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  • Exam Name: CIA Exam Part Three: Business Knowledge for Internal Auditing
  • Last Update: 18-Apr-2024
  • Questions and Answers: 488
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IIA-CIA-Part3-3P Questions and Answers

Question # 1

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.

Question # 2

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.

Question # 3

An internal auditor discovered that several unauthorized modifications were made to the production version of an organization's accounting application. Which of the following best describes this deficiency?

A.

Production controls weakness.

B.

Application controls weakness.

C.

Authorization controls weakness.

D.

Change controls weakness.

Question # 4

Which of the following is true regarding an organization's relationship with external stakeholders?

A.

Specific guidance must be followed when interacting with nongovernmental organizations.

B.

Disclosure laws tend to be consistent from one jurisdiction to another.

C.

There are several internationally recognized standards for dealing with financial donors.

D.

Legal representation should be consulted before releasing internal audit information to other assurance

Question # 5

Which of the following is a key characteristic of a zero-based budget?

A.

A zero-based budget provides estimates of costs that would be incurred under different levels of activity.

B.

A zero-based budget maintains focus on the budgeting process.

C.

A zero-based budget is prepared each year and requires each item of expenditure to be justified.

D.

A zero-based budget uses input from lower-level and middle-level managers to formulate budget plans.

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