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IIA-CIA-Part3 Free Certification Exam Easy to Download PDF Format 2023
In order to be eligible to take the IIA-CIA-Part3 exam, candidates must have completed the IIA-CIA-Part1 and IIA-CIA-Part2 exams or have obtained a waiver. They must also meet the IIA's experience requirements, which vary depending on their educational background. Overall, the IIA-CIA-Part3 certification exam is a challenging but rewarding certification that can help internal auditors take their careers to the next level.
The IIA-CIA-Part3 exam consists of 100 multiple-choice questions and candidates have 2.5 hours to complete it. The exam is computer-based and can be taken at authorized Pearson VUE testing centers worldwide. The exam is divided into six domains, each of which covers a specific area of business knowledge. These domains include Business Acumen, Information Security, Information Technology, Financial Management, Operations Management, and Strategic Management. Candidates are required to have a solid understanding of each domain and how they relate to the internal auditing profession. Passing the IIA-CIA-Part3 exam is a prerequisite for earning the CIA certification, which is highly respected in the industry and can help internal auditors advance their careers.
NEW QUESTION # 27
A change in an accounting estimate is shown on the income statement:
- A. In a separate section entitled extraordinary items.
- B. As a cumulative-effect adjustment.
- C. In a separate section after continuing operations but before extraordinary items.
- D. Only in the relevant account
Answer: D
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 # 28
Which of the following costs of quality is a failure cost?
- A. Contract penalty for delivery of nonconforming goods.
- B. Systems development costs.
- C. Costs of inspecting in-process items.
- D. Costs of quality circles.
Answer: A
Explanation:
Failure costs are incurred after defective output has been removed from production. A contract penalty for faulty goods is an example of an external failure cost.
NEW QUESTION # 29
The following ratios relate to an entity's financial situation compared with that of its:
What conclusion could a financial analyst validly draw from these ratios?
- A. The entity uses more debt than does the average entity in the industry.
- B. The entity's profits are increasing over time.
- C. The entity's product has a high market share, leading to higher profitability.
- D. The entity's shares have a higher market value to carrying amount than does the rest of the industry.
Answer: A
Explanation:
The use of financial leverage has a multiplier effect on the return on assets. The extended Du Pont formula illustrates this point by showing that the return on equity equals the return on assets times the grace factor, also called the equity multiplier total assets -ordinary equity). Thus, greater use of debt increases the equity multiplier and the return on equity. In this example, the equity multiplier is 1:12 15.2% ROE / 7.9% ROA), and the industry average is 1.40 12.9% ROE / 9.2% ROA). The higher quality multiplier Indicates that the entity uses more debt than the industry average.
NEW QUESTION # 30
Unsecured loans are loans:
- A. That do not have to be repaid for over one year.
- B. Granted on the basis of a company's credit standing.
- C. That appear to be too risky for most lenders to consider.
- D. Backed by mortgaged assets.
Answer: B
NEW QUESTION # 31
The most important reason to use risk assessment in audit planning is to:
- A. Assist in developing audit programs.
- B. Identify redundant controls.
- C. Improve budgeting accuracy.
- D. Enhance assurance provided to management.
Answer: D
NEW QUESTION # 32
Which of the following are appropriate reasons for internal auditors to document processes as part of an audit engagement?
1. To determine areas of primary concern.
2. To establish a standard format for process mapping.
3. To define areas of responsibility within the organization.
4. To assess the performance of employees.
- A. 2 and 4 only
- B. 1 and 3 only
- C. 1 and 2 only
- D. 2 and 3 only
Answer: B
NEW QUESTION # 33
The management and employees of a large household goods moving company decided to adopt total quality management (TQM) and continuous improvement (CI). The company believes that if it became nationally known as adhering to TQM and CI, one result would be an increase in the company's profits and market share.
The primary reason for adopting TQM was to achieve
- A. Greater employee participation.
- B. Reduced delivery charges.
- C. Reduced delivery time.
- D. Greater customer satisfaction.
Answer: D
Explanation:
TQM is an integrated system that anticipates, meets, and exceeds customers' needs, wants, and expectations.
NEW QUESTION # 34
If the market rate of interest is [List A] the coupon rate when bonds are issued, then the bonds will sell in the market at a price [List B] the face value and the issuing firm will record a [List C] on bonds payable.
List A
List B
List C
Equal to
Equal to
Premium
Greater than
Greater than
Premium
Greater than
Less than
Discount
Less than
Greater than
Discount
Answer:
Explanation:
pending
A. B. C. D.
NEW QUESTION # 35
The economic order quantity for inventory is higher for an organization that has:
- A. A higher purchase price per unit of inventory.
- B. Lower annual unit sales.
- C. Higher fixed inventory ordering costs.
- D. Higher annual carrying costs as a percentage of inventory value.
Answer: C
NEW QUESTION # 36
Minimizing the likelihood of unauthorized editing of production programs, job control language, and operating system software best be accomplished by:
- A. Compliance reviews.
- B. Network security audits.
- C. Database access reviews
- D. Change control procedures.
Answer: D
Explanation:
Program change control includes 1) maintaining records of change authorizations, code changes, and test results, 2) adhering to a systems development methodology including documentation); 3) authorizing changeovers of subsidiary and headquarters' interfaces; and 4) restricting access to authorized source and executable codes.
NEW QUESTION # 37
All of the following are stages of the business cycle except:
- A. Acceleration.
- B. Recovery.
- C. Boom, or peak.
- D. Trough.
Answer: A
Explanation:
A business cycle has four stages: the trough, recovery, peak, and recession. Acceleration is not one of the stages.
NEW QUESTION # 38
If the probability of hot weather, given a hot weather forecast, is 50%, how much would the vendor be willing to pay for the forecast?
- A. US $1,000
- B. US $300
- C. US $600
- D. US $500
Answer: B
Explanation:
If the weather is hot and coffee is served, the vendor earns US $1,900. If the vendor knows the weather will be hot, she would sell soft drinks and make U $2,500, a US $600 increase.
Thus, the vendor should be willing to pay up to U $600 for perfect information regarding hot weather. However, if the forecasts are only 50% accurate, the information is not perfect. Accordingly, the vendor should be willing to pay only U $300 the U $600 potential increase
in profits 50%) for the sometimes accurate forecasts.
NEW QUESTION # 39
Which of the following best describes the lessee's accounting for operating and finance leases?
- A. Operating
Finance - B. Not capitalized
Capitalized - C. Capitalized
Capitalized - D. Not capitalized
Not capitalized
Capitalized
Not capitalized
Answer: A
NEW QUESTION # 40
Which of the following statements regarding program change management is not correct?
- A. In order to protect the production environment, changes must be managed in a repeatable, defined, and predictable manner.
- B. The degree of risk associated with a proposed change determines if the change request requires authorization.
- C. The goal of the change management process is to sustain and improve organizational operations.
- D. All changes should be tested in a non-production environment before migrating to the production environment.
Answer: B
Explanation:
Explanation/Reference:
NEW QUESTION # 41
How do data analysis technologies affect internal audit testing?
- A. They allow greater insight into high risk areas.
- B. They increase the internal auditor's objectivity
- C. They improve the effectiveness of spot check testing techniques
- D. They reduce the overall scope of the audit engagement.
Answer: A
NEW QUESTION # 42
Which of the following is a systems software control?
- A. Ensuring that all user requirements are documented
- B. Performing of intrusion testing on a regular basis
- C. Housing servers with sensitive software away from environmental hazards
- D. Restricting server room access to specific individuals
Answer: B
NEW QUESTION # 43
In the standard regression equation y- a + bx, how is the letter ￡> best described?
- A. Dependent variable.
- B. Slope of the regression line.
- C. Independent variable.
- D. Y intercept.
Answer: B
Explanation:
In the standard regression equation, b is the slope of the regression line.
NEW QUESTION # 44
One of the main reasons that implementation of a total quality management (TQM) program works better through the use of teams is:
- A. Employee motivation is always higher for team members than for individual contributors.
- B. Teams are more efficient and help an organization reduce its staffing.
- C. Teams are a natural vehicle for sharing ideas, which leads to process improvement.
- D. The use of teams eliminates the need for supervision, thereby allowing a company to reduce staffing.
Answer: C
Explanation:
TQM promotes teamwork by modifying or eliminating traditional (and rigid) vertical hierarchies and instead forming flexible groups of specialists. Quality circles, cross-functional teams, and self-managed teams are typical formats. Teams are an excellent means of encouraging the sharing of ideas and removing process improvement obstacles.
NEW QUESTION # 45
Finance and operating leases differ in that the lesser:
- A. Is using the lease as a source of financing only under an operating lease.
- B. Finances the transaction through the leased asset only under a finance lease.
- C. Obtains use of the asset only under a finance lease.
- D. Makes rent payments that are actually installment payments constituting a payment of both principal and interest only under a finance lease.
Answer: B
Explanation:
A lease is a rental or sub-purchase arrangement between a lesser the owner or seller of the property) and a lesser the renter or purchaser). The issue in all leases is whether the risks and rewards of ownership have been transferred from the lesser to the lessee. If so, the lease should be accounted for as a sale-purchase, i.e., a finance lease. If the risks and rewards of ownership have not transferred, the lease is a rental arrangement and is called an operating lease. In effect, the lesser provides financing for an installment purchase, and the lessee's payments include both principal and interest components.
NEW QUESTION # 46
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To be eligible to sit for the IIA-CIA-Part3 exam, candidates must have completed the IIA-CIA-Part1 and IIA-CIA-Part2 exams. The IIA-CIA-Part3 exam consists of 100 multiple-choice questions and is timed for 2.5 hours. The passing score for the exam is 600 out of 800.
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