Free CIA Exam Part Three: Business Knowledge for Internal Auditing Exam IIA-CIA-Part3-3P Exam Practice Test

With regard to project management when of the following statements about prefect crashing is true?

• It leads to an increase in risk and often results in rework
• It is an optimization technique where activities are performed in parallel rather than sequentially
• It involves a revaluation of protect requirements and/or scope.
• It is a compression technique in which resources are added to the protect

According to Porter, which of the following is associated with fragmented industries?

• Weak entrance barriers.
• Significant scale economies.
• Steep experience curve.
• Strong negotiation power with suppliers.

What would be the effect if an organization paid one of its liabilities twice during the year in error?

• Assets liabilities and owners' equity would be understated
• Assets net income and owners' equity would be unaffected
• Assets and liabilities would be understated
• Assets net income and owners' equity would be understated, but liabilities would be overstated

Which of the following statements is true regarding reversing entries in an accounting cycled

• Reversing all previous closing adjustments is a mandatory step in the accounting cycle
• Reversing entries should be completed at the end of the next accounting period after recording regular transactions of the period
• Reversing entries are identical to the adjusting entries made in the previous period.
• Reversing entries are the exact opposite of the adjustments made in the previous period.

Division A produces a product with a variable cost of $5 per unit and an allocated fixed cost of $3 per unit The market price of the product is $15 plus 20% selling cost. Division B currently purchases this product from an external supplier but is going to purchase it from division A for $18 Which of the following methods of transfer pricing is being used?

• Market price.
• Negotiation-based.
• Full absorption cost
• Variable cost

Which of the following statements is true regarding cybersecurity risk?

• Cybersecurity risks are identical across all organizations regardless of industry
• Installation of antivirus and malware software prevents cybersecurity risks
• Deployment of proper cybersecurity measures assures business success
• Information value extends the emergence of cybersecurity risks

Which of the following statements is correct regarding risk analysis?

• The extent to which management judgments are required in an area could serve as a risk factor in assisting the auditor in making a comparative risk analysis.
• The highest risk assessment should always be assigned to the area with the largest potential loss.
• The highest risk assessment should always be assigned to the area with the highest probability of occurrence.
• Risk analysis must be reduced to quantitative terms in order to provide meaningful comparisons across an organization.

Which of the following would provide the most relevant assurance that the application under development will provide maximum value to the organization?

• Use of a formal systems development lifecycle.
• End-user involvement.
• Adequate software documentation.
• Formalized non-regression testing phase.

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:

• Sort on product identification code and identify missing product identification codes.
• Review store identification code and identify missing product identification codes.
• Compare product identification codes for consecutive periods.
• Compare product identification codes by store for consecutive periods.

When would a contract be closed out?

• When there's a dispute between the contracting parties.
• When all contractual obligations have been discharged.
• When there is a force majeure.
• When the termination clause is enacted.