IIA-CIA-Part3 Questions Pass on Your First Attempt Dumps for Certified Internal Certified
IIA-CIA-Part3 Practice Test Pdf Exam Material
NEW QUESTION # 125
The economic order quantity can be calculated using the following formula:
Which of the following describes how the optimal order size will change if the annual demand increases by 36 percent?
- A. Decrease by about 17 percent.
- B. Increase by about 17 percent.
- C. Increase by about 7 percent.
- D. Decrease by about 7 percent.
Answer: B
NEW QUESTION # 126
According to IIA guidance, which of the following statements is true regarding penetration testing?
- A. Testing should take place during heavy operational time periods to test system resilience.
- B. Testing should address the preventive controls and management's response.
- C. Testing should not be announced to anyone within the organization to solicit a real-life response.
- D. Testing should be wide in scope and primarily address detective management controls for identifying potential attacks.
Answer: A
NEW QUESTION # 127
Countries X and Y both have freely floating exchange rate systems and an active trading relationship. If incomes [List A] in country X while all other factors remain unchanged, then the currency of country X will tend to [List B] relative to the currency of country Y.
- A. Fall
Depreciate - B. Remain constant
Appreciate - C. List A
List B - D. Rise
Remain constant
Rise
Depreciate
Answer: D
NEW QUESTION # 128
Which of the following budgets must be prepared first?
- A. Production budget.
- B. Sales budget.
- C. Cash budget.
- D. Selling and administrative expenses budget.
Answer: B
NEW QUESTION # 129
in which of the following technical infrastructure audits should attention be turned to physical security and environmental controls?
- A. Operating systems review
- B. Network configuration review
- C. Data center review
- D. Database review
Answer: C
NEW QUESTION # 130
Which of the following is not true about simu-lation models?
- A. They emulate stochastic systems.
- B. They mathematically estimate what actual performance would be.
- C. They are deterministic in nature.
- D. The may involve sampling.
Answer: C
Explanation:
Simulation is a technique for experimenting with logical/mathematical models using a computer. The simulation procedure has five steps: define the objectives, formulate the model, validate the model, design the experiment, and conduct the simulation and evaluate the results. A simulation uses the laws of probability to generate values for random variables.
Thus, simulation models are probabilistic, not deterministic.
NEW QUESTION # 131
A company's financial balance sheet is presented below:
The company has net working capital of:
- A. $490
- B. $350
- C. $210
- D. $160
Answer: C
NEW QUESTION # 132
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. The purchasing department has more negotiating power than the selling department.
- B. The selling department operates at 50 percent of its capacity.
- C. There is no external market for that service.
- D. There is an external market for that service.
Answer: D
NEW QUESTION # 133
During the past few years, Wilder Company has experienced the following average number of power outages:
Each power outage results in out-of-pocket costs of US $800. For US $1.000 per month, Wilder can lease a generator to provide power during outages. If Wilder leases a generator in the coming year, the estimated savings (or additional expense) for the year will be:
- A. US$3,200
- B. US $(15,200)
- C. US$7,200
- D. US $(1,267)
Answer: A
Explanation:
Each outage costs US $800, but this expense can be avoided by paying US $1,000 per month (US $12,000 for the year). The expected-value approach uses the probability distribution derived from past experience to determine the average expected outages per month.
NEW QUESTION # 134
The efficient markets theory implies that securities prices are:
- A. Fair and a reflection of all publicly available information.
- B. Not the best benchmark for corporate financial decisions
- C. Not a good estimate of future cash flows.
- D. Always less than their fair value.
Answer: A
Explanation:
The efficient markets theory proposes that the market is continuously adjusting to new information and acting to correct pricing errors.
NEW QUESTION # 135
What is the primary risk associated with an organization adopting a decentralized structure?
- A. Lack of resilience.
- B. Inability to adapt.
- C. Greater costs of control function.
- D. Inconsistency in decision making.
Answer: D
NEW QUESTION # 136
Which of the following is an element of effective negotiating?
- A. Considering a few select choices during the settlement phase.
- B. Basing the agreement on negotiating power and positioning leverage.
- C. Focusing on interests rather than on obtaining a winning position.
- D. Ensuring that the other party has a personal stake in the agreement.
Answer: C
NEW QUESTION # 137
An entity experienced sales of US $5 billion, profit before interest and taxes of US $200 million, profit before taxes of US $100 million, and profit of US $70 million. Based on this information and the entity's balance sheet information in Exhibit A. the return on equity ROE is: \
- A. 13.33%
- B. 4.67%
- C. 6.67%
- D. 14%
Answer: B
Explanation:
The return on equity equals profit US $70,000,000) divided by equity $500,000,000) ordinary shares / $1,000,000,000 retained earnings).
NEW QUESTION # 138
If electronic funds transfer EFT) is used to pay vendor invoices, which of the following computer-assisted audit procedures would an auditor use to determine if any payments were made twice?
I. Testing of EFT transactions for reasonableness.
II. Identification of EFT transactions to the same vendor for the same dollar amount.
III. Extraction of EFT transactions with unauthorized vendor codes.
IV.
Searching for EFT transactions with duplicate purchase order numbers.
- A. III and IV only.
- B. I and II only.
- C. II and Ill only.
- D. I and IV only.
Answer: D
Explanation:
EFT is a service provided by financial institutions worldwide that is based on EDI technology. EFT transaction costs are lower than for manual systems because documents and human intervention are eliminated from the transactions process.
Inaccurate transaction processing including duplication) is a risk specific to EFT. Thus, an auditor should 1) review transactions with the same vendor for the same amount and 2) search for transactions with duplicate purchase order numbers. However, selection of transactions with unauthorized vendor codes and testing of transactions for reasonableness do not identify duplicate payments.
NEW QUESTION # 139
Which of the following are likely indicators of ineffective change management?
1. IT management is unable to predict how a change will impact interdependent systems or business processes.
2. There have been significant increases in trouble calls or in support hours logged by programmers.
3. There is a lack of turnover in the systems support and business analyst development groups.
4. Emergency changes that bypass the normal control process frequently are deemed necessary.
- A. 1, 2, and 4 only
- B. 1, 2, 3, and 4
- C. 2 and 4 only
- D. 1 and 3 only
Answer: A
NEW QUESTION # 140
A bank is developing a computer system to help evaluate loan applications. The information systems IS staff interview the bank's mortgage underwriters to extract their knowledge and decision processes for input into the computer system. The completed system should be able to process information the same as do the underwriters and make final recommendations regarding loan decisions. This approach is called:
- A. A neural network.
- B. An expert system.
- C. An intelligent agent.
- D. Fuzzy logic.
Answer: B
Explanation:
An expert system is a knowledge-intensive computer program that captures the expertise of a human in limited domains of knowledge.
NEW QUESTION # 141
No derivative financial instruments that have1) fixed or determinable payments, 2 a fixed maturity, and3) are held by the investing entity with a positive intent and ability to hold until maturity are what category of financial instruments?
- A. Fair value hedges.
- B. Held-to-maturity investments.
- C. Available-for-sale financial assets.
- D. Financial assets or liabilities held for trading.
Answer: B
Explanation:
Financial instruments are classified in three categories. Held-to-maturity investments are No derivatives that have fixed or determinable payments and a fixed maturity. The entity must have a positive intent and ability to hold such investments to maturity. The other categories are financial assets or liabilities held for trading and available-for-sale financial assets.
NEW QUESTION # 142
While auditing a marketing department, the internal auditor discovered that the product life cycle model was used to structure the marketing mix.
The manager has asked the auditor for advice about increasing advertising of various products. During which stage of the life cycle would it be appropriate to advertise that the company's product is the lowest price and best quality of all competitors?
- A. Maturity stage.
- B. Introduction stage.
- C. Decline stage.
- D. Growth stage.
Answer: A
Explanation:
The maturity stage is the ideal time for advertising lower prices and superior quality because this is the period during a product's life when competition is greatest. Due to the availability of many alternatives or substitutes, a firm has reasons to set itself apart. Because price and quality are both concerns of customers during the maturity stage, it is ideal for the firm to differentiate its product by advertising low prices and higher quality.
NEW QUESTION # 143
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