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IIA-CIA-Part3 exam focuses on testing the candidate's understanding of essential business concepts and their application in the internal audit process. IIA-CIA-Part3 exam covers various topics, including strategic management, organizational behavior, finance and accounting, economics, and information technology. The objective of the exam is to evaluate the candidate's ability to apply these principles to perform effective internal audits and add value to the organization.

IIA Business Knowledge for Internal Auditing Sample Questions (Q41-Q46):

NEW QUESTION # 41
What ensures that a company is complying with the documented quality management system
QMS: procedures and ISO 9000 standards?

A. The registrar.
B. On-site inspections by an external auditor.
C. Management commitment.
D. The internal audit.

Answer: D

Explanation:
An important requirement of the ISO 9000 standards is the internal audit system. Internal audits assure that the company is complying with the documented QMS procedures and ISO 9000 standards.

NEW QUESTION # 42
Dale has 20 days to complete production of an order for an important customer. The customer wants 96 units of product that may be painted either red or white. The red units can be produced at a rate of 4 per day. The white units, because of a different quality of paint, can be produced at a rate of 7 per day. The materials for the red units cost US $80 each, while the white units cost US $120 each. Dale wants to keep costs at a minimum. What is the constraint that expresses the number of units to be produced?

A. (R/4) + (W+7) 20
B. 4R + 7W = 96
C. R+W=20
D. 4R + 7W = 20

Answer: A

Explanation:
The constraint function that expresses the number of units to be produced is R + W = 96, but that is not one of the answer choices. Another constraint is that the total quantities of red (R) and white (W) units must be produced in 20 or fewer days at a rate of 4 red units per day and 7 white units per day. Thus, the time constraint is (R / 4) + (W + 7) 20.

NEW QUESTION # 43
Which of the following control frameworks was acknowledged by the U.S. Securities and Exchange Commission as an appropriate model for designing internal controls under the requirements of the Sarbanes-Oxley Act of 2002?

A. COBIT
B. eSAC
C. COSO
D. GTAG

Answer: C

Explanation:
The importance and durability of the COSO Framework was reinforced when the U.S. Securities and Exchange Commission acknowledged it as an appropriate model for designing internal controls under the requirements of the Sarbanes-Oxley Act of 2002.

NEW QUESTION # 44
A conglomerate entity acquired 100% of the net assets of a target entity for US $900 cash. The target entity is balance sheet just prior to the acquisition is presented below.
The amount of goodwill to be recorded by the conglomerate entity related to its purchase of the target entity is:

A. US $200
B. US $(200)
C. US $50
D. None of the answers are correct

Answer: A

Explanation:
Goodwill is the excess of the cost over the net fair value of the acquired identifiable assets, liabilities, and contingent liabilities recognized. This net fair value equals the sum of cash, receivables, inventory, and PPE minus liabilities. Hence, the net fair value acquired is US $700 and goodwill is US $200$900 cost-$700).

NEW QUESTION # 45
If a system does not have a mainframe computer or a file server but does processing within a series of personal computers, the network is a(n):

A. Expert system.
B. Offline processing system.
C. Direct access system.
D. Peer-to-peer system.

Answer: D

Explanation:
A local area network is a user-controlled network that operates without the assistance of a common carrier. It can have several personal computers attached to a host computer, can be linked as part of several LANs that may or may not communicate with a host computer, or can be connected together but not connected to a host computer stand alone). A peer-to-peer network operates without a mainframe or file server.

NEW QUESTION # 46
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