IIA iia cia part3 3p practice test

Which of the following would provide the most relevant assurance that the application under
development will provide maximum value to the organization?

• A. Use of a formal systems development lifecycle.
• B. End-user involvement.
• C. Adequate software documentation.
• D. Formalized non-regression testing phase.

Which of the following statements is true regarding outsourced business processes?

• A. Outsourced business processes should not be considered in the internal audit universe because the controls are owned by the external service provider.
• B. Generally, independence is improved when the internal audit activity reviews outsourced business processes.
• C. The key controls of outsourced business processes typically are more difficult to audit because they are designed and managed externally.
• D. The system of internal controls may be better and more efficient when the business process is outsourced compared to internally sourced.

Which stage in the industry life cycle is characterized by many different product variations?

• A. Introduction.
• B. Growth.
• C. Maturity.
• D. Decline.

A brand manager in a consumer food products organization suspected that several days of the point-
of-sale data on the spreadsheet from one grocery chain were missing. The best approach for
detecting missing rows in spreadsheet data would be to:

• A. Sort on product identification code and identify missing product identification codes.
• B. Review store identification code and identify missing product identification codes.
• C. Compare product identification codes for consecutive periods.
• D. Compare product identification codes by store for consecutive periods.

An organization's balance sheet indicates that the total asset amount and the total capital stock
amount remained unchanged from one year to the next, and no dividends were declared or paid.
However, the organization reported a loss of $200,000. Which of the following describes the most
likely year-over-year change to the organization's total liabilities and total stockholder equity?

• A. The total liabilities and total stockholder equity both increased.
• B. The total liabilities and total stockholder equity both decreased.
• C. The total liabilities decreased, and the total stockholder equity increased.
• D. The total liabilities increased, and the total stockholder equity decreased.

Which of the following describes a typical desktop workstation used by most employees in their daily
work?

• A. Workstation contains software that prevents unauthorized transmission of information into and out of the organization's network.
• B. Workstation contains software that controls information flow between the organization's network and the Internet.
• C. Workstation contains software that enables the processing of transactions and is not shared among users of the organization's network.
• D. Workstation contains software that manages user's access and processing of stored data on the organization's network.

Which of the following would best prevent unauthorized external changes to an organization's data?

• A. Antivirus software, firewall, data encryption.
• B. Firewall, data encryption, backup procedures.
• C. Antivirus software, firewall, backup procedures.
• D. Antivirus software, data encryption, change logs.

Which of the following is always true regarding the use of encryption algorithms based on public key
infrastructure (PKI)?

• A. PKI uses an independent administrator to manage the public key.
• B. The public key is authenticated against reliable third-party identification.
• C. PKI's public accessibility allows it to be used readily for e-commerce.
• D. The private key uniquely authenticates each party to a transaction.

The decision to implement enhanced failure detection and back-up systems to improve data integrity
is an example of which risk response?

• A. Risk acceptance.
• B. Risk sharing.
• C. Risk avoidance.
• D. Risk reduction.

Preferred stock is less risky for investors than is common stock because:

• A. Common stock pays dividends as a stated percentage of face value.
• B. Common stock has priority over preferred stock with regard to earnings and assets.
• C. Preferred dividends are usually cumulative.
• D. Preferred stock with no conversion feature has a higher dividend yield than does convertible preferred stock.