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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

Which of the following application software features is the least effective control to protect passwords?

A.

Suspension of user IDs after a user's repeated attempts to sign on with an invalid password.

B.

Encryption of passwords prior to their transmission or storage.

C.

Forced change of passwords after a designated number of days.

D.

Automatic logoff of inactive users after a specified time period of inactivity.

A retail organization is considering acquiring a composite textile company. The retailer's due diligence team determined the value of the textile company to be $50 million. The financial experts forecasted net present value of future cash flows to be $60 million. Experts at the textile company determined their company's market value to be $55 million if purchased by another entity. However, the textile company could earn more than $70 million from the retail organization due to synergies. Therefore, the textile company is motivated to make the negotiation successful. Which of the following approaches is most likely to result in a successful negotiation?

A.

Develop a bargaining zone that lies between $50 million and $70 million and create sets of outcomes between $50 million and $70 million.

B.

Adopt an added-value negotiating strategy, develop a bargaining zone between $50 million and $70 million, and create sets of outcomes between $50 million and $70 million.

C.

Involve a mediator as a neutral party who can work with the textile company's management to determine a bargaining zone.

D.

Develop a bargaining zone that lies between $55 million and $60 million and create sets of outcomes between $55 million and $60 million.

An organization had three large centralized divisions: one that received customer orders for service work; one that scheduled the service work at customer locations; and one that answered customer calls about service

problems. These three divisions were restructured into seven regional groups, each of which performed all three functions. One advantage of this restructuring would be:

A.

Better internal controls.

B.

Greater economies of scale.

C.

Improved work flow.

D.

Increased specialization.

Which of the following would best prevent unauthorized external changes to an organization's data?

A.

Antivirus software, firewall, data encryption.

B.

Firewall, data encryption, backup procedures.

C.

Antivirus software, firewall, backup procedures.

D.

Antivirus software, data encryption, change logs.

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.

An organization's balance sheet indicates that the total asset amount and the total capital stock amount remained unchanged from one year to the next, and no dividends were declared or paid. However, the organization reported a loss of $200,000. Which of the following describes the most likely year-over-year change to the organization's total liabilities and total stockholder equity?

A.

The total liabilities and total stockholder equity both increased.

B.

The total liabilities and total stockholder equity both decreased.

C.

The total liabilities decreased, and the total stockholder equity increased.

D.

The total liabilities increased, and the total stockholder equity decreased.

If legal or regulatory standards prohibit conformance with certain parts of The IIA's Standards, the auditor should do which of the following?

A.

Conform with all other parts of The IIA's Standards and provide appropriate disclosures.

B.

Conform with all other parts of The IIA's Standards; there is no need to provide appropriate disclosures.

C.

Continue the engagement without conforming with the other parts of The IIA's Standards.

D.

Withdraw from the engagement.

Which of the following statements about market signaling is correct?

1) The organization releases information about a new product generation.

2) The organization limits a challenger's access to the best source of raw materials or labor.

3) The organization announces that it is fighting a new process technology.

4) The organization makes exclusive arrangements with the channels.

A.

1 and 3 only

B.

1 and 4 only

C.

2 and 3 only

D.

2 and 4 only

Which of the following is the primary benefit of including end users in the system development process?

A.

Improved integrity of programs and processing.

B.

Enhanced ongoing maintenance of the system.

C.

Greater accuracy of the testing phase.

D.

Reduced need for unexpected software changes.

According to IIA guidance, which of the following would be a primary reason for an internal auditor to test the organization's IT contingency plan?

A.

To ensure that adequate controls exist to prevent any significant business interruptions.

B.

To identify and address potential security weaknesses within the system.

C.

To ensure that tests contribute to improvement of the program.

D.

To ensure that deficiencies identified by the audit are promptly addressed.