Free IIA IIA-CIA-Part3-3P Practice Questions 2026 - Page 9
Ready for IIA-CIA-Part3-3P Exam?
This practice test is your final exam before the REAL exam
Dare to Take It?
Practice Questions
Topic 1: Exam Pool A
When developing an effective risk-based plan to determine audit priorities, an internal audit activity should start by:
A. Identifying risks to the organization's operations.
B. Observing and analyzing controls.
C. Prioritizing known risks.
D. Reviewing organizational objectives.
Explanation:
An effective risk‑based audit plan must align with the organization’s overall objectives because risks are defined as events that may affect the achievement of those objectives. Without first understanding what the organization aims to achieve, identifying and prioritizing risks lacks direction and relevance for audit resource allocation.
Correct Option:
D. Reviewing organizational objectives.
Correct because objectives form the foundation of any risk‑based audit planning. Only after reviewing objectives can an internal audit activity identify risks that could impede them, assess those risks, and prioritize audit engagements accordingly. This ensures audit efforts are directly linked to organizational success.
Incorrect Options:
A. Identifying risks to the organization's operations.
Incorrect. Risk identification should follow the review of objectives. Without knowing the objectives, an auditor cannot determine which operational risks are relevant or significant. Jumping to risk identification first may lead to missing key risks or focusing on low‑priority areas.
B. Observing and analyzing controls.
Incorrect. Control observation and analysis occur after risks have been identified and prioritized. Controls are designed to mitigate specific risks, so understanding risks must come first. Starting with controls reverses the logical sequence of risk‑based auditing.
C. Prioritizing known risks.
Incorrect. Prioritization can only happen after risks have been identified based on organizational objectives. Attempting to prioritize without a clear link to objectives may result in a plan that addresses lower‑impact risks while overlooking those most critical to achieving strategic goals.
Reference:
IIA Standard 2010 – “Planning”; IIA Practice Guide: “Developing the Internal Audit Strategic Plan”; IPPF – The International Professional Practices Framework.
A department purchased one copy of a software program for internal use. The manager of the department installed the program on an office computer and then made two complete copies of the original software.
Copy 1 was solely for backup purposes.
Copy 2 was for use by another member of the department.
In terms of software licenses and copyright law, which of the following is correct?
A. Both copies are legal.
B. Only copy 1 is legal.
C. Only copy 2 is legal.
D. Neither copy is legal.
When writing a business memorandum, the writer should choose a writing style that achieves all of the following except:
A. Draws positive attention to the writing style.
B. Treats all receivers with respect.
C. Suits the method of presentation and delivery.
D. Develops ideas without overstatement.
The audit committee of a global corporation has mandated a change in the organization's business ethics policy. Which of the following approaches describes the best way to accomplish the policy's diffusion worldwide?
A. Deploy the policy in the corporate headquarters' language, so everyone gets an unfiltered version simultaneously.
B. Introduce the policy region by region, using any lessons learned to change the subsequent version of the policy for the next area.
C. Consult with legal and operational management in each affected country to ensure the final version can be implemented globally, following audit committee approval.
D. Send the board-approved version of the policy to each country's senior leadership and empower them to tailor the policy to the local language and culture.
Which of the following statements about slack time and milestones are true?
1) Slack time represents the amount of time a task may be delayed without delaying the entire project.
2) A milestone is a moment in time that marks the completion of the project's major deliverables.
3) Slack time allows the project manager to move resources from one task to another to ensure that the project is finished on time.
4) A milestone requires resource allocation and needs time to be completed.
A. 1 and 4 only
B. 2 and 3 only
C. 1, 2, and 3 only
D. 1, 2, 3, and 4
If a bank's activities are categorized under such departments as community banking, institutional banking, and agricultural banking, what kind of departmentalization is being utilized?
A. Product departmentalization.
B. Process departmentalization.
C. Functional departmentalization.
D. Customer departmentalization.
Which of the following must be adjusted to index a progressive tax system to inflation?
A. Tax deductions, exemptions, and tax filings.
B. Tax deductions, exemptions, and tax brackets.
C. Tax brackets, tax deductions, and tax payments.
D. Tax brackets, exemptions, and nominal tax receipts.
An organization needs to borrow a large amount of cash to fund its expansion plan. Which of the following annual interest rates is least expensive?
A. 7 percent simple interest with a 10 percent compensating balance.
B. 7 percent simple interest paid at the end of each year.
C. 7 percent discount interest.
D. 7 percent compounding interest.
The main reason to establish internal controls in an organization is to:
A. Encourage compliance with policies and procedures.
B. Safeguard the resources of the organization.
C. Ensure the accuracy, reliability, and timeliness of information.
D. Provide reasonable assurance on the achievement of objectives.
Which of the following statements regarding organizational governance is not correct?
A. An effective internal audit function is one of the four cornerstones of good governance.
B. Those performing governance activities are accountable to the customer.
C. Accountability is one of the key elements of organizational governance.
D. Governance principles and the need for an internal audit function are applicable to governmental and not-for-profit activities.
| Page 9 out of 49 Pages |