Questions for the IIA CIA PART3 3P were updated on : Jul 20 ,2024
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Question 1
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.
Answer:
A
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Question 2
An internal auditor performed a review of IT outsourcing and found that the service provider was failing to meet the terms of the service level agreement. Which of the following approaches is most appropriate to address this concern?
A. The organization should review the skill requirements and ensure that the service provider is maintaining sufficient expertise and retaining skilled resources.
B. The organization should proactively monitor the performance of the service provider, escalate concerns, and use penalty clauses in the contract where necessary.
C. The organization should ensure that there is a clear management communication strategy and path for evaluating and reporting on all outsourced services concerns.
D. The organization should work with the service provider to review the current agreement and expectations relating to objectives, processes, and overall performance.
Answer:
B
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Question 3
Which of the following is a strategy that organizations can use to stimulate innovation? 1) Source from the most advanced suppliers. 2) Establish employee programs that reward initiative. 3) Identify best practice competitors as motivators. 4) Ensure that performance targets are always achieved.
A. 1 and 3 only
B. 2 and 4 only
C. 1, 2, and 3 only
D. 1, 2, 3, and 4
Answer:
C
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Question 4
Which of the following conditions could lead an organization to enter into a new business through internal development rather than through acquisition?
A. It is expected that there will be slow retaliation from incumbents.
B. The acquiring organization has information that the selling organization is weak.
C. The number of bidders to acquire the organization for sale is low.
D. The condition of the economy is poor.
Answer:
A
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Question 5
Which of the following statements regarding program change management is not correct?
A. The goal of the change management process is to sustain and improve organizational operations.
B. The degree of risk associated with a proposed change determines if the change request requires authorization.
C. In order to protect the production environment, changes must be managed in a repeatable, defined, and predictable manner.
D. All changes should be tested in a non-production environment before migrating to the production environment.
Answer:
B
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Question 6
Which of the following is a limiting factor for capacity expansion?
A. Government pressure on organizations to increase or maintain employment.
B. Production orientation of management.
C. Lack of credible market leader in the industry.
D. Company diversification.
Answer:
D
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Question 7
The first step in determining product price is:
A. Determining the cost of the product.
B. Developing pricing objectives.
C. Evaluating prices set by the competitors.
D. Selecting a pricing method.
Answer:
B
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Question 8
All of the following are true with regard to the first-in, first-out inventory valuation method except:
A. It values inventory close to current replacement cost.
B. It generates the highest profit when prices are rising.
C. It approximates the physical flow of goods.
D. It minimizes current-period income taxes.
Answer:
D
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Question 9
When writing a business memorandum, the writer should choose a writing style that achieves all of the following except:
A. Draws positive attention to the writing style.
B. Treats all receivers with respect.
C. Suits the method of presentation and delivery.
D. Develops ideas without overstatement.
Answer:
A
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Question 10
Which of the following is a characteristic of just-in-time inventory management systems?
A. Users determine the optimal level of safety stocks.
B. They are applicable only to large organizations.
C. They do not really increase overall economic efficiency because they merely shift inventory levels further up the supply chain.
D. They rely heavily on high quality materials.
Answer:
D
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Question 11
Which of the following would provide the most relevant assurance that the application under development will provide maximum value to the organization?
A. Use of a formal systems development lifecycle.
B. End-user involvement.
C. Adequate software documentation.
D. Formalized non-regression testing phase.
Answer:
B
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Question 12
Which of the following statements is true regarding outsourced business processes?
A. Outsourced business processes should not be considered in the internal audit universe because the controls are owned by the external service provider.
B. Generally, independence is improved when the internal audit activity reviews outsourced business processes.
C. The key controls of outsourced business processes typically are more difficult to audit because they are designed and managed externally.
D. The system of internal controls may be better and more efficient when the business process is outsourced compared to internally sourced.
Answer:
D
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Question 13
Which stage in the industry life cycle is characterized by many different product variations?
A. Introduction.
B. Growth.
C. Maturity.
D. Decline.
Answer:
A
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Question 14
A brand manager in a consumer food products organization suspected that several days of the point- of-sale data on the spreadsheet from one grocery chain were missing. The best approach for detecting missing rows in spreadsheet data would be to:
A. Sort on product identification code and identify missing product identification codes.
B. Review store identification code and identify missing product identification codes.
C. Compare product identification codes for consecutive periods.
D. Compare product identification codes by store for consecutive periods.
Answer:
D
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Question 15
An organization's balance sheet indicates that the total asset amount and the total capital stock amount remained unchanged from one year to the next, and no dividends were declared or paid. However, the organization reported a loss of $200,000. Which of the following describes the most likely year-over-year change to the organization's total liabilities and total stockholder equity?
A. The total liabilities and total stockholder equity both increased.
B. The total liabilities and total stockholder equity both decreased.
C. The total liabilities decreased, and the total stockholder equity increased.
D. The total liabilities increased, and the total stockholder equity decreased.