[Oct 30, 2021] IIA-CIA-Part3 Exam Brain Dumps - Study Notes and Theory
Pass IIA IIA-CIA-Part3 Test Practice Test Questions Exam Dumps
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NEW QUESTION 61
An internal audit manager is explaining to a newly hired staff auditor the various analytics techniques frequently used by the internal audit activity Which of the following statements is true regarding these analytics techniques?
- A. Data mining involves examining small amounts of structured data in a systematic manner
- B. Process analysis is a type of data mining where the data subject is a designated area of a process
- C. Data mining is a type of data analysis that focuses on finding statistical relationships in order to create profiles
- D. Process mining is a type of data analysts where the data subject is a process
Answer: C
NEW QUESTION 62
What is the economic term used to describe the situation in which each nation specializes in the production of goods that it produces relatively more efficiently than other nations and imports those goods that are produced relatively more efficiently by other nations?
- A. Relative competition.
- B. Comparative advantage.
- C. Diminishing returns.
- D. Balance of trade.
Answer: B
Explanation:
The relevant concept is comparative advantage, which compares the costs of inputs within a single country_ In contrast, the concept of absolute advantage with respect of inputs between countries. It is possible that a country might have an absolute advantage, with respect to every product, but comparative. advantage is different from absolute advantage. A particular nation can have a comparative advantage even though it does not have an absolute advantage. For example assume that Country A can produce Item for US $100 and Item Y for US $200 and that Country B earl produce Item X for US $50 and Item Y for US $150. B has an absolute advantage in the production of both procedures however, B has a comparative advantage in producing Item X 50 100, or 50% of the A cost compared with 150 200, or 75% of the A cost for Item Y)_ A has a comparative advantage in producing Item Y 200 150. or 133% of the B cost, versus 100 50, or 200% for Item X). A nation will benefit by exporting goods in which it has a comparative advantage and importing goods in which it does not have a comparative advantage. Total output will be maximized when each nation specializes in the products in which it has the greatest comparative advantage or the least comparative disadvantage.
NEW QUESTION 63
A local area network LAN) is best described as a(n):
- A. Computer system that connects computers of all sizes, workstations, terminals, and
other devices within a limited proximity - B. System to allow computer users to meet and share ideas and information.
C Electronic library containing millions of items of data that can be reviewed, retrieved, and
analyzed.
D Method to offer specialized software, hardware, and data-handling techniques that
improve effectiveness and reduce costs.
Answer: A
Explanation:
A LAN is a local distributed computer system, often housed within a single building. Computers, communication devices, and other equipment are linked by cable. Special software facilitates efficient data communication among the hardware devices.
NEW QUESTION 64
Which of the following is an example of an application control?
- A. System data backup process.
- B. Automated password change requirements.
- C. Formatted data fields.
- D. User testing of system changes.
Answer: C
Explanation:
Explanation/Reference: https://chapters.theiia.org/montreal/ChapterDocuments/GTAG%208%20-%20Auditing%
20application%20controls.pdf
NEW QUESTION 65
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. 1, 2, and 4 only
- B. 2, 3, and 4 only
- C. 1 and 2 only
- D. 3 and 4 only
Answer: A
Explanation:
Explanation/Reference:
NEW QUESTION 66
In which product-mix pricing strategy is it appropriate for the seller to accept any price that exceeds the storage and deliver} casts for the product?
- A. By-product pricing.
- B. Captive-product pricing.
- C. Product-bundle pricing.
- D. Optional-product pricing.
Answer: A
Explanation:
A by-product is a product of relatively minor importance generated during the production of one or more other products. Its production entails no additional costs. Any amount received above the storage and delivery. casts for a by-product allows the seller to reduce the main product's price to make it more competitive.
NEW QUESTION 67
Which of the following most accurately describes the purpose of application authentication controls?
- A. To prevent or detect errors in data processed using business applications.
- B. To ensure that data input into business applications is valid, complete, and accurate.
- C. To ensure the validity, accuracy, and completeness of outputs from business applications.
- D. To ensure that business applications are protected from unauthorized logical access.
Answer: D
NEW QUESTION 68
When an entity increases its degree of financial leverage DFL), the:
- A. Standard deviation of returns on the equity of the entity rises.
- B. Systematic risk of the entity rises.
- C. Systematic risk of the entity falls.
- D. Equity beta of the entity falls.
Answer: A
Explanation:
The DFL equals the percentage change in FPS earnings available to ordinary shareholders) divided by the percentage change in net operating profit or loss. When the DFL rises, fixed interest charges and the riskiness of the entity rise. As a result, the variability of returns will increase. In other words, the standard deviation of returns of the entity rises.
NEW QUESTION 69
If the bank uses the minimax regret criterion for selecting the location of the branch, it will select.
- A. L4.
- B. L1.
- C. L2.
- D. L3.
Answer: C
Explanation:
Under the minimax regret criterion, the decision maker selects the choice that minimizes the maximum regret (opportunity cost)the maximum regret for each location is determined from the opportunity loss matrix. The maximum regret for each location is the highest number in each column as indicated below.
The location with the minimum regret is L2. If demand is low, L2 has a payoff -2, whereas L1 has a payoff of 7. 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.
NEW QUESTION 70
Organizations use matrix management to accomplish which of the following?
- A. To strengthen corporate headquarters.
- B. To improve the chain of command.
- C. To focus better on a single market.
- D. To increase lateral communication.
Answer: D
NEW QUESTION 71
Which of the following is an important senior management responsibility with regard to information systems security?
- A. Identifying ownership of data.
- B. Assessing exposures.
- C. Training employees in security matters.
- D. Assigning access privileges.
Answer: B
Explanation:
Senior management is responsible for risk assessment, including identification of risks and consideration of their significance, the likelihood of their occurrence, and how they should be managed. Senior management is also responsible for establishing organizational policies regarding computer security and implementing a compliance structure. Thus, senior management should assess the risks to the integrity, confidentiality, and availability of information systems data and resources.
NEW QUESTION 72
If the entity's raw materials inventory as of Tiber 31 of the current year ending inventory) was miscounted and the true figure was higher than US $ one effect on the year-end financial statements would be that:
- A. Working capital is overstated.
- B. Profit is overstated.
- C. Cost of goods said is overstated.
- D. Cost of goods produced is understated.
Answer: C
Explanation:
If the ending inventory of raw materials is understated, r materials used is overstated, cost of goods produced is overstated, and cost of goods sold is overstated.
NEW QUESTION 73
On February 1, Year 1, a computer software firm agrees to program a software package.
Twelve payments of US $1 0.000 on the first of each month are to be made, with the first payment March 1, Year 1. The software is accepted by the client June 1, Year 2. How much Year 1 revenue should be recognized?
- A. US $100.000
- B. US $110.01,0
- C. US $120.000
- D. US $0
Answer: D
Explanation:
Recognition of an element of financial statements income, which includes revenue and gains) requires that two criteria be met. It must be probable that any future economic benefit associated with the item will flow to or from the entity, and the cost or value of the item must be measurable with reliability. The usual procedures for income recognition. e.g., that income be earned, reflect these criteria. Thus, income is recognized when an increase in future economic benefits is associated with an increase in an asset or a decrease in a liability. However, the entity has not substantially completed what it must do to be entitled to the benefits represented by the advance payment, and the receipt of future economic benefits is not sufficiently certain to merit income recognition.
Accordingly, a liability should be recognized because the entity has a current obligation arising from a past event that will require an outflow of economic benefits, that is, to deliver the software or to refund the customer's money. Thus, a liability for US $100,000 and revenue of US $0 should be recognized for Year I NOTE: This analysis assumes that the sale of the software is a sale either of goods or of services for which the appropriate conditions have not been met. Under IRS 18, Revenue Recognition, revenue is recognized for a sale of goods when the entity has transferred the significant risks and rewards of ownership, the entity has neither continuing managerial involvement to a extent associated with ownership nor effective control over the goods, the amount can be reliably measured, it is probable that the economic benefits will flow to the entity, and transaction costs can be reliably measured. For a sale of services, revenue is recognized when revenue can be reliably measured, it is probable that the economic benefits will flow to the entity, the stage of completion can be reliably measured, and the costs incurred and the costs to complete can be reliably measured.
NEW QUESTION 74
In an economic order quantity EOQ) model, both the costs per order and the holding costs are estimates. If those estimates are varied to determine how much the changes affect the
optimal EOQ, such an analysis would be called a:
- A. Forecasting model.
- B. Decision analysis.
- C. Critical path method analysis.
- D. Sensitivity analysis.
Answer: D
Explanation:
An economic order quantity EOQ) sensitivity analysis involves varying the holding carrying) costs per unit and/or the order costs to determine how much the changes affect the optimal EOQ.
NEW QUESTION 75
Operational management in the IT department has introduced performance evaluation policies that are linked to employees achieving continuing education hours. This activity is designed to prevent which of the following conditions?
- A. Accountability/reward failure.
- B. Monitoring gap
- C. Knowledge/skills gap
- D. Communication failure.
Answer: C
NEW QUESTION 76
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