[Mar 22, 2023] Latest Questions IIA-CIA-Part3 Guide to Prepare Free Practice Tests
Reliable IIA-CIA-Part3 Dumps Questions Available as Web-Based Practice Test Engine
NEW QUESTION 58
The procedure employed in zero-based budgeting is to:
- A. Ascertain the outputs that are desired and work backward to determine the amount of inputs that will be required to generate the desired outputs.
- B. Budget from the ground up whereby every proposed expenditure for every unit is reviewed as though the budget was being prepared for the very first time.
- C. Require managers to establish priorities by including a description of what activities or changes would occur if the budget were increased and decreased by a fixed percentage amount.
- D. Review the prior period's budget along with actual results for that period and the actins for the coming period to develop more realistic budget amounts for the coming period.
Answer: B
Explanation:
Zero-based budgeting treats the budget as if it were being initiated for the first time. Thus, all costs are reexamined each period. Beginning with the smallest budgetary subunits, managers must determine objectives, operations, and cost for all activities.
Alternative methods of conducting each activity are considered, different levels of service are evaluated for each activity, means of measuring work and performance are determined, and activities are ranked in order of importance to the organization.
NEW QUESTION 59
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. Eliminate the need for an allowance for doubtful accounts.
- B. Use an aging schedule to more closely estimate uncollectible 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.
Answer: D
NEW QUESTION 60
Refer to the exhibit.
A company's financial balance sheet is presented below:
The company has net working capital of:
- A. $490
- B. $350
- C. $160
- D. $210
Answer: D
NEW QUESTION 61
Which of the following is a characteristic of just-in-time inventory management systems?
- A. They do not really increase overall economic efficiency because they merely shift inventory levels further up the supply chain.
- B. Users determine the optimal level of safety stocks.
- C. They are applicable only to large organizations.
- D. They rely heavily on high quality materials.
Answer: D
NEW QUESTION 62
All of the following are potential security issues for e-commerce except:
- A. Proliferation of computer viruses.
- B. Verification of payment data.
- C. Determining who may rightfully make transaction decisions.
- D. Correct identification of transacting parties.
Answer: A
Explanation:
E-commerce is the purchase and sale of goods and services by electronic means. Ecommerce may occur via online transactions on public networks electronic data interchange EDI), and email. E- commerce security issues include the correct identification of transacting parties authentication), determining who may rightfully make decisions authorization), and verification of payment data. While proliferation of computer viruses is a general security issue with regard to information systems, it is not a specific risk associated with e- commerce.
NEW QUESTION 63
Which of the following project scheduling techniques is commonly used in total quality management for simplifying work processes?
- A. Flowcharting.
- B. Program evaluation and review technique.
- C. Gantt charts.
- D. Critical path method.
Answer: A
Explanation:
Flowcharting is commonly used in computer programming for determining program logic and in total quality management for simplifying work processes. However, they are also used for establishing the desirable sequence of activities and decisions.
NEW QUESTION 64
An organization uses the management-by-objectives method whereby employee performance is based on defined goals. Which of the following statements is true regarding this approach?
- A. It is a more successful approach when adopted by mechanistic organizations.
- B. It is mere successful when goal setting is performed not only by management, but by all team members, including lower-level staff.
- C. It is particularly successful in environments that are prone to having poor employer-employee relations.
- D. It is particularly helpful to management when the organization is facing rapid change.
Answer: B
NEW QUESTION 65
A disadvantage of separating performance evaluations from compensation-increase
decisions is that:
- A. The employee's performance evaluation does not consider the financial status of the company overall.
- B. Employees may not be motivated by good appraisals.
- C. Not enough emphasis is placed on short-run performance.
- D. Financial rewards may lose their motivational effect.
Answer: B
Explanation:
The employee may not be motivated immediately by a good appraisal because of the delay in receipt of any monetary reward. The evaluation also may not be taken as seriously by the employee if compensation is not correlated with performance.
NEW QUESTION 66
The network below describes the interrelationships of several activities necessary to complete a project. The arrows represent the activities. The numbers between the arrows indicate the number of months to complete each activity. The shortest time to complete the project is:
- A. 8 months.
- B. 6 months.
- C. 5 months.
- D. 14 months.
Answer: A
Explanation:
The longest, or critical, path in the network from node A) to node F) is path A- -D-F. All other paths are shorter than path A-C-D-F, so the activities along those paths can be completed before the activities along path A-C-D-F. Thus, the shortest time to complete the project is 8 months 3 + 3 + 2).
NEW QUESTION 67
Which combination below explains the impact of credit card interest incurred and paid during the period on1) equity on the balance sheet and2) the statement of cash flows?
- A. Option C
- B. Option A
- C. Option D
- D. Option B
Answer: D
Explanation:
Interest incurred is classified as interest expense on the income statement, which in turn reduces equity on the balance sheet by reducing retained earnings. Cash payments for
interest made by an entity that is not a financial institution may be classified on the statement of cash flows as an outflow of cash from operating or financing activities.
NEW QUESTION 68
The auditor determined that the risks associated with the EDI purchases were less than the risks associated with the purchases made through the traditional system. Which one of the following factors best supports this prioritization of risks?
- A. About half of the materials are purchased through EDI.
- B. The internal auditors were involved with systems development and testing of the EDI software.
- C. The external auditor did not examine EDI purchase controls during the annual financial audit.
- D. There are three vendors connected through EDI.
Answer: B
Explanation:
Sound controls mitigate the risks associated with EDI. The question states that the internal auditing department's prior involvement consisted of assessing and testing the EDI system. This review found no significant problems. Accordingly, the risk of the EDI system is decreased.
NEW QUESTION 69
The Entity has dividend-payout ratio of:
- A. 50.0%
- B. 40.0%
- C. 19.6%
- D. 28.6%
Answer: A
Explanation:
The dividend-payout ratio is the ratio of dividends paid to profit for the period. Hence, it equals 50.0% US $100 dividends $200 profit). An entity's financial statements for the current year are presented below:
NEW QUESTION 70
An organization accumulated the following data for the prior fiscal year:
Value of
Percentage of
Quarter
Output Produced
Cost X
1
$4,750,000
2.9
2
$4,700,000
3.0
3
$4,350,000
3.2
4
$4,000,000
3.5
Based on this data, which of the following describes the value of Cost X in relation to the value of Output Produced?
- A. Cost X is a semi-fixed cost.
- B. Cost X is a variable cost.
- C. Cost X is a fixed cost.
- D. Cost X and the value of Output Produced are unrelated.
Answer: C
NEW QUESTION 71
Which of the following describes a mechanistic organizational structure?
- A. Reliance on self-control tends to be low.
- B. Type of knowledge required tends to be broad and professional.
- C. Definition of assigned tasks tends to be broad and general.
- D. Primary direction of communication tends to be lateral.
Answer: A
NEW QUESTION 72
To reduce security exposure when transmitting proprietary data communication lines, a company should use:
- A. Asynchronous modems.
- B. Call-back procedures.
- C. Cryptographic devices.
- D. Authentication techniques
Answer: C
Explanation:
Encryption involves using a fixed algorithm to manipulate plaintext The information is sent in its manipulated form and the receiver translates the information back into plain text. Cryptographic devices protect data in transmission over communication lines.
NEW QUESTION 73
While auditing an organization's customer call center, an internal auditor notices that Key performance indicators show a positive trend, despite the fact that there have been increasing customer complaints over the same period. Which of the following audit recommendations would most likely correct the cause of this inconsistency?
- A. Review the call center script used by customer service agents to interact with callers, and update the script if necessary.
- B. Retrain call center staff on area processes and common technical issues that they will likely be asked to resolve.
- C. Be-emphasize the importance of call center employees completing a certain number of calls per hour.
- D. Increase the incentive for call center employees to complete calls quickly and raise the number of calls completed daily
Answer: A
NEW QUESTION 74
An entity that owns a new professional basketball team sells season tickets to its team's games. The season lasts from November through April with 10 games played each month. In Year 1. The entity collected US $3 million from season-ticket sales for the Year 1 - Year 2 season. Its fiscal year-end is December 31. Based on this information.
The enterprise should:
- A. Report income of US $1 million on its Year 2 income statement.
- B. Report income of US $3 million on its Year 1 income statement.
- C. Report a liability for unearned income of US $3 million on its December 31, Year 1, balance sheet.
- D. Report a liability for unearned income of US $2 million on its December 31, Year 1, balance sheet.
Answer: D
Explanation:
The collections represent a liability deferred income). The income recognition criteria are not met with respect to the season ticket collections until the receipt of future economic benefits is sufficiently certain. Such certainty exists with respect to collections related to the games played as of the balance sheet date. Accordingly, the entity should recognize US $1 million as income in Year 1 [(US $3,000,000 - 6 months) x 2 months]. The remaining US $2 million should be reported as a liability.
NEW QUESTION 75
The use of derivatives to either hedge or speculate results in:
- A. Offset risk when speculating and increased risk when hedging.
- B. Decreased risk regardless of motive.
- C. Offset risk when hedging and increased risk when speculating.
- D. Increased risk regardless of motive.
Answer: C
Explanation:
Derivatives, including options and futures, are contracts between the parties who contract. Unlike stocks and bonds, they are not claims on business assets. A futures contract is entered into as either a speculation or a hedge. Speculation involves the assumption of risk in the hope of gaining from price movements. Hedging is the process of using offsetting commitments to minimize or avoid the impact of adverse price movements.
NEW QUESTION 76
Assume that additional workers are hired for the bottleneck operation to expedite setups and materials handling. The cost of the additional workers is US $50,000 per year. As a result, the annual output of the bottleneck operation will increase by 500 units. The change in operating income attributable to the increase in workers is:
- A. US $36,000
- B. US $ 20,000)
- C. US $50,000
- D. US $ 14,000)
Answer: D
Explanation:
Operation 2 is the bottleneck because it is functioning at its capacity. The incremental annual throughput contribution revenues - direct materials costs) from adding workers to Operation 2 is US $36,000 [500 units x $120 unit price - $48 DPI per unit)]. Because the cost of the additional workers is US $50,000, the change in operating income is US $ 14,000). This information is relevant to a theory of constraints TOG) analysis. A manufacturer that can sell all of its output produces its sole product using three operations. Each unit sells for US $120, and direct materials costing US $48 per unit are added at the start of the first operation. Other variable costs are immaterial. The fallowing annual cost and capacity information is available concerning those operations:
NEW QUESTION 77
An internal audit activity is piloting a data analytics model, which aims to identify anomalies in payments to vendors and potential fraud indicators. Which of the following would be the most appropriate criteria for assessing the success of the piloted model?
- A. The number of criminal investigations initiated based on the outcomes of the model
- B. The development and maintenance costs associated with the model
- C. The feedback of auditors involved with developing the model.
- D. The percentage of cases flagged by the model and confirmed as positives.
Answer: D
NEW QUESTION 78
Which of the following is a noncash item?
- A. Depreciation expense.
- B. Administrative expense.
- C. Interest expense.
- D. Income tax expense.
Answer: D
Explanation:
Expenses are defined as decreases in economic benefits during the accounting period in the forum of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants." Expense includes losses. Thus, losses are not treated as separate elements. Expenses include items arising in the course of ordinary activities. Losses meet the definition of expenses but may or may not occur in the course of ordinary activities. For example, losses may result from the sale of noncurrent assets of from natural disasters.
NEW QUESTION 79
While auditing a marketing department, the internal auditor discovered that the product life cycle model was used to structure the marketing mix.
The manager has asked the auditor for advice about increasing advertising of various products. During which stage of the life cycle would it be appropriate to advertise that the company's product is the lowest price and best quality of all competitors?
- A. Introduction stage.
- B. Growth stage.
- C. Decline stage.
- D. Maturity stage.
Answer: D
Explanation:
The maturity stage is the ideal time for advertising lower prices and superior quality because this is the period during a product's life when competition is greatest. Due to the availability of many alternatives or substitutes, a firm has reasons to set itself apart. Because price and quality are both concerns of customers during the maturity stage, it is ideal for the firm to differentiate its product by advertising low prices and higher quality.
NEW QUESTION 80
Which of the following are intermediaries between sellers and buyers?
I. Agent
II. Broker
III. Consignee I. Consumer
- A. I and III only.
- B. I, II, and III only.
- C. I, II, III, and Isl.
- D. I and II only.
Answer: B
Explanation:
A distribution channel is a series of interdependent marketing institutions that facilitate the transfer of a product from producer seller) to consumer buyer). Intermediaries include merchant middlemen, agents, brokers, consignees, and facilitating intermediaries.
NEW QUESTION 81
......
Passing Score, Duration & Questions For The IIA CIA Part 3 Exam
Number of Questions: 100 questions
Time Duration: 120 minutes
The passing score: 70%
Languages: English
Things You Should Know about the IIA CIA Part 3 Exam
The IIA CIA Part 3 course is designed to help you pass the Part 3 exam in just two days. The course focuses on all the major topics that you need to be familiar with in order to pass the test.
It is important to keep in mind that while you are taking your test it is a good idea to take a break and relax as much as possible. Taking a break will help keep your mind off of how much time has passed since you last took a test. It also gives you an opportunity to get back on track and focus on what you are doing.
If you want to know more about our training programs and some of the other things that we offer then please visit our website. You can learn more about the different kinds of tests that we offer and the many types of training materials that we have available for your use. IIA CIA Part 3 exam dumps will help you prepare for the exam, and also help you to get the best score possible. We also offer free practice exams so that you can see if our training program is right for you.
Correct and Up-to-date IIA IIA-CIA-Part3 BrainDumps: https://www.verifieddumps.com/IIA-CIA-Part3-valid-exam-braindumps.html
Current IIA-CIA-Part3 dumps Preparation through Our Practice Test: https://drive.google.com/open?id=1DIP4wYc8SxYdCJvPPamJnS6YhhsXTByz
