PDF (New 2024) Actual IIA IIA-CIA-Part3 Exam Questions
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IIA-CIA-Part3 exam is an essential step for internal auditors looking to obtain the CIA designation. IIA-CIA-Part3 exam covers a broad range of business topics and requires a high level of knowledge and understanding. Passing the exam demonstrates a commitment to professionalism and a dedication to the field of internal auditing.
NEW QUESTION # 30
Company F produces and sells two products. Product A costs US $10 per unit and Product B costs US $5 per unit. Product A is selling very well, but sales of Product B are low. In order to increase sales of Product B, Company F has begun setting a price of US $13 for one of each.
What is the pricing method?
- A. By-product pricing.
- B. Product-bundle pricing.
- C. Value pricing.
- D. Collusive pricing.
Answer: B
Explanation:
Product-bundle pricing entails selling combinations of products at a price lower than the combined prices of the individual items. This strategy promotes sales of items consumers might riot otherwise buy.
NEW QUESTION # 31
Which of the following situations best applies to an organization that uses a project rather man a process to accomplish its business activities?
- A. A clothing company designs makes and sells a new item.
- B. A manufacturing organization acquires component parts from a contracted vendor
- C. A commercial constructor company is hired to build a warehouse.
- D. A city department sets up a new firefighter training program.
Answer: C
NEW QUESTION # 32
Which of the following statements most likely represents a disadvantage for an entity that keeps data files on a server rather than on a manual system?
- A. Random error associated with processing similar transactions in different ways is usually greater.
- B. It is usually easier for unauthorized persons to access and alter the files.
- C. Attention is focused on the accuracy of the programming process rather than errors in individual transactions.
- D. It is usually more difficult to compare recorded accountability with the physical count of assets.
Answer: B
Explanation:
In a manual system, one individual is usually assigned responsibility for maintaining and safeguarding the records. However, in a server environment, the data files may be subject to change by others without documentation or an indication of who made the changes.
NEW QUESTION # 33
Truth-in-lending laws most likely are intended to:
- A. Allow immediate wage garnishment by creditors.
- B. Prohibit the use of usurious interest rates.
- C. Disclose the finance charge and the annual percentage rate.
- D. Regulate the amount of interest that may be charged.
Answer: C
Explanation:
Truth-in-lending laws are disclosure statutes. They typically apply to creditors that extend consumer credit to individual debtors. Examples of disclosures for a closed-end credit transaction, e.g., the typical car loan, include the total finance charge. Annual percentage interest rate, amount financed, late charges, security interest held by the creditor, the number and amounts of payments, due dates, and the total amount of payments.
NEW QUESTION # 34
Which of the following conditions could lead an organization to enter into a new business through internal development rather than through acquisition?
- A. It is expected that there will be slow retaliation from incumbents.
- B. The condition of the economy is poor.
- C. The acquiring organization has information that the selling organization is weak.
- D. The number of bidders to acquire the organization for sale is low.
Answer: A
NEW QUESTION # 35
Under a value-added taxing system:
- A. Businesses must pay a tax only if they make a profit
- B. The consumer ultimately bears the incidence of the tax through higher prices.
- C. The amount of value added is the difference between an entity's sales and its cost of goods sold.
- D. Consumer savings are discouraged.
Answer: B
Explanation:
A value-added tax is based on consumption. The tax is levied on the value added to goods by each business unit in the production and distribution chain. It is the consumer who ultimately bears the incidence of the tax because businesses subject to the tax will raise prices to offset the operating cost of the tax.
NEW QUESTION # 36
A bond that matures after one year has a face value of S250,000 and a coupon of $30,000. if the market price of the bond is 5265,000, 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.
Answer: A
NEW QUESTION # 37
All of the following are alternative marketable securities suitable for investment except:
- A. Commercial paper.
- B. Convertible bonds.
- C. U.S. Treasury bills.
- D. Eurodollars.
Answer: B
Explanation:
Marketable securities are near-cash items used primarily for short-term investment. Examples include U.S. Treasury bills, Eurodollars. commercial paper, money-market mutual funds with portfolios of short-term securities, bankers' acceptances, floating rate preference stock, and negotiable CDs of U.S. banks. A convertible bond is not a shortterm investment because its maturity date is usually more than one year in the future and its price can be influenced substantially by changes in interest rates or by changes in the investee's stock price.
NEW QUESTION # 38
During the growth stage of a product's life cycle,
- A. There is little difference between competing products.
- B. New product models and features are introduced.
- C. The quality of the products becomes more variable and products are less differentiated.
- D. The quality of products is poor.
Answer: B
Explanation:
In the growth stage, sales and profits increase rapidly, cost per customer decreases, customers are early adopters, new competitors enter an expanding market, new product models and features are introduced, and promotion spending declines or remains stable. The entity enters new market segments and distribution channels and attempts to build brand loyalty and achieve the maximum share of the market. Thus, prices are set to penetrate the market, distribution channels are extended, and the mass market is targeted through advertising. The strategy is to advance by these means and by achieving economies of productive scale.
NEW QUESTION # 39
In its first year of operations, an entity had US $50,000 of fixed operating costs. It sold 10,000 units at a US $10 unit price and incurred variable costs of US $4 per unit. If all pnc es and costs will be the same in the second year and sales are projected to rise to 25,000 units, what will the degree of operating leverage the extent to which fixed costs are used in the entity's operations) be in the second yc _u?
- A. 2.0
- B. 1 25
- C. 6.0
- D. 1 50
Answer: D
Explanation:
The DOL may be calculated as the contribution margin sales - variable cost) divided by the excess of the contribution margin ever It <:ed costs. The contribution margin is US $150.000 [25.000 units x $10 unit price - $4 unit variable cost)]. Hence, the DOL in the second year is 1.50 [US $150,000 CM / $150,000 - $50,000 FC)].
NEW QUESTION # 40
Making segment disclosures is an advantage to a company because it.
- A. Masks the effect of intersegment transfers.
- B. Provides competitors with comparative information on the company's performance.
- C. Facilitates evaluation of company management by providing l data on particular segments.
- D. Eliminates the interdependence of segments.
Answer: C
Explanation:
Segment reporting is an aspect of responsibility accounting. It facilitates evaluation of company management and of the quality of the economic Investment in particular segments.
NEW QUESTION # 41
One of the main reasons total quality management (TQM) can be used as a strategic weapon is that:
- A. Introducing new products can lure customers away from competitors.
- B. TQM provides a comprehensive planning process for a business.
- C. The cumulative improvement from a company's TQM efforts cannot readily be copied by competitors.
- D. Reduced costs associated with better quality can support higher shareholder dividends.
Answer: C
Explanation:
TQM is a comprehensive approach to quality. It treats the pursuit of quality as a basic organizational function that is as important as production or marketing. Because TQM affects every aspect of the organization's activities, it is part of the organizational culture. Thus, the cumulative effect of TQM's continuous improvement process can attract and hold
customers and cannot be duplicated by competitors.
NEW QUESTION # 42
Which of the following should be established by management during implementation of big data systems to enable ongoing production monitoring?
- A. Master data management
- B. Key performance indicators
- C. Change and patch management
- D. Reports of software customization
Answer: B
NEW QUESTION # 43
An intruder posing as the organization's CEO sent an email and tricked payroll staff into providing employees' private tax information. What type of attack was perpetrated?
- A. Spoofing attack.
- B. Spear phishing attack.
- C. Brute force attack.
- D. Boundary attack.
Answer: B
NEW QUESTION # 44
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. Review store identification code and identify missing product identification codes.
- B. Compare product identification codes by store for consecutive periods.
- C. Sort on product identification code and identify missing product identification codes.
- D. Compare product identification codes for consecutive periods.
Answer: B
NEW QUESTION # 45
The economic order quantity is the size of the order that minimizes total inventory costs which include ordering and holding carrying) costs. It can be calculated using the formula
If Q = order size in units, D = annual demand in units, p = cost per purchase order, s = carrying cost per year for one unit of inventory. If the annual demand decreases by 369/o the optimal order size will:
- A. Increase by 20%.
- B. Increase by 6%. Decrease by 6%.
- C. Decrease by 20%.
Answer: C
Explanation:
D decreases by 36%, that is, from 100% to 64%. Because .64 is the square of .8, the EOQ for 64D Q~) equals 80% of the EOQ for D (Q).
NEW QUESTION # 46
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