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

Page: 5 / 15
Total 488 questions

Which of the following factors is considered a disadvantage of vertical integration?

A.

It may reduce the flexibility to change partners.

B.

It may not reduce the bargaining power of suppliers.

C.

It may limit the organization's ability to differentiate the product.

D.

It may lead to limited control of proprietary knowledge.

Which of the following is false with regard to Internet connection firewalls?

A.

Firewalls can protect against computer viruses.

B.

Firewalls monitor attacks from the Internet.

C.

Firewalls provide network administrators tools to retaliate against hackers.

D.

Firewalls may be software-based or hardware-based.

Which of the following corporate social responsibility strategies is likely to be most effective in minimizing confrontations with influential activists and lobbyists?

A.

Continually evaluate the needs and opinions of all stakeholder groups.

B.

Ensure strict compliance with applicable laws and regulations to avoid incidents.

C.

Maintain a comprehensive publicity campaign that highlights the organization's efforts.

D.

Increase goodwill through philanthropic activities among stakeholder communities.

Which of the following descriptions of the internal control system are indicators that risks are managed effectively?

1) Existing controls promote compliance with applicable laws and regulations.

2) The control environment is designed to address all identified risks to the organization.

3) Key controls for significant risks to the organization remain consistent over time.

4) Monitoring systems are in place to alert management to unexpected events.

A.

1 and 3.

B.

1 and 4.

C.

2 and 3.

D.

2 and 4.

Which of the following statements about slack time and milestones are true?

1) Slack time represents the amount of time a task may be delayed without delaying the entire project.

2) A milestone is a moment in time that marks the completion of the project's major deliverables.

3) Slack time allows the project manager to move resources from one task to another to ensure that the project is finished on time.

4) A milestone requires resource allocation and needs time to be completed.

A.

1 and 4 only

B.

2 and 3 only

C.

1, 2, and 3 only

D.

1, 2, 3, and 4

The main reason to establish internal controls in an organization is to:

A.

Encourage compliance with policies and procedures.

B.

Safeguard the resources of the organization.

C.

Ensure the accuracy, reliability, and timeliness of information.

D.

Provide reasonable assurance on the achievement of objectives.

When developing an effective risk-based plan to determine audit priorities, an internal audit activity should start by:

A.

Identifying risks to the organization's operations.

B.

Observing and analyzing controls.

C.

Prioritizing known risks.

D.

Reviewing organizational objectives.

Which of the following COSO internal control framework components encompasses establishing structures, reporting lines, authorities, and responsibilities?

A.

Control environment.

B.

Control activities.

C.

Information and communication.

D.

Monitoring.

A manager has difficulty motivating staff to improve productivity, despite establishing a lucrative individual reward system. Which of the following is most likely the cause of the difficulty?

A.

High degree of masculinity.

B.

Low uncertainty avoidance.

C.

High collectivism.

D.

Low long-term orientation.

Refer to the exhibit.

If the profit margin of an organization decreases, and all else remains equal, which of the following describes

how the "Funds Needed" line in the graph below will shift?

A.

The "Funds Needed" line will remain pointed upward, but will become less steep.

B.

The "Funds Needed" line will remain pointed upward, but will become more steep.

C.

The "Funds Needed" line will point downward with a minimal slope.

D.

The "Funds Needed" line will point downward with an extreme slope.