Free IIA IIA-CIA-Part3-3P Practice Questions 2026 - Page 14

Which of the following budgets must be prepared first?

A. Cash budget.

B. Production budget.

C. Sales budget.

D. Selling and administrative expenses budget.

Which of the following is a role of the board of directors in the governance process?

A. Conduct periodic assessments of the organization's governance systems.

B. Obtain assurance concerning the effectiveness of the organization's governance systems.

C. Implement an effective system of internal controls to support the organization's governance systems.

D. Review and approve operational goals and objectives.

An organization is projecting sales of 100,000 units, at a unit price of $12. Unit variable costs are $7. If fixed costs are $350,000, what is the projected total contribution margin?

A. $350,000

B. $500,000

C. $850,000

D. $1,200,000

Which of the following best describes an objective for an audit of an environmental management system?

A. To assess whether an annual control review is necessary.

B. To determine conformance with requirements and agreements.

C. To evaluate executive management oversight.

D. To promote environmental awareness.

Which of the following statements pertaining to a market skimming pricing strategy is not true?

A. The strategy is favored when unit costs fall with the increase in units produced.

B. The strategy is favored when buyers are relatively insensitive to price increases.

C. The strategy is favored when there is insufficient market capacity and competitors cannot increase market capacity.

D. The strategy is favored when high price is perceived as high quality.

For a multinational organization, which of the following is a disadvantage of an ethnocentric staffing policy?

1) It significantly raises compensation and staffing costs.

2) It produces resentment among the organization's employees in host countries.

3) It limits career mobility for parent-country nationals.

4) It can lead to cultural myopia.

A. 1 and 4 only

B. 2 and 3 only

C. 1, 2, and 3 only

D. 1, 2, and 4 only

Which of the following is useful for forecasting the required level of inventory?

1) Statistical modeling.

2) Information about seasonal variations in demand.

3) Knowledge of the behavior of different business cycles.

4) Pricing models linked to seasonal demand.

A. 1 and 2 only

B. 2 and 3 only

C. 1, 2, and 3 only

D. 1, 2, 3, and 4

The economic order quantity can be calculated using the following formula:

Which of the following describes how the optimal order size will change if the annual demand increases by 36 percent?

A. Decrease by about 17 percent.

B. Decrease by about 7 percent.

C. Increase by about 7 percent.

D. Increase by about 17 percent.

Which of the following is a product-oriented definition of a business rather than a marketoriented definition of a business?

A. We are a people-and-goods mover.

B. We supply energy.

C. We make movies.

D. We provide climate control in the home.

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.