Latest [Jan 10, 2024] IIA-CIA-Part3 Exam Questions – Valid IIA-CIA-Part3 Dumps Pdf
IIA-CIA-Part3 Practice Test Questions Answers Updated 344 Questions
IIA-CIA-Part3 exam is designed to test candidates' knowledge and understanding of business concepts and their application in internal auditing. It covers topics such as business ethics, financial management, organizational structure, risk management, and governance. IIA-CIA-Part3 exam is divided into four sections, each with its own set of learning objectives and exam questions.
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The IIA CIA Exam has been created for the professionals who are willing to get the Certified Internal Auditor certificate. It is a detailed exam that has three parts and includes questions of different formats. Each part of the exam is aimed at finding out whether the applicants have mastered specific sets of knowledge, skills, and abilities in a particular domain. With the help of this certification, you can get a better job position and increase your salary.
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NEW QUESTION # 170
Assume that the enterprise reports cost of goods sold of US $200,000 and interest expense of US $10,000 for the current period. Also assume a 50% tax rate on corporate earnings. The final closing entry required to ensure that current earnings are incorporated into year-end retained earnings is:
- A. Income summary US $240,000 Retained earnings US $240.000
- B. Retained earnings US $280,000 Income summary US $280.000
- C. Retained earnings US $240,000 Income summary US $240.000
- D. Income summary US $140,000 Retained earnings US $140.000
Answer: D
Explanation:
Current period pretax net income equals US $280,000$750,000 sales - $200,000 CGS $60,000 depreciation - $10,000 interest - $200,000 administrative expenses. Thus, after tax net income credited to retained earnings equals US $140.000 [(10 - .5) x $280,000.
NEW QUESTION # 171
The main reason to establish internal controls in an organization is to:
- A. Encourage compliance with policies and procedures.
- B. Provide reasonable assurance on the achievement of objectives.
- C. Ensure the accuracy, reliability, and timeliness of information.
- D. Safeguard the resources of the organization.
Answer: B
NEW QUESTION # 172
Which of the following distinguishes the added-value negotiation method from traditional negotiating methods?
- A. Each negotiator minimizes the information provided to the other party.
- B. Each party's negotiator presents a menu of options to the other party.
- C. Each negotiator starts with an offer, which is optimal from the negotiator's perspective.
- D. Each party adopts one initial position from which to start.
Answer: B
NEW QUESTION # 173
Presented below is a cost-volume-profit chart for a firm. Various reference points are marked on the chart with letters.
The letters CEH on the chart represent the:
- A. Total sales.
- B. Area of the chart where total expenses exceed total sales
- C. Total expenses.
- D. Area of the chart where total sales exceed total expenses
Answer: D
Explanation:
A cost-volume-profit chart contains elements lines, points, axes) that identify variable cost, fixed cost, the breakeven point, total revenue, profit, and volume in units. When the total sales revenue line rises above the total expense line, a company will have positive net income.
NEW QUESTION # 174
Which one of the following will usually be accounted for by recognizing a provision?
- A. Just prior to the balance sheet date, the board decided b. close a division. No implementation steps have been taken.
- B. A law requires an airline to overhaul its aircraft once every 3 years.
- C. As of the balance sheet date, the board was aware that a new law would require the entity to fit smoke filters to its factories within the next year. No such filters have been fitted.
- D. Premiums offered to customers.
Answer: D
Explanation:
When premiums are offered to customers, for example, upon redemption of coupons the entity can usually establish that it has a legal present obligation resulting from a past event and that an outflow of economic benefits is probable. Furthermore, if the entity has prior experience with such offers or information about the experience of similar entities, a reliable estimate of the obligation should be feasible. If no obligating event has occurred, the entity could avoid the future expenditure by its future actions.
NEW QUESTION # 175
According to MA guidance on IT which of the following best describes a but recovery and restore processes have not been defined?
- A. Hot recovery plan
- B. Cold recovery plan.
- C. Warm recovery plan
- D. Absence of recovery plan
Answer: D
NEW QUESTION # 176
Which of the following security controls might prevent unauthorized access to sensitive data via an unattended workstation directly connected to a mainframe?
- A. Automatic log-off of inactive users.
- B. Use of a screen saver.
- C. Use of passwords to identify users.
- D. Encryption of data files.
Answer: A
Explanation:
Automatic log-off of inactive users is a utility that disconnects a workstation from the mainframe or server after a certain amount of time. Once the workstation has been disconnected, the user must log back into the system.
NEW QUESTION # 177
An organization was forced to stop production unexpectedly, as raw materials could not be delivered due to a military conflict in the region. Which of the following plans have most likely failed to support the organization?
- A. Just-in-time delivery plans.
- B. Standing plans.
- C. Backup plans.
- D. Contingency plans.
Answer: D
NEW QUESTION # 178
A measure that describes the risk of an investment project relative to other investments in general is the:
- A. Standard deviation.
- B. Expected return
- C. Coefficient of variation.
- D. Beta coefficient
Answer: D
Explanation:
The required rate of return on equity capital in the Capital Asset Pricing Model is the risk-free rate, plus the product of the market risk premium times the beta coefficient. The market risk premium is the amount above the risk-free rate that will induce investment in the market The beta coefficient of an individual share is the correlation between the volatility price variation) of the stock market and that of the price of the individual share. For example. if an individual share goes up 15% and the market only 10%. beta is 1.5.
NEW QUESTION # 179
The difference between the required rate of return on a given risky investment and that of a risk-free investment with the same expected return is the:
- A. Risk premium.
- B. Beta coefficient
- C. Coefficient of variation.
- D. Standard error of measurement.
Answer: A
Explanation:
The market risk premium RM - RF) is the amount above the risk-free rate required to include average investors to enter the market. The risk premium is the portion of expected return attributed to the increased risk.
NEW QUESTION # 180
Using absorption costing, the company's operating profit was:
- A. US $900,000 C US $975,000 D US $1,020,000
- B. US $750.000
Answer: A
Explanation:
Under absorption costing, product costs include fixed and variable manufacturing costs. The unit product cost under absorption costing is US $10 [ $600,000 + $400,000) 100,000 units produced]. All nonmanufacturing costs are expensed in the period incurred. Thus operating profit is US $900.000.
A company manufactures and sells a single product. Planned and actual production in its first year of operation was 100,000 units. Planned and actual costs for that year were as follow:
The company sold 85.000 units of product at a selling price of US $30 per unit.
NEW QUESTION # 181
Which of the following techniques would be best for evaluating the management performance of a department that is operated as a cost center?
- A. Payback method.
- B. Return on investment ratio.
- C. Variance analysis.
- D. Return on assets ratio.
Answer: C
Explanation:
A cost center is a responsibility center that is responsible for costs only. Of the alternatives given, variance analysis is the only one that can be used in a cost center.
Variance analysis involves comparing actual costs with predicted or standard costs.
NEW QUESTION # 182
Management of a bookkeeping company observed that the average time spent to perform identical tasks using a new software package decreases as the number of tasks performed increases. The following information on the use of the new software was collected.
If this learning effect continues, what is the average time to perform each of the first eight tasks?
- A. 6.56 minutes.
- B. 5.90 minutes.
- C. 7.29 minutes.
- D. 8.1 minutes.
Answer: C
Explanation:
Learning curves reflect the increased rate at which people perform tasks as they gain experience. The time required to perform a given task becomes progressively shorter. This technique is applicable only to the early stages of production or to any new task. One common assumption is that the cumulative average time per unit is reduced by a fixed percentage each time cumulative production is doubled. Based on the given data, this company has a 90% learning curve (90% x 10 minutes = 9 minutes. and 90% < 9 minutes = 8 1 minutes, Accordingly, the cumulative average time to perform eight tasks is 7 29 minutes (90% * 8.1 minutes).
NEW QUESTION # 183
During an audit of the organization's annual financial statements, the internal auditor notes that the current cost of goods sold percentage is substantially higher than in prior years. Which of the following is the most likely explanation for this increase?
- A. Process to manufacture goods is more efficient.
- B. Write-off of inventory is increasing.
- C. Labor productivity to produce goods is increasing.
- D. Cost of raw material inventory items is decreasing.
Answer: D
NEW QUESTION # 184
Physical distribution is the moving of finished products to:
- A. Consumers.
- B. Shipping point.
- C. Retail outlets.
- D. Warehouses.
Answer: A
Explanation:
Physical distribution is the efficient management of supply chains. It controls value-added flows from suppliers to consumers.
NEW QUESTION # 185
Which of the following statements is true regarding an organization's servers?
- A. Servers manage the interconnectivity of system hardware devices in the information system.
- B. Servers manage the data stored in databases residing on the information system.
- C. Servers optimize data processing by sharing it with other computers on the information system
- D. Servers enforce access controls between networks transmitting data on the information system
Answer: A
NEW QUESTION # 186
Which of the following is a product-oriented definition of a business rather than a market-oriented definition of a business?
- A. We are a people-and-goods mover.
- B. We supply energy.
- C. We make movies.
- D. We provide climate control in the home.
Answer: C
NEW QUESTION # 187
An internal auditor has been approved lo gather data directly horn the organization's relational database management system tor data analyse To collect the data which of the Wowing is most important for the auditor to know?
- A. Spreadsheet software such as Excel
- B. Structured query language
- C. Basic web development
- D. Data management system such as Oracle
Answer: B
NEW QUESTION # 188
Which of the following is an example of a physical control?
- A. Providing fire detection and suppression equipment
- B. Establishing a physical security policy and promoting it throughout the organization
- C. Keeping an offsite backup of the organization's critical data
- D. Performing business continuity and disaster recovery planning
Answer: A
NEW QUESTION # 189
Which of the following measures create the most restrictive barrier to exporting to a country?
- A. Quotas.
- B. Embargoes.
- C. Exchange controls.
- D. Tariffs
Answer: B
Explanation:
An embargo is a total ban on some kinds of imports. It is an extreme form of the import quota. Embargoes have the effect of totally excluding the exporting entity from selling in that country and are the most restrictive type of import/export law.
NEW QUESTION # 190
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