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IIA-CIA-Part3 exam is a critical component of the CIA certification process. It tests candidates' abilities to apply business concepts to internal auditing and prepares them for the challenges of the modern business environment. Candidates who pass the exam can demonstrate their competence and commitment to the internal auditing profession, which can help them achieve their career goals.
To be eligible to take the IIA-CIA-Part3 exam, candidates must have completed the two other exams required for the CIA certification: IIA-CIA-Part1 (Essentials of Internal Auditing) and IIA-CIA-Part2 (Practice of Internal Auditing). Candidates must also have at least 24 months of internal auditing experience or equivalent education or other relevant experience. IIA-CIA-Part3 exam consists of 100 multiple-choice questions that must be completed within a 2.5-hour time frame.
NEW QUESTION # 203
Which of the following is classified as a product cost using the variable costing method?
1. Direct labor costs
2. Insurance on a factory.
3. Manufacturing supplies.
4. Packaging and shipping costs
- A. 1 and 2
- B. 2 and 4
- C. 1 and 3
- D. 3 and 4
Answer: C
NEW QUESTION # 204
One of the primary advantages of budgeting is that it:
- A. Bases the profit plan on estimates.
- B. Is continually adapted to fit changing circumstances.
- C. Requires departmental managers to make plans in conjunction with the plans of other interdependent departments.
- D. Does not take the place of management and administration.
Answer: C
Explanation:
A budget is a quantitative model of a plan of action developed by management. A budget functions as an aid to planning, coordination, and control. Thus, a budget helps management to allocate resources efficiently and to ensure that subunit goals are congruent with those of other subunits and of the organization.
NEW QUESTION # 205
The EOQ (economic order quantity) model calculates the cost-minimizing quantity of a product to order, based on a constant annual demand, carrying costs per unit per annum, and cost per order. For example, the EOQ is approximately 447 units if the annual demand is 10,000 units, carrying costs are US $1 per item per annum, and the cost of placing an order is US $10. What will the EOQ be if the demand falls to 5,000 units per annum and the carrying and ordering costs remain at US $1 and US $10, respectively?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: D
Explanation:
The EOQ formula is:
NEW QUESTION # 206
A bank plans to open a branch in one of five locations (labeled L1, L2, L3, L4, L5). Demand for bank services may be high, medium, or low at each of these locations. Profits for each location-demand combination are presented in the payoff matrix.
If, in addition to the estimated profits .management of the bank assesses the probabilities of high, medium, and low demands to be 0.3.0.4, and 0.3, respectively, what is the expected opportunity loss from selecting location L4?
- A. US$7.90
- B. US$5.50
- C. US$5.00
- D. US$7.50
Answer: B
Explanation:
First, the opportunity loss matrix must be prepared
NEW QUESTION # 207
In the Gantt chart below, shaded bars represent completed portions of activities, bars depicted with broken lines represent uncompleted portions, and blank bars represent activities not yet begun.
As of week 8, the Gantt chart shows that the project is:
- A. On schedule.
- B. Complete.
- C. Ahead of schedule.
- D. Behind schedule.
Answer: A
Explanation:
Activities B and C are the only activities that should be underway during week 8. Since both are underway and on schedule, the project is on schedule
NEW QUESTION # 208
The US dollar amount of the costs of quality classified as preventive costs for the manufacturing firm would be:
- A. US $701,000
- B. US $768,000
- C. US $736,000
- D. US $643,000
Answer: A
Explanation:
Prevention attempts to avoid defective output, e.g., by employee training, reviews of equipment design, preventive maintenance, and evaluation of suppliers. Accordingly, the preventive costs equal U $701,000 U $275,000 design revie.ofs + U $180,000 process engineering + U $90,000 scheduled maintenance + U $1,000 training).
NEW QUESTION # 209
A control feature designed to negate the use of utility programs to read files that contain all authorized access user codes for the network is:
- A. A peer-to-peer network.
- B. Internally encrypted passwords.
- C. A password hierarchy.
- D. Logon passwords.
Answer: B
Explanation:
Utility programs can be used to gain access to almost any file. However, gaining access to a file of passwords would be useless if those passwords were encrypted prior to placing them in the file.
NEW QUESTION # 210
Which of the following IT professionals is responsible for providing maintenance to switches and routers to keep IT systems running as intended?
- A. Database administrator,
- B. Network administrator
- C. Data center operations manager
- D. Response and support team.
Answer: B
NEW QUESTION # 211
Which of the following application controls, implemented by management, monitors data being processed to ensure the data remains consistent and accurate?
- A. Management trail controls
- B. input controls
- C. Output controls.
- D. Integrity controls
Answer: D
NEW QUESTION # 212
During her annual performance review, a sales manager admits that she experiences significant stress due to her job but stays with the organization because of the high bonuses she earns. Which of the following best describes her primary motivation to remain in the job?
- A. Extrinsic reward.
- B. Intrinsic reward.
- C. The hierarchy of needs.
- D. Job enrichment
Answer: A
NEW QUESTION # 213
Which of the following is a strategy that organizations can use to stimulate innovation?
1.Source from the most advanced suppliers.
2.Establish employee programs that reward initiative.
3.Identify best practice competitors as motivators.
4.Ensure that performance targets are always achieved.
- A. 1, 2, and 3 only
- B. 1, 2, 3, and 4
- C. 1 and 3 only
- D. 2 and 4 only
Answer: A
NEW QUESTION # 214
While an operating budget is a key element in planning and control, it is not likely to:
- A. Integrate organizational activities.
- B. Set out long-range, strategic concepts.
- C. Establish a commitment of company resources.
- D. Provide subsidiary planning information.
Answer: B
Explanation:
Operating budgets seldom set out long-range strategic concepts because they usually deal with the quantitative allocation of people and resources. Strategic concepts are overall goals for the organization and are almost always stated in words.
NEW QUESTION # 215
Program documentation is a control designed primarily to ensure that:
- A. No one has made use of the computer hardware for personal reasons.
- B. Programs are kept up to date and perform as intended.
- C. Programmers have access to production programs.
- D. Programs do not make mathematical errors.
Answer: B
Explanation:
Complete, up-to-date documentation of all programs and associated operating procedures is necessary for efficient operation of a computer installation. Maintenance of programs is important to provide for continuity and consistency of data processing services to users. Program documentation the program run manual) consists of problem statements, systems flowcharts, operating instructions, record layouts, program flowcharts, program listings, test data, and approval and change sheets.
NEW QUESTION # 216
The responsibilities of a data administrator include monitoring:
- A. Backup of the system.
- B. Database security.
- C. The database industry.
- D. The performance of the database.
Answer: C
Explanation:
The DA handles administrative issues that arise regarding the database. The DA acts as an advocate by suggesting new applications and standards. One of the DA's responsibilities is to monitor the database industry for new developments. In contrast, the database administrator DBA) deals with the technical aspects of the database:
NEW QUESTION # 217
An organization is considering the outsourcing of its business processes related to payroll and information technology functions. Which of the following is the most significant area of concern for management regarding this proposed agreement?
- A. Ensuring that there are means of monitoring the efficiency of the outsourced process.
- B. Ensuring that payments to the vendor are appropriate and timely for the services delivered.
- C. Ensuring that the vendor has complete management control of the outsourced process.
- D. Ensuring that there are means of monitoring the effectiveness of the outsourced process.
Answer: D
NEW QUESTION # 218
A flexible budget is a quantitative expression of a plan that:
- A. Is developed for the actual level of output achieved for the budget period.
- B. Focuses on the costs of activities necessary to produce and sell products and services for a budget period.
- C. Project costs on the basis of future improvements in existing practices and procedures during a budget period.
- D. Is comprised of the budgeted income statement and its supporting schedules for a budget period.
Answer: A
Explanation:
A flexible budget is a series of budgets prepared for many levels of activity. It is designed to allow adjustment of the budget to the actual level of activity before comparing the budgeted activity with actual results.
NEW QUESTION # 219
Which of the following would best prevent unauthorized external changes to an organization's data?
- A. Antivirus software, data encryption, change logs.
- B. Antivirus software, firewall, backup procedures.
- C. Firewall, data encryption, backup procedures.
- D. Antivirus software, firewall, data encryption.
Answer: D
NEW QUESTION # 220
Because the VAN did not provide the internal auditor with access to its system, that portion of the engagement work program was not completed. Which one of the following should not be done by the internal auditor?
- A. Include the scope limitation in the final engagement communication.
- B. Rewrite the work program to eliminate the step
- C. Obtain the approval of the chief audit executive
- D. Document the VAN's actions in the working papers.
Answer: B
Explanation:
A scope limitation is a restriction placed upon the IAA that precludes it from accomplishing its objectives and plans. Among other things, a scope limitation may restrict the performance of necessary engagement procedures A scope limitation and its potential effect should be communicated. preferably in writing, to the governing authority. A VAN is an alternative to direct EDI communications between transacting parties. Consequently, it is a vital component of internal control over these transactions, and the internal auditor's inability to obtain access constitutes a material limitation on the scope of the engagement to evaluate risk exposures and the adequacy and effectiveness of internal control. As a result, the original engagement program should be annotated but not rewritten.
NEW QUESTION # 221
Which of the following statements about activity-based costing ABC) is false?
- A. Activity-based costing differs from traditional costing systems in that products are cross-subsidized.
- B. Activity-based costing is useful for allocating marketing and distribution costs.
- C. In activity-based costing, cost drivers are what cause costs to be incurred.
- D. Activity-based costing is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products.
Answer: D
Explanation:
ABC determines the activities that will serve as cost objects and then accumulates a cost pool for each activity using the appropriate activity base cost driver). It is a system that may be employed with job order or process costing methods. Thus, when there is only one product, the allocation of costs to the product is trivial. All of the cost is assigned to the one product; the particular method used to allocate the costs does not matter.
NEW QUESTION # 222
Which of the following is on advantage of a decentralized organizational structure, as opposed to a centralized structure?
- A. Larger talent pool
- B. Strong internal controls
- C. Greater cost-effectiveness
- D. Increased economies of scale
Answer: A
NEW QUESTION # 223
A manager discovers by chance that a newly hired employee has strong beliefs that are very different from the manager's and from those of most of the other employees. The manager's best course of action would be to:
- A. Take no action unless the new hire's behavior is likely to cause harm to the organization.
- B. Ask the rest of the team for their reaction and act according to the group consensus.
- C. Facilitate the reassignment of the new hire as quickly as possible before this situation becomes disruptive.
- D. Try to counsel the new hire into more reasonable beliefs.
Answer: A
Explanation:
The only legitimate grounds on which the supervisor may take action is the employee's behavior. Personal beliefs, such as those an religious and political matters, cannot be the basis of personnel actions. Discrimination an the basis of personal beliefs could expose the organization to legal action.
NEW QUESTION # 224
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IIA-CIA-Part3 certification exam is an important milestone for internal auditors seeking to demonstrate their knowledge and skills in the area of business knowledge. IIA-CIA-Part3 exam covers a broad range of topics related to business and requires a deep understanding of how businesses operate and how the internal audit function can add value. Achieving the certification demonstrates a commitment to professional development and can lead to increased career opportunities and higher salaries.
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