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IIA-CIA-Part3-3P IIA CIA Exam Part Three: Business Knowledge for Internal Auditing Free Practice Exam Questions (2025 Updated)

Prepare effectively for your IIA IIA-CIA-Part3-3P CIA Exam Part Three: Business Knowledge for Internal Auditing certification with our extensive collection of free, high-quality practice questions. Each question is designed to mirror the actual exam format and objectives, complete with comprehensive answers and detailed explanations. Our materials are regularly updated for 2025, ensuring you have the most current resources to build confidence and succeed on your first attempt.

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Total 488 questions

An internal auditor reviews a data population and calculates the mean, median, and range.

What is the most likely purpose of performing this analytic technique?

A.

To inform the classification of the data population.

B.

To determine the completeness and accuracy of the data.

C.

To identify whether the population contains outliers.

D.

To determine whether duplicates in the data inflate the range.

What would be the effect if an organization paid one of its liabilities twice during the year in error?

A.

Assets liabilities and owners' equity would be understated

B.

Assets net income and owners' equity would be unaffected

C.

Assets and liabilities would be understated

D.

Assets net income and owners' equity would be understated, but liabilities would be overstated

A clothing company sells shirts for $8 per shirt. In order to break even, the company must sell 25,000 shirts. Actual sales total $300,000.

What is margin of safety sales for the company?

A.

$100,000

B.

$200,000

C.

$275,000

D.

$500,000

Which of the following application controls can be defined as controls that monitor data Being processed and in storage to ensure it remains consistent and correct?

A.

Input controls

B.

Output controls

C.

Integrity controls

D.

Processing controls

During which phase of the contacting process ate contracts drafted for a proposed business activity?

A.

Initiation phase

B.

Bidding phase

C.

Development phase

D.

Management phase

Which of the following is a project planning methodology that involves a complex series ot required simulations to provide information about schedule risk?

Which of me following represents an inventory costing technique that can be manipulated by management to boost net income by selling units purchased at a low cost?

A.

First-in first-out method (FIFO)

B.

Last-in first-out method (LIFO)

C.

Specific identification method

D.

Average-cost method

Management has established a performance measurement focused on the accuracy of disbursements The disbursement statistics, provided daily to all accounts payable and audit staff, include details of payments stratified by amount and frequency Which of the following is likely to be the greatest concern regarding this performance measurement?

A.

Articulation of the data.

B.

Availability of the data

C.

Measurability of the data

D.

Relevance of the data

A bond that matures after one year has a face value of $250,000 and a coupon of $30,000. If the market price of the bond is $265,000, which of the following would be the market interest rate?

A.

Less than 12 percent.

B.

12 percent.

C.

Between 12.01 percent and 12.50 percent.

D.

More than 12.50 percent.

According to HA guidance or IT which of the following spreadsheets is most likely to be considered a high-risk user-develop application?

A.

A revenue calculation spreadsheet supported with price and volume reports from the production department

B.

An asset retirement calculation spreadsheet comprised of multiple formulas and assumptions

C.

An ad-hoc inventory listing spreadsheet comprising details of written-off inventory quantitates

D.

An accounts receivable reconciliation spreadsheet used by the accounting manager to verify balances.

Which of the following should internal auditors be attentive of when reviewing personal data consent and opt-in/opt-out management process?

A.

Whether customers are asked to renew their consent for their data processing at least quarterly.

B.

Whether private data is processed in accordance with the purpose for which the consent was obtained.

C.

Whether the organization has established explicit and entitywide policies on data transfer to third parties.

D.

Whether customers have an opportunity to opt-out the right to be forgotten from organizational records and systems.

The management of working capital is most crucial for which of the following aspects of business?

A.

Liquidity.

B.

Profitability.

C.

Solvency.

D.

Efficiency.

Which of the following is a key responsibility of a database administrator?

A.

Troubleshoot end user problems

B.

Provide production support.

C.

Provide physical security of databases

D.

Maintain database integrity

A retail organization is considering acquiring a composite textile company. The retailer's due diligence team determined the value of the textile company to be $50 million. The financial experts forecasted net present value of future cash flows to be $60 million. Experts at the textile company determined their company's market value to be $55 million if purchased by another entity. However, the textile company could earn more than $70 million from the retail organization due to synergies. Therefore, the textile company is motivated to make the negotiation successful. Which of the following approaches is most likely to result in a successful negotiation?

A.

Develop a bargaining zone that lies between $50 million and $70 million and create sets of outcomes between $50 million and $70 million.

B.

Adopt an added-value negotiating strategy, develop a bargaining zone between $50 million and $70 million, and create sets of outcomes between $50 million and $70 million.

C.

Involve a mediator as a neutral party who can work with the textile company's management to determine a bargaining zone.

D.

Develop a bargaining zone that lies between $55 million and $60 million and create sets of outcomes between $55 million and $60 million.

In which type of business environment are price cutting strategies and franchising strategies most appropriate?

A.

Embryonic, focused.

B.

Fragmented, decline.

C.

Mature, fragmented.

D.

Competitive, embryonic.

Which of the following application software features is the least effective control to protect passwords?

A.

Suspension of user IDs after a user's repeated attempts to sign on with an invalid password.

B.

Encryption of passwords prior to their transmission or storage.

C.

Forced change of passwords after a designated number of days.

D.

Automatic logoff of inactive users after a specified time period of inactivity.

Which of the following describes the result if an organization records merchandise as a purchase, but fails to include it in the closing inventory count?

A.

The cost of goods sold for the period will be understated.

B.

The cost of goods sold for the period will be overstated.

C.

The net income for the period will be understated.

D.

There will be no effect on the cost of goods sold or the net income for the period.

The percentage of sales method, rather than the percentage of receivables method, would be used to estimate uncollectible accounts if an organization seeks to:

A.

Use an aging schedule to more closely estimate uncollectible accounts.

B.

Eliminate the need for an allowance for doubtful accounts.

C.

Emphasize the accuracy of the net realizable value of the receivables on the balance sheet.

D.

Use a method that approximates the matching principle.

Where complex problems need to be addressed, which of the following communication networks would be most appropriate?

A.

Chain.

B.

All-channel.

C.

Circle.

D.

Wheel.

Which of the following describes the free trade zone in an e-commerce environment?

A.

Zone that separates an organization's servers from outside forces.

B.

Area in which messages are scrutinized to determine if they are authorized.

C.

Area where communication and transactions occur between trusted parties.

D.

Zone where data is encrypted, users are authenticated, and user traffic is filtered.

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