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IIA-CIA-Part3 Practice Questions

Internal Audit Function

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Total Questions : 514

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Question # 106

If an organization has a high amount of working capital compared to the industry average, which of the following is most likely true?

Options:

A.  

Settlement of short-term obligations may become difficult.

B.  

Cash may be bed up in items not generating financial value.

C.  

Collection policies of the organization are ineffective.

D.  

The organization is efficient in using assets to generate revenue.

Discussion 0
Question # 107

An internal auditor considers the financial statement of an organization as part of a financial assurance engagement. The auditor expresses the organization's electricity and depreciation expenses as a percentage of revenue to be 10% and 7% respectively. Which of the following techniques was used by the internal auditor In this calculation?

Options:

A.  

Horizontal analysis

B.  

Vertical analysis

C.  

Ratio analysis

D.  

Trend analysis

Discussion 0
Question # 108

Which of the following controls would be the most effective in preventing the disclosure of an organization's confidential electronic information?

Options:

A.  

Nondisclosure agreements between the firm and its employees.

B.  

Logs of user activity within the information system.

C.  

Two-factor authentication for access into the information system.

D.  

limited access so information, based on employee duties

Discussion 0
Question # 109

An organization has 1,000 units of a defective item in stock. Per unit, market price is $10; production cost is $4; and the defect selling price is $5. What is the carrying amount (inventory value) of defects at year-end?

Options:

A.  

$0

B.  

$4,000

C.  

$5,000

D.  

$10,000

Discussion 0
Question # 110

An internal auditor observed that the organization's disaster recovery solution will make use of a cold site in a town several miles away. Which of the following is likely to be a characteristic of this disaster recovery solution?

Options:

A.  

Data is synchronized in real time.

B.  

Recovery time is expected to be less than one week.

C.  

Servers are not available and need to be procured.

D.  

Recovery resources and data restore processes have been defined.

Discussion 0
Question # 111

Which of the following describes a mechanistic organizational structure?

Options:

A.  

Primary direction of communication tends to be lateral.

B.  

Definition of assigned tasks tends to be broad and general.

C.  

Type of knowledge required tends to be broad and professional.

D.  

Reliance on self-control tends to be low.

Discussion 0
Question # 112

Which of the following is a limitation of the remote wipe for a smart device?

Options:

A.  

Encrypted data cannot be locked to prevent further access

B.  

Default settings cannot be restored on the device.

C.  

All data, cannot be completely removed from the device

D.  

Mobile device management software is required for successful remote wipe

Discussion 0
Question # 113

Which type of bond sells at a discount from face value, then increases in value annually until it reaches maturity and provides the owner with the total payoff?

Options:

A.  

High-yield bonds

B.  

Commodity-backed bonds

C.  

Zero-coupon bonds

D.  

Junk bonds

Discussion 0
Question # 114

During the second half of the audit year, the chief audit executive (CAE) identified significant negative variances to the approved audit budget required to complete the internal audit plan. Which of the following actions should the CAE take?

Options:

A.  

Revise the internal audit plan to reduce coverage of new strategic critical areas so that the approved budget can be met

B.  

Reduce the scope of the remainder of the engagements in the internal audit plan to reduce overall costs

C.  

Communicate to senior management and the board the risk of not being able to complete the audit plan

D.  

Continue to complete the plan regardless of the budget variances, as the audit function is invaluable to sound corporate governance

Discussion 0
Question # 115

For which of the following scenarios would the most recent backup of the human resources database be the best source of information to use?

Options:

A.  

An incorrect program fix was implemented just prior to the database backup.

B.  

The organization is preparing to train all employees on the new self-service benefits system.

C.  

There was a data center failure that requires restoring the system at the backup site.

D.  

There is a need to access prior year-end training reports for all employees in the human resources database

Discussion 0
Question # 116

Which of the following principles s shared by both hierarchies and open organizational structures?

1. A superior can delegate the authority to make decisions but cannot delegate the ultimate responsibility for the results of those decisions.

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

3. Responsibility should be accompanied by adequate authority.

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

Options:

A.  

1 and 3 only

B.  

1 and 4 only

C.  

2 and 3 only

D.  

3 and 4 only

Discussion 0
Question # 117

A retail organization mistakenly did not include $10,000 of inventory in the physical count at the end of the year. What was the impact to the organization’s financial statements?

Options:

A.  

Cost of sales and net income are understated

B.  

Cost of sales and net income are overstated

C.  

Cost of sales is understated and net income is overstated

D.  

Cost of sales is overstated and net income is understated

Discussion 0
Question # 118

Which of the following best describes owner's equity?

Options:

A.  

Assets minus liabilities.

B.  

Total assets.

C.  

Total liabilities.

D.  

Owners contribution plus drawings.

Discussion 0
Question # 119

Which of the following controls refers to requiring employees to use a combination of PINs, passwords, and/or biometrics to access an organization's smart device apps and data?

Options:

A.  

Remote wipe.

B.  

Software encryption.

C.  

Device encryption.

D.  

Authentication.

Discussion 0
Question # 120

An organization's board of directors is particularly focused on positioning, the organization as a leader in the industry and beating the competition. Which of the following strategies offers the greatest alignment with the board's focus?

Options:

A.  

Divesting product lines expected to have negative profitability.

B.  

Increasing the diversity of strategic business units.

C.  

Increasing investment in research and development for a new product.

D.  

Relocating the organization's manufacturing to another country.

Discussion 0
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