What Guaranteed IIA-CIA-Part3 Question Is

NEW QUESTION 1

The leadership of an organization encourages employees to form voluntary problem-solving groups whereby several employees from the same work area meet regularity during work hours to discuss improvements and creative ways to reduce costs. Which of the following best describes this approach?

• A. Open-book management
• B. Quality control circles
• C. Self-managed teams
• D. Cross-functional teams

Answer: C

NEW QUESTION 2

In which type of business environment are price cutting strategies and franchising strategies most appropriate?

• A. Embryonic, focused.
• B. Fragmented, decline.
• C. Mature, fragmented.
• D. Competitive, embryonic.

Answer: C

NEW QUESTION 3

Which of the following statements is true regarding partnership liquidation?

• A. Operations can continue after the liquidation if all partners agree
• B. Partnership liquidation ends both the legal and economic life of an entity
• C. Partnership liquidation occurs when there is capital deficiency
• D. When a partnership is liquidated, each partner pays creditors from cash received

Answer: B

NEW QUESTION 4

According to MA guidance, which of the following best describes an adequate management (audit) trail application control for the general ledger?

• A. Report identifying data that is outside of system parameters
• B. Report identifying general ledger transactions by time and individual
• C. Report comparing processing results with original input
• D. Report confirming that the general ledger data was processed without error.

Answer: B

NEW QUESTION 5

A capital investment project will have a higher net present value, everything else being equal, if it has:

• A. A higher initial investment level.
• B. A higher discount rate.
• C. Cash inflows that are larger in the later years of the life of the project.
• D. Cash inflows that are larger in the earlier years of the life of the project.

Answer: D

NEW QUESTION 6

The greatest advantage of functional departmentalization is that it:

• A. Facilitates communication between primary functions.
• B. Helps to focus on the achievement of organizational goals.
• C. Provides for efficient use of specialized knowledge .
• D. Accommodates geographically dispersed companies

Answer: C

NEW QUESTION 7

An internal auditor is investigating a potential fraudulent activity. What is the first test the auditor should perform on the transaction data under scrutiny?

• A. Digital analysis for statistically unlikely occurrences that may indicate system tampering.
• B. Verification of the completeness and integrity of the obtained data.
• C. Detailed review of the data contents to strategize the best analytical techniques.
• D. Calculation of statistical parameters to identify outliers requiring further scrutiny.

Answer: B

NEW QUESTION 8

Which of the following statements is correct regarding corporate compensation systems and related bonuses?
* 1. A bonus system should be considered part of the control environment of an organization and should be considered in formulating a report on internal control.
* 2. Compensation systems are not part of an organization's control system and should not be reported as such.
* 3. An audit of an organization's compensation system should be performed independently of an audit of the control system over other functions that impact corporate bonuses.

• A. 1 only
• B. 2 only
• C. 3 only
• D. 2 and 3 only

Answer: A

NEW QUESTION 9

While reviewing the contracts for a large city, the internal auditor learns that the organization contracted to perform trash collection is paid based on the number of bins emptied each week As a result, the city has minimal control over payments Which of the following actions should the auditor recommend to give the city greater control over payments?

• A. Change the contract so payment is based on the distances traveled by the contractor during collection.
• B. Renegotiate a lump-sum contract when the contract is up for renewal
• C. Assign a city employee to verify the number of bins emptied each day
• D. Require that the contractor provide supervisory review of the number of bins emptied each day

Answer: B

NEW QUESTION 10

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?
Determine whether previous incidents have been reported, managed, and resolved.
Determine whether a business contingency plan exists.
Determine the extent of transparency in reporting.
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

NEW QUESTION 11

With regard to disaster recovery planning, which of the following would most likely involve stakeholders from several departments?

• A. Determining the frequency with which backups will be performed.
• B. Prioritizing the order in which business systems would be restored.
• C. Assigning who in the IT department would be involved in the recovery procedures.
• D. Assessing the resources needed to meet the data recovery objectives

Answer: B

NEW QUESTION 12

Which of the following is an example of an application system control?

• A. Data values fall within a prescribed range.
• B. Error listings are generated and promptly remediated.
• C. Report distribution is restricted to authorized personnel.
• D. Field amounts contain an upper or lower limit.

Answer: A

NEW QUESTION 13

Which of the following is an example of an application control?

• A. Automated password change requirements
• B. System data backup process
• C. User testing of system changes
• D. Formatted data fields

Answer: D

NEW QUESTION 14

Which of the following statements regarding organizational governance is not correct?

• A. An effective internal audit function is one of the four cornerstones of good governance.
• B. Those performing governance activities are accountable to the customer.
• C. Accountability is one of the key elements of organizational governance.
• D. Governance principles and the need for an internal audit function are applicable to governmental and not-for-profit activities.

Answer: B

NEW QUESTION 15

An internal auditor is assigned to perform data analytics. Which of the following is the next step the auditor should undertake after she has ascertained the value expected from the review?

• A. Normalize the data
• B. Obtain the data
• C. identify the risks
• D. Analyze the data

Answer: D

NEW QUESTION 16

Which of the following engagement observations would provide the least motivation for management to amend or replace an existing cost accounting system?

• A. The distorted unit cost of a service is 50 percent lower than the true cost, while the true cost is 50 percent higher than the competition's cost.
• B. The organization is losing $1,000,000 annually because it incorrectly outsourced an operation based on information from its current system.
• C. The cost of rework, hidden by the current system, is 50 percent of the total cost of all services.
• D. 50 percent of total organizational cost has been allocated on a volume basis.

Answer: D

NEW QUESTION 17

The market price is the most appropriate transfer price to be charged by one department to another in the same organization for a service provided when:

• A. There is an external market for that service.
• B. The selling department operates at 50 percent of its capacity.
• C. The purchasing department has more negotiating power than the selling department.
• D. There is no external market for that service.

Answer: A

NEW QUESTION 18
......