IIA-CIA-PART3 practice questions 131–140

1. Question 131 · 336 in bank

   Which of the following is true regarding the COSO enterprise risk management framework?

   • AThe framework categorizes an organization's objectives to distinct, non overlapping objectives.
   • BControl environment is one of the framework's eight components.
   • CThe framework facilitates effective risk management, even if objectives have not been established.
   • DThe framework integrates with, but is not dependent upon, the corresponding internal control framework.

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   Answer: D

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2. Question 132 · 336 in bank

   Which of the following analytical techniques would an internal auditor use to verify that none of an organization's employees are receiving fraudulent invoice payments?

   • APerform gap testing.
   • BJoin different data sources.
   • CPerform duplicate testing.
   • DCalculate statistical parameters.

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   Answer: C

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3. Question 133 · 336 in bank

   The economic order quantity can be calculated using the following formula:

   

   Which of the following describes how the optimal order size will change if the annual demand increases by 36 percent?

   • ADecrease by about 17 percent.
   • BDecrease by about 7 percent.
   • CIncrease by about 7 percent.
   • DIncrease by about 17 percent.

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   Answer: D

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4. Question 134 · 336 in bank

   An internal auditor performed a review of IT outsourcing and found that the service provider was failing to meet the terms of the service level agreement. Which of the following approaches is most appropriate to address this concern?

   • AThe organization should review the skill requirements and ensure that the service provider is maintaining sufficient expertise and retaining skilled resources.
   • BThe organization should proactively monitor the performance of the service provider, escalate concerns, and use penalty clauses in the contract where necessary.
   • CThe organization should ensure that there is a clear management communication strategy and path for evaluating and reporting on all outsourced services concerns.
   • DThe organization should work with the service provider to review the current agreement and expectations relating to objectives, processes, and overall

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   Answer: B

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5. Question 135 · 336 in bank

   Which of the following is a characteristic of big data?

   • ABig data is often structured.
   • BBig data analytic results often need to be visualized.
   • CBig data is often generated slowly and is highly variable.
   • DBig data comes from internal sources kept in data warehouses.

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   Answer: C

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6. Question 136 · 336 in bank

   A chief audit executive (CAE) was asked to participate in the selection of an external auditor. Which of the following would not be a typical responsibility for the CAE?

   • AEvaluate the proposed external auditor fee.
   • BRecommend criteria to be used in the selection process.
   • CDevelop appropriate performance metrics.
   • DMonitor the work of the external auditors.

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   Answer: C

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7. Question 137 · 336 in bank

   Senior management is trying to decide whether to use the direct write-off or allowance method for recording bad debt on accounts receivables. Which of the following would be the best argument for using the direct write-off method?

   • AIt is useful when losses are considered insignificant.
   • BIt provides a better alignment with revenue.
   • CIt is the preferred method according to The IIA.
   • DIt states receivables at net realizable value on the balance sheet.

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   Answer: B

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8. Question 138 · 336 in bank

   Which of the following performance measures disincentivizes engaging in earnings management?

   • ALinking performance to profitability measures such as return on investment.
   • BLinking performance to the stock price.
   • CLinking performance to quotas such as units produced.
   • DLinking performance to nonfinancial measures such as customer satisfaction and employees training.

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   Answer: A

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9. Question 139 · 336 in bank

   Which of the following is the most likely reason an organization may decide to undertake a stock split?

   • ATo keep stock price constant.
   • BTo keep shareholders' equity constant.
   • CTo increase shareholders' equity.
   • DTo enhance the stock liquidity.

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   Answer: D

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10. Question 140 · 336 in bank

    An organization's board of directors is particularly focused on positioning the organization as a leader in the industry and beating the competition. Which of the following strategies offers the greatest alignment with the board's focus?

    • ADivesting product lines expected to have negative profitability.
    • BIncreasing the diversity of strategic business units.
    • CIncreasing investment in research and development for a new product.
    • DRelocating the organization's manufacturing to another country.

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    Answer: B

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IIA-CIA-PART3 practice, question 131. 336 questions available.