IIA-CIA-PART3 practice questions 91–100

1. Question 91 · 336 in bank

   A new manager received computations of the internal rate of return regarding his project proposal. What should the manager compare the computation results to in order to determine whether the project is potentially acceptable?

   • ACompare to the annual cost of capital.
   • BCompare to the annual interest rate.
   • CCompare to the required rate of return
   • DCompare to the net present value.

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   Answer: D

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2. Question 92 · 336 in bank

   An internal auditor is reviewing physical and environmental controls for an IT organization. Which control activity should not be part of this review?

   • ADevelop and test the organization's disaster recovery plan.
   • BInstall and test fire detection and suppression equipment.
   • CRestrict access to tangible IT resources.
   • DEnsure that at least one developer has access to both systems and operations.

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   Answer: D

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3. Question 93 · 336 in bank

   Which of the following statements is true regarding cost-volume-profit analysis?

   • AContribution margin is the amount remaining from sales revenue after fixed expenses have been deducted.
   • BBreakeven point is the amount of units sold to cover variable costs.
   • CBreakeven occurs when the contribution margin covers fixed costs.
   • DFollowing breakeven, net operating income will increase by the excess of fixed costs less the variable costs per units sold.

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   Answer: A

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4. Question 94 · 336 in bank

   According to the International Professional Practices Framework, internal auditors who are assessing the adequacy of organizational risk management processes should not:

   • ARecognize that organizations use different techniques for managing risk.
   • BSeek assurance that the key objectives of the risk management processes are being met.
   • CDetermine and accept the level of risk for the organization.
   • DTreat the evaluation of risk management processes differently from the risk analysis used to plan audit engagements.

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   Answer: C

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5. Question 95 · 336 in bank

   Which audit approach should be employed to test the accuracy of information housed in a database on an un-networked computer?

   • ASubmit batches of test transactions through the current system and verify with expected results.
   • BUse a test program to simulate the normal data entering process.
   • CSelect a sample of records from the database and ensure it matches supporting documentation.
   • DEvaluate compliance with the organization's change management process.

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   Answer: C

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6. Question 96 · 336 in bank

   Which of the following statements accurately describes the responsibility of the internal audit activity (IAA) regarding IT governance? 1. The IAA does not have any responsibility because IT governance is the responsibility of the board and senior management of the organization. 2. The IAA must assess whether the IT governance of the organization supports the organizations strategies and objectives. 3. The IAA may assess whether the IT governance of the organization supports the organizations strategies and objectives. 4. The IAA may accept requests from management to perform advisory services regarding how the IT governance of the organization supports the organizations strategies and objectives.

   • A1 only
   • B4 only
   • C2 and 4
   • D3 and 4

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   Answer: C

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7. Question 97 · 336 in bank

   Which of the following statements is true regarding the "management-by-objectives" method?

   • AManagement by objectives is most helpful in organizations that have rapid changes.
   • BManagement by objectives is most helpful in mechanistic organizations with rigidly defined tasks.
   • CManagement by objectives helps organizations to keep employees motivated.
   • DManagement by objectives helps organizations to distinguish clearly strategic goals from operational goals.

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   Answer: D

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8. Question 98 · 336 in bank

   The head of the research and development department at a manufacturing organization believes that his team lacks expertise in some areas, and he decides to hire more experienced researchers to assist in the development of a new product. Which of the following variances are likely to occur as the result of this decision? 1. Favorable labor efficiency variance. 2. Adverse labor rate variance. 3. Adverse labor efficiency variance. 4. Favorable labor rate variance.

   • A1 and 2.
   • B1 and 4.
   • C3 and 4.
   • D2 and 3.

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   Answer: C

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9. Question 99 · 336 in bank

   According to Maslow's hierarchy of needs theory, which of the following best describes a strategy where a manager offers an assignment to a subordinate specifically to support his professional growth and future advancement?

   • AEsteem by colleagues.
   • BSelf-fulfillment.
   • CSense of belonging in the organization.
   • DJob security.

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   Answer: B

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10. Question 100 · 336 in bank

    The internal audit activity completed an initial risk analysis of the organization's data storage center and found several areas of concern. Which of the following is the most appropriate next step?

    • ARisk response.
    • BRisk identification.
    • CIdentification of context.
    • DRisk assessment.

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    Answer: D

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IIA-CIA-PART3 practice, question 91. 336 questions available.