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Practice with IIA-CIA-Part3 Dumps for Certified Internal Certified Exam Questions & Answer

IIA-CIA-Part3 exam is conducted by the Institute of Internal Auditors (IIA), which is a professional organization that represents internal auditors worldwide. To take the exam, candidates must have completed the IIA-CIA-Part1 and IIA-CIA-Part2 exams. The IIA-CIA-Part3 exam is a four-hour computer-based exam that consists of 100 multiple-choice questions. IIA-CIA-Part3 exam is designed to test the candidate's knowledge in four key areas: Business Acumen, Information Security, Information Technology, and Financial Management. Passing IIA-CIA-Part3 exam is an important step towards becoming a Certified Internal Auditor (CIA).

IIA-CIA-Part3 (Business Knowledge for Internal Auditing) certification exam is a globally recognized certification exam for internal auditors seeking to enhance their knowledge and skills in business-related topics. IIA-CIA-Part3 exam is designed to test the candidate's understanding of business processes, financial management, strategic planning, and risk management. Passing the IIA-CIA-Part3 exam is a testament to the candidate's expertise in business knowledge and their ability to provide valuable insights to their organization.

IIA-CIA-Part3 (Business Knowledge for Internal Auditing) certification exam is designed to test the knowledge and skills of internal auditors in the area of business knowledge. Business Knowledge for Internal Auditing certification is offered by the Institute of Internal Auditors (IIA) and is recognized internationally as a benchmark for excellence in internal auditing. IIA-CIA-Part3 exam covers a wide range of topics such as financial management, marketing, operations management, and strategic planning.

 

NEW QUESTION # 42
What are the effects of an adjusting entry used to accrue revenue from credit sales?

• A. Option D
• B. Option C
• C. Option B
• D. Option A

Answer: C

Explanation:
The journal entry to accrue revenue requires a debit to a receivable account and a credit to a revenue account. Thus, the accrual of revenue increases assets and equity.

NEW QUESTION # 43
Which of the following cost of capital methods identifies the time period required to recover She cost of the capital investment from the annual inflow produced?

• A. Cash payback technique
• B. Internal rate of return method.
• C. Annual rate of return technique.
• D. Net present value method.

Answer: A

NEW QUESTION # 44
Which of the following statements is true regarding an organization's servers?

• A. Servers manage the data stored in databases residing on the information system.
• B. Servers optimize data processing by sharing it with other computers on the information system
• C. Servers enforce access controls between networks transmitting data on the information system
• D. Servers manage the interconnectivity of system hardware devices in the information system.

Answer: D

NEW QUESTION # 45
The entity has current assets of:

• A. US $3,033,333 C US $3,333,333
• B. US $1,000,000
• C. US $3,633,333

Answer: A

Explanation:
Return on total assets3% equals profit US $100,000) divided by total assets. Consequently, total assets equal US $3,333,333$100,000 - 03). Current assets must therefore equal US $3,033,333$3,333,333 total assets - $300,000 other assets).

NEW QUESTION # 46
A control for ensuring that the source code and the executable code for a program match is:

• A. Verifying that the program move request is authorized.
• B. Requiring program, system, and parallel testing of the code.
• C. Recompiling source code into the production load library.
• D. Authorizing programmer access to test libraries only.

Answer: C

Explanation:
Recompiling source code into the production load library ensures that the source and executable codes match because the executable code is created from the source code.

NEW QUESTION # 47
Net domestic product is composed of the total market value of all?

• A. Goods and services produced in the economy in 1 year.
• B. Final goods and services produced in the economy in 1 year.
• C. Final goods and services produced in the economy in 1 year minus the capital consumption allowance.
• D. Goods and services produced in the economy in 1 year minus the capital consumption allowance.

Answer: C

Explanation:
Net domestic product is the market value of all final goods and services produced within the boundaries of a country within 1 year minus the capital consumption allowance.

NEW QUESTION # 48
Within an enterprise, IT governance relates to the:
1.Alignment between the enterprise's IT long term plan and the organization's objectives.
2.Organizational structures of the company that are designed to ensure that IT supports the
organization's strategies and objectives.
3.Operational plans established to support the IT strategies and objectives.
4.Role of the company's leadership in ensuring IT supports the organization's strategies
and objectives.

• A. 2, 3, and 4 only
• B. 1, 2, and 4 only
• C. 1 and 2 only
• D. 3 and 4 only

Answer: B

NEW QUESTION # 49
A distribution channel moves goods from producers to customers. Suppose a channel has four producers, each serving the same four customers, and no middlemen. If a distributor is introduced, the number of contacts among producers, customers, and the distributor) in the channel will:

• A. Be unaffected.
• B. Increase from 8 to 16.
• C. Decrease from 8 to 4.
• D. Decrease from 16 to 8.

Answer: D

Explanation:
The number of contacts without a distributor is 16 four producers four customers). The number with a distributor is 8 four producers +four customers). Thus, the effort required of producers and consumers is reduced by the distributor, thereby increasing marketing efficiency.

NEW QUESTION # 50
On January 2, Year 1, Kine Co. granted Morgan, its preside -I t. share options to buy 1.000 shares of Kine's US $10 per ordinary stock. The options call for a price of US$20 per share and are exercisable for 3 years following the grant date. Morgan exercised the options on December 31, Year 1. The market price of the shares was US $50 on January 2, Year 1, and US $70 on the following for December 31. The market price of the shares is followed because the fair value of the option is not reliable measurable, by what net amount should equity increased as a result of the grant and exercise of the options?

• A. US $70,000
• B. US $50,000
• C. US $30,000
• D. US $ 20,000

Answer: D

Explanation:
The measurements January 2, Year 'I_ At that date, the intrinsic value of the options is US $30.000 [1,000 shares$50 market price -$20 option price)]. This US $30,000 will be recorded as both compensation expense and options outstanding. The net effect on equity is 0. When the options are exercised the US $20,0001.000 shares $20 option price)]. This US $30,000 will be recorded as both compensation expense and options outstanding will be allocated to share capital as US $30,000 of options are exercised, the US $ 20,0001,000 shares x $20 exercise price) cash received and the US $30,000 of options are exercised price) cash received and the US $30,000 of options outstanding will be allocated to share capital as US $10,000 ordinary stock and US $40,000 additional paid in capital. The net effect on equity will be a US $20,000 increase.

NEW QUESTION # 51
A manufacturing firm produces multiple families of products requiring various combinations of different types of parts. The manufacturer has identified various cost pools. One of which consists of materials handling costs. This cost pool includes the wages and employee benefits of the workers involved in receiving materials, ins ting materials, storing materials in inventory, and moving materials to the workstations; depreciation and maintenance of materials handling equipment forklift trucks): and costs of supplies used as well as other related costs. Of the following, the most appropriate cost driver for assigning materials handling costs to the various products most likely is:

• A. Number of vendors involved.
• B. Number of parts used.
• C. Number of units produced.
• D. Direct labor hours.

Answer: B

Explanation:
Cost drivers should be related to the costs accumulated in cost pools. The number of parts used has a direct cause-and-effect relationship with materials handling costs. The more parts used. the more handling is involved.

NEW QUESTION # 52
The two main variables that contribute to increases in real gross domestic product GDP derived from labor inputs are labor productivity and:

• A. Total worker hours.
• B. The potential labor force.
• C. Quality of output.
• D. The inflation rate.

Answer: A

Explanation:
Real GDP increases when resource inputs and their productivity increase. Thus, to the extent that real GDP depends on labor inputs, real GDP equals total worker hours labor input) times labor productivity real output per worker per hour).

NEW QUESTION # 53
Plantation should treat Lease A as a(n):

• A. Operating lease charging US $14,200 in rental expense and US $800 in executor costs to annual operations.
• B. Operating lease charging the present value of the yearly rental expense to annual operations.
• C. Finance lease with an initial asset amount of US $101.400.
• D. Operating lease charging US $15.000 in rental expense and US $800 in executor costs to annual operations.

Answer: D

Explanation:
Lease a is an operating lease with a $ 15,000 annual rental expense with annual executor costs (e.g.) maintenance, insurance, and taxes of US$800 to be paid by the lessee, an
operating lease does not transfer the risks and rewards of ownership to the lease a is nothing more than a rent arrangement. Circumstances in which the risks and rewards of ownership are normally deemed to be transferred include the following the lease transfers title to the lessee, the lease has a bargain purchase option, the lease term is for the major part of the useful life of the leased asset, the present value of the minimum lease payments is at least substantially all of the asset's fair value, or the asset is usable only by the lessee without major modification. On January1, plantation partners is planning to enter as the lessee into the two lease agreements described in the opposite column each lease is noncancelable, and plantation does not receive title to either leased property during or at the end of the lease term all payments required under these agreements are due on January 1 each year.

NEW QUESTION # 54
When a right of return exists, an entity may recognize revenue from a sale of goods at the time of sale only if:

• A. The seller believes returns will not be material.
• B. The seller retains the risks and rewards of ownership.
• C. The buyer resells the goods.
• D. The amount of future returns can be reliably estimated.

Answer: D

Explanation:
One condition for condition of revenue from the sale of goods is the transfer of the significant risks and rewards of ownership. Retention of significant risk may occur when, for example, the buyer may rescind the purchase for a reason stipulated in the contract and the buy, is uncertain about the probability of return. However if the entity can reliably estimate future returns and recognize a liability for returns based on experience and other pertinent information, revenue may be recognized at the time of sale if the other conditions for revenue recognition are also met.

NEW QUESTION # 55
A change in an accounting estimate is shown on the income statement:

• A. Only in the relevant account
• B. In a separate section after continuing operations but before extraordinary items.
• C. As a cumulative-effect adjustment.
• D. In a separate section entitled extraordinary items.

Answer: A

Explanation:
A change in an accounting estimate is accounted for prospectively and is shown on the income statement only in the relevant account. The effect of the change is included in the same income statement classification as the previous estimate. However, prior-period statements and opening balances are not adjusted.

NEW QUESTION # 56
Which of the following items represents the first thing that should be done with obtained dote in the data analytics process?

• A. Verify completeness and integrity.
• B. Verify existence and completeness.
• C. Verify completeness and accuracy.
• D. Verify existence and accuracy.

Answer: D

NEW QUESTION # 57
The internal auditor of a bank has developed a multiple regression model that has been used for a number of years to estimate the amount of interest income from commercial loans. During the current year, the auditor applies the model and discovers that the r2 value has decreased dramatically, but the model otherwise seems to be working.
Which of the following conclusions is justified by the change?

• A. A linear regression analysis would increase the model's reliability.
• B. Some new factors not included in the model are causing interest income to change.
• C. Regression analysis is no longer an appropriate technique to estimate interest income.
• D. Changing to a cross-sectional regression analysis should cause r2to increase.

Answer: B

Explanation:
The coefficient of determination (r2) is the amount of variation in the dependent variable (interest income) that is explained by the independent variables. In this case, less of the change in interest income is explained by the model. Thus, some other factor must be causing interest income to change. This change merits audit investigation.

NEW QUESTION # 58
A client is concerned that a power outage or disaster could impair the computer hardware's ability to function as designed. The client desires off-site backup hardware facilities that are fully configured and ready to operate within several hours. The client most likely should consider a:

• A. Warm site.
• B. Cold site.
• C. Cool site.
• D. Hot site.

Answer: D

Explanation:
A hot site is a service bureau that is a fully operational processing facility and is promptly available in the case of a power outage or disaster.

NEW QUESTION # 59
Which of the following represents the greatest exposure to the integrity of electronic funds transfer data transmitted from a remote terminal?

• A. Leased telephone circuits.
• B. Poor system documentation.
• C. Network viruses.
• D. Poor physical access controls over the data center.

Answer: A

Explanation:
Leased telephone circuits represent a direct exposure to the risk of breached
data integrity.
They use public lines that c. an be easily identified and tapped.

NEW QUESTION # 60
A bank was considering its first use of computer-aided software engineering CASE) to develop an inquiry system for account representatives to access consolidated profiles of customers' accounts. A benefit of using CASE in this situation is that:

• A. No new software development tools would be needed.
• B. No training of programmers would be required.
• C. The need for testing would be reduced.
• D. Management of the development process would be improved.

Answer: D

Explanation:
CASE applies computers to software design and development. It permits creation and maintenance of systems documentation on the computer and the automation of a part of the programming effort. Using CASE would improve management of the development process because the CASE software maintains the links between the different components,
provides built-in project management tools, and supplies automated testing aids.

NEW QUESTION # 61
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.

Answer: C

NEW QUESTION # 62
Based on a comparison of RST's times-interest-earned ratios in Year 5 and Year 6, what is a likely conclusion?

• A. RST's liquidity has declined.
• B. RST's liquidity has improved.
• C. RST's long-run solvency has improved.
• D. RST's long-run solvency has declined.

Answer: C

Explanation:
The times-interest-earned ratio increased from 14.67 times in Year 5 44,0On - 3,00n) to
23.33 times in Year 6 70,000 - 3.000). This increase signifies that RST has more profit
available to meet the interest payments on its debt, and that long-run solvency has
improved. Consequently, creditors will RST's obligations as less risky.
An entity had the following opening and closing inventory balances during the current year:

The following transactions and events occurred during the current year 300,000 of raw materials were purchased, of which 20,000 were returned because of defects.
600,000 of direct labor costs were incurred. 750,000 of production overhead costs were incurred.

NEW QUESTION # 63
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