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

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Total 488 questions

According to IIA guidance, which of the following corporate social responsibility (CSR) evaluation activities may be performed by the internal audit activity?

1) Consult on CSR program design and implementation.

2) Serve as an advisor on CSR governance and risk management.

3) Review third parties for contractual compliance with CSR terms.

4) Identify and mitigate risks to help meet the CSR program objectives.

A.

1, 2, and 3

B.

1, 2, and 4

C.

1, 3, and 4

D.

2, 3, and 4

Which of the following describes the result if an organization records merchandise as a purchase, but fails to include it in the closing inventory count?

A.

The cost of goods sold for the period will be understated.

B.

The cost of goods sold for the period will be overstated.

C.

The net income for the period will be understated.

D.

There will be no effect on the cost of goods sold or the net income for the period.

According to the International Professional Practices Framework, which of the following statements is true regarding a corporate social responsibility (CSR) program?

1) Every employee generally has a responsibility for ensuring the success of CSR objectives.

2) The board has overall responsibility for the effectiveness of internal control processes associated with CSR.

3) Public reporting on the CSR governance process is expected.

4) Organizations generally have flexibility regarding what is included in a CSR program.

A.

1, 2, and 3 only

B.

1, 2, and 4 only

C.

1, 3, and 4 only

D.

2, 3, and 4 only

When writing a business memorandum, the writer should choose a writing style that achieves all of the following except:

A.

Draws positive attention to the writing style.

B.

Treats all receivers with respect.

C.

Suits the method of presentation and delivery.

D.

Develops ideas without overstatement.

The first stage in the development of a crisis management program is to:

A.

Formulate contingency plans.

B.

Conduct a risk analysis.

C.

Create a crisis management team.

D.

Practice the response to a crisis.

International marketing activities often begin with:

A.

Standardization.

B.

Global marketing.

C.

Limited exporting.

D.

Domestic marketing.

At what point during the systems development process should an internal auditor verify that the new application's connectivity to the organization's other systems has been established correctly?

A.

Prior to testing the new application.

B.

During testing of the new application.

C.

During implementation of the new application.

D.

During maintenance of the new application.

A holding company set up a centralized group technology department, using a local area network with a mainframe computer to process accounting information for all companies within the group. An internal auditor would expect to find all of the following controls within the technology department except:

A.

Adequate segregation of duties between data processing controls and file security controls.

B.

Documented procedures for remote job entry and for local data file retention.

C.

Emergency and disaster recovery procedures and maintenance agreements in place to ensure continuity of operations.

D.

Established procedures to prevent and detect unauthorized changes to data files.

A chief audit executive (CAE) was asked to participate in the selection of an external auditor. Which of the following would not be a typical responsibility for the CAE?

A.

Evaluate the proposed external auditor fee.

B.

Recommend criteria to be used in the selection process.

C.

Develop appropriate performance metrics.

D.

Monitor the work of the external auditors.

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.