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

A holding company set up a centralized group technology department, using a local area network with a mainframe computer to process accounting information for all companies within the group. An internal auditor would expect to find all of the following controls within the technology department except:

According to IIA guidance, which of the following steps are most important for an internal auditor to perform when evaluating an organization's social and environmental impact on the local community?

1) Determine whether previous incidents have been reported, managed, and resolved.

2) Determine whether a business contingency plan exists.

3) Determine the extent of transparency in reporting.

4) Determine whether a cost/benefit analysis was performed for all related projects.

Which of the following control techniques would minimize the risk of interception during transmission in an electronic data interchange system?

1) Encryption.

2) Traffic padding.

3) Edit checks.

4) Structured data format.

Which of the following strategies is most appropriate for an industry that is in decline?

Which of the following conflict resolution methods should be applied when the intention of the parties is to solve the problem by clarifying differences and attaining everyone's objectives?

Refer to the exhibit.

If the profit margin of an organization decreases, and all else remains equal, which of the following describes

how the "Funds Needed" line in the graph below will shift?

Which of the following methods, if used in conjunction with electronic data interchange (EDI), will improve the organization's cash management program, reduce transaction data input time and errors, and allow the organization to negotiate discounts with EDI vendors based on prompt payment?

Which of the following factors is considered a disadvantage of vertical integration?

Which of the following is a key characteristic of a zero-based budget?

A department purchased one copy of a software program for internal use. The manager of the department installed the program on an office computer and then made two complete copies of the original software.

Copy 1 was solely for backup purposes.

Copy 2 was for use by another member of the department.

In terms of software licenses and copyright law, which of the following is correct?

According to IIA guidance, which of the following corporate social responsibility (CSR) activities is appropriate for the internal audit activity to perform?

The economic order quantity for inventory is higher for an organization that has:

In an analysis of alternative credit-management policies, which of the following components will cause the net present value of receivables on credit sales to increase, if everything else remains constant?

Technological uncertainty, subsidy, and spin-offs are usually characteristics of:

An organization is considering mirroring the customer data for one regional center at another center. A disadvantage of such an arrangement would be:

An organization produces two products, X and Y. The materials used for the production of both products are limited to 500 kilograms (kg) per month. All other resources are unlimited and their costs are fixed. Individual product details are as follows:

Product X

Product Y

Selling price per unit

$10

$13

Materials per unit (at $1/kg)

2 kg

6 kg

Monthly demand

100 units

120 units

In order to maximize profit, how much of product Y should the organization produce each month?

The audit committee of a global corporation has mandated a change in the organization's business ethics policy. Which of the following approaches describes the best way to accomplish the policy's diffusion worldwide?

Which of the following is the best approach to overcome entry barriers into a new business?

Which of the following IT strategies is most effective for responding to competitive pressures created by the marketplace?