole purpose of meeting the organization's business requirements.

  Which of the following best addresses the risk of the organization not complying with this objective?

  A. Provide training on social engineering attacks
  B. Encrypt the customer information retained by the organization
  C. Establish policies that discipline those who misuse customer information
  D. Allocate access profiles for each end user of the information
  B. Encrypt the customer information retained by the organization

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  Explanation

• Question 957:

  Which of the following are conditions for a successful mentoring relationship?

  A. The relationship should be aimed at improvement of the mentee. II. The relationship should be based on growth of the mentee. III. The pairing of mentor and mentee should be voluntary. IV. Mentoring requires a positive work environment.
  B. I and II only.
  C. III and IV only.
  D. I, II, and Ill only.
  E. I, II, Ill, and IV.
  C. III and IV only.

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  Explanation

  Mentoring is systematic development of leadership by providing career counseling and social nurturing. According to Abraham Zaleznick, it requires intensive tutoring, coaching, and guidance. Some organizations have formal mentoring programs that assign mentors to junior employees. However, some research indicates that a mentoring arrangement that occurs informally may have better results. Moreover, mentoring serves both career and psychosocial functions. Thus, goals should include improved job performance and career potential, with growth, not creating dependency, as the desired outcome. However, mentoring can be helpful in any work environment.

• Question 958:

  Organization X owns a 38 percent equity stake in Organization Y.

  Which of the following statements is true regarding the financial treatment for this relationship?

  A. Y should be listed as an investment asset on X's balance sheet
  B. X must consolidate the financial statements for both organizations
  C. Y should be reported as a footnote to X's financial statements
  D. Y should not be reported by X as X does not have a controlling interest
  A. Y should be listed as an investment asset on X's balance sheet

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  Explanation

• Question 959:

  Which of the following must be adjusted to index a progressive tax system to inflation?

  A. Tax deductions, exemptions, and tax filings.
  B. Tax deductions, exemptions, and tax brackets.
  C. Tax brackets, tax deductions, and tax payments.
  D. Tax brackets, exemptions, and nominal tax receipts.
  B. Tax deductions, exemptions, and tax brackets.

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  Explanation

• Question 960:

  Which of the following is the best indicator of the effectiveness of a communication on a receiver?

  A. Understanding of message received.
  B. Clarity of message.
  C. Change in receiver's attitude.
  D. Change in receiver's behavior.
  D. Change in receiver's behavior.

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  Explanation

  The best indicator of the effectiveness of a communication on the receiver is the change in the receiver's behavior in the direction requested or required by the communication. The sender has the responsibility to solicit feedback or observe results) to determine the communication's effectiveness.