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IIA-CIA-Part3 Exam Questions and Answers, Certified Internal Auditor | SPOTO

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Question #1
Which of the following would be the best method to collect information about employees' job satisfaction?
A. Online surveys sent randomly to employees
B. Direct onsite observations of employees
C. Town hall meetings with employees
D. Face-to-face interviews with employees
View answer
Correct Answer: D
Question #2
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
View answer
Correct Answer: D
Question #3
Which is the least effective form of risk management?
A. Systems-based preventive control
B. People-based preventive control
C. Systems-based detective control
D. People-based detective control
View answer
Correct Answer: D
Question #4
Which of the following statements is correct regarding corporate compensation systems and related bonuses? 1. A bonus system should be considered part of the control environment of an organization and should be considered in formulating a report on internal control. 2. Compensation systems are not part of an organization's control system and should not be reported as such. 3. An audit of an organization's compensation system should be performed independently of an audit of the control system over other func
A. 1 only
B. 2 only
C. 3 only
D. 2 and 3 only
View answer
Correct Answer: A
Question #5
In an effort to increase business efficiencies and improve customer service offered to its major trading partners, management of a manufacturing and distribution company established a secure network, which provides a secure channel for electronic data interchange between the company and its partners. Which of the following network types is illustrated by this scenario?
A. A value-added network
B. A local area network
C. A metropolitan area network
D. A wide area network
View answer
Correct Answer: A
Question #6
Which of the following cost of capital methods identifies the time period required to recover the cost of the capital investment from the annual inflow produced?
A. Cash payback technique
B. Annual rate of return technique
C. Internal rate of return method
D. Net present value method
View answer
Correct Answer: A
Question #7
Which of the following activities most significantly increases the risk that a bank will make poor-quality loans to its customers?
A. Borrowers may not sign all required mortgage loan documentation
B. Fees paid by the borrower at the time of the loan may not be deposited in a timely manner
C. The bank's loan documentation may not meet the government's disclosure requirements
D. Loan officers may override the lending criteria established by senior management
View answer
Correct Answer: D
Question #8
Which of the following practices impacts copyright issues related to the manufacturer of a smart device?
A. Session hijacking
B. Jailbreaking
C. Eavesdropping
D. Authentication
View answer
Correct Answer: B
Question #9
When examining an organization's strategic plan, an internal auditor should expect to find which of the following components?
A. Identification of achievable goals and timelines
B. Analysis of the competitive environment
C. Plan for the procurement of resources
D. Plan for progress reporting and oversight
View answer
Correct Answer: A
Question #10
Which of the following statements is correct regarding risk analysis?
A. The extent to which management judgments are required in an area could serve as a risk factor in assisting the auditor in making a comparative risk analysis
B. The highest risk assessment should always be assigned to the area with the largest potential loss
C. The highest risk assessment should always be assigned to the area with the highest probability of occurrence
D. Risk analysis must be reduced to quantitative terms in order to provide meaningful comparisons across an organization
View answer
Correct Answer: A
Question #11
Which of the following statements is true regarding activity-based costing (ABC)?
A. An ABC costing system is similar to conventional costing systems in how it treats the allocation of manufacturing overhead
B. An ABC costing system uses a single unit-level basis to allocate overhead costs to products
C. An ABC costing system may be used with either a job order or a process cost accounting system
D. The primary disadvantage of an ABC costing system is less accurate product costing
View answer
Correct Answer: C
Question #12
An organization had a gross profit margin of 40 percent in year one and in year two. The net profit margin was 18 percent in year one and 13 percent in year two. Which of the following could be the reason for the decline in the net profit margin for year two?
A. Cost of sales increased relative to sales
B. Total sales increased relative to expenses
C. The organization had a higher dividend payout rate in year two
D. The government increased the corporate tax rate
View answer
Correct Answer: A
Question #13
Which of the following is a role of the board of directors in the governance process?
A. Conduct periodic assessments of the organization's governance systems
B. Obtain assurance concerning the effectiveness of the organization's governance systems
C. Implement an effective system of internal controls to support the organization's governance systems
D. Review and approve operational goals and objectives
View answer
Correct Answer: B
Question #14
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
View answer
Correct Answer: D
Question #15
The decision to implement enhanced failure detection and back-up systems to improve data integrity is an example of which risk response?
A. Risk acceptance
B. Risk sharing
C. Risk avoidance
D. Risk reduction
View answer
Correct Answer: D
Question #16
Which of the following statements regarding organizational governance is not correct?
A. An effective internal audit function is one of the four cornerstones of good governance
B. Those performing governance activities are accountable to the customer
C. Accountability is one of the key elements of organizational governance
D. Governance principles and the need for an internal audit function are applicable to governmental and not-for-profit activities
View answer
Correct Answer: B
Question #17
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
View answer
Correct Answer: C
Question #18
A financial institution receives frequent and varied email requests from customers for funds to be wired out of their accounts. Which verification activity would best help the institution avoid falling victim to phishing?
A. Reviewing the customer's wire activity to determine whether the request is typical
B. Calling the customer at the phone number on record to validate the request
C. Replying to the customer via email to validate the sender and request
D. Reviewing the customer record to verify whether the customer has authorized wire requests from that email address
View answer
Correct Answer: B
Question #19
Which of these instances accurately describes the responsibilities for big data governance?
A. Management must ensure information storage systems are appropriately defined and processes to update critical data elements are clear
B. External auditors must ensure that analytical models are periodically monitored and maintained
C. The board must implement controls around data quality dimensions to ensure that they are effective
D. Internal auditors must ensure the quality and security of data, with a heightened focus on the riskiest data elements
View answer
Correct Answer: A
Question #20
According to IIA guidance, which of the following statements is true regarding penetration testing?
A. Testing should not be announced to anyone within the organization to solicit a real-life response
B. Testing should take place during heavy operational time periods to test system resilience
C. Testing should be wide in scope and primarily address detective management controls for identifying potential attacks
D. Testing should address the preventive controls and management's response
View answer
Correct Answer: B

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