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IIA-CIA-Part3 Practice Questions

Internal Audit Function

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Question # 211

An internal auditor found the following information while reviewing the monthly financial statements for a wholesaler of safety glasses: Opening inventory: 1,000 units at $2 per unit; Purchased: 5,000 units at $3 per unit; Sold: 3,000 units at $7 per unit. The cost of goods sold was reported at $8,500. Which of the following inventory methods was used to derive this value?

Options:

A.  

Average cost method

B.  

First-in, first-out (FIFO) method

C.  

Specific identification method

D.  

Activity-based costing method

Discussion 0
Question # 212

Which of the following controls is the most effective in mitigating activities of bots that continuously attempt to access a user’s account?

Options:

A.  

Password length.

B.  

User session timeout.

C.  

User account lockout.

D.  

Password aging.

Discussion 0
Question # 213

Which of the following job design techniques would most likely be used to increase employee motivation through job responsibility and recognition?

Options:

A.  

Job complicating

B.  

Job rotation

C.  

Job enrichment

D.  

Job enlargement

Discussion 0
Question # 214

Which of the following is most influenced by a retained earnings policy?

Options:

A.  

Cash.

B.  

Dividends.

C.  

Gross margin.

D.  

Net income.

Discussion 0
Question # 215

The internal audit function conducted an engagement on maintenance operations of a construction organization and identified several issues of medium importance. The head of maintenance proposed an improvement plan with deadlines and personnel responsible. The internal audit function issued the final report to senior management. Senior management was dissatisfied with the report as they believed that improvement plan deadlines should be considerably shorter. Which of the following should the internal audit function change in the reporting process?

Options:

A.  

Discontinue discussing draft reports with responsible employees, as their input is needed during fieldwork only

B.  

Involve senior management at the draft report stage and in the development of action plans

C.  

Request senior management to issue a separate memo regarding their changes to deadlines

D.  

Invite senior management to the board meeting regarding engagement results so that they can express their concerns

Discussion 0
Question # 216

Which of the following statements is true regarding the management-by-objectives method?

Options:

A.  

Management by objectives is most helpful in organizations that have rapid changes.

B.  

Management by objectives is most helpful in mechanistic organizations with rigidly defined tasks.

C.  

Management by objectives helps organizations to keep employees motivated.

D.  

Management by objectives helps organizations to distinguish clearly strategic goals from operational goals.

Discussion 0
Question # 217

A clothing company sells shirts for $8 per shirt. In order to break even, the company must sell 25.000 shirts. Actual sales total S300.000. What is margin of safety sales for the company?

Options:

A.  

$100.000

B.  

$200,000

C.  

$275,000

D.  

$500,000

Discussion 0
Question # 218

A supervisor receives a complaint from an employee who is frustrated about having to learn a new software program. The supervisor responds that the new software will enable the employee to work more efficiently and with greater accuracy. This response is an example of:

Options:

A.  

Empathetic listening.

B.  

Reframing.

C.  

Reflective listening.

D.  

Dialogue.

Discussion 0
Question # 219

Which of the following accurately describes the proper order of steps for an internal auditor to use when analyzing data?

Options:

A.  

Obtain the data, clean and normalize the data, define the question, analyze the data.

B.  

Define the question, obtain the data, analyze the data, clean and normalize the data.

C.  

Define the question, obtain the data, clean and normalize the data, analyze the data.

D.  

Obtain the data, analyze the data, clean and normalize the data, define the question.

Discussion 0
Question # 220

Which of the following would be a concern related to the authorization controls utilized for a system?

Options:

A.  

Users can only see certain screens in the system.

B.  

Users are making frequent password change requests.

C.  

Users Input Incorrect passwords and get denied system access

D.  

Users are all permitted uniform access to the system.

Discussion 0
Question # 221

Which of the following practices circumvents administrative restrictions on smart devices, thereby increasing data security risks?

Options:

A.  

Rooting.

B.  

Eavesdropping.

C.  

Man in the middle.

D.  

Session hijacking.

Discussion 0
Question # 222

When executive compensation is based on the organization ' s financial results, which of the following situations is most likely to arise?

Options:

A.  

The organization reports inappropriate estimates and accruals due to poof accounting controls.

B.  

The organization uses an unreliable process forgathering and reporting executive compensation data.

C.  

The organization experiences increasing discontent of employees, if executives are eligible for compensation amounts that are deemed unreasonable.

D.  

The organization encourages employee behavior that is inconsistent with the interests of relevant stakeholders.

Discussion 0
Question # 223

According to IIA guidance, whose input must be considered when developing the annual internal audit plan?

Options:

A.  

Operational management

B.  

External auditors

C.  

The CEO

D.  

Internal assurance providers

Discussion 0
Question # 224

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

Options:

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.

Discussion 0
Question # 225

Which of the following controls is the most effective for ensuring confidentially of transmitted information?

Options:

A.  

Firewall.

B.  

Antivirus software.

C.  

Passwords.

D.  

Encryption.

Discussion 0
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