IIA-CIA-Part3 Exam Practice Test Instant Access

Question 1

Which of the following network types should an organization choose if it wants to allow access only to its own personnel?

AAn extranet.

BA local area network (LAN).

CAn intranet.

DThe internet.

Answer : C

Comprehensive and Detailed In-Depth

An intranet is a private network used by an organization for internal communication and information sharing among employees. It is accessible only to authorized personnel within the company.

Option A (Extranet) -- Allows external parties (e.g., suppliers, partners) to access limited information.

Option B (LAN) -- Refers to a network infrastructure rather than controlled access.

Option D (Internet) -- Is public and not restricted to internal personnel.

Thus, Option C (Intranet) is the correct answer as it ensures access only to organizational personnel.

Question 2

Which of the following statements is true regarding data backup?

ASystem backups should always be performed real time.

BBackups should be stored in a secured location onsite for easy access.

CThe tape rotation schedule affects how long data is retained

DBackup media should be restored only m case of a hardware or software failure

Answer : C

A tape rotation schedule defines how often backup tapes are overwritten or archived, directly impacting data retention periods. This is essential for compliance, disaster recovery, and internal controls over data storage.

Step-by-Step

Correct Answer (C - The Tape Rotation Schedule Affects How Long Data is Retained)

Organizations use backup rotation schemes such as Grandfather-Father-Son (GFS), Tower of Hanoi, or FIFO (First-In-First-Out) to determine how long backups are kept before being overwritten.

This impacts data retention policies, regulatory compliance, and recovery capabilities.

The IIA's GTAG 10: Business Continuity Management discusses backup strategies and retention management.

Why Other Options Are Incorrect:

Option A (System backups should always be performed real-time):

Real-time backups (continuous data protection) are useful but not always required. Many businesses use scheduled backups instead.

Option B (Backups should be stored in a secured location onsite for easy access):

Best practice recommends offsite or cloud storage to protect against disasters like fire or cyberattacks.

Option D (Backup media should be restored only in case of hardware or software failure):

Backups may also be restored for audit purposes, compliance checks, or business continuity testing.

IIA Reference for Validation:

GTAG 10: Business Continuity Management -- Covers backup strategies, data retention, and disaster recovery.

IIA Practice Guide: IT Controls -- Discusses backup policies and risks in data management.

Thus, the tape rotation schedule (C) is correct because it determines how long data is retained.

Question 3

Which of the following attributes of data is most likely to be compromised in an organization with a weak data governance culture?

AVariety.

BVelocity.

CVolume.

DVeracity.

Answer : D

Data governance refers to the policies, processes, and controls an organization implements to ensure data integrity, security, and compliance. When an organization has a weak data governance culture, the most compromised attribute of data is 'veracity,' which refers to the accuracy, reliability, and trustworthiness of data.

Why Option D (Veracity) is Correct:

Weak data governance leads to poor data quality, inconsistencies, and errors, reducing data veracity (trustworthiness and accuracy).

Without strong governance, data may be incomplete, outdated, or manipulated, leading to flawed decision-making.

Data veracity is critical for risk management, internal audit, and regulatory compliance, as unreliable data can lead to financial misstatements and operational risks.

Why Other Options Are Incorrect:

Option A (Variety):

Variety refers to different types and sources of data (structured, unstructured, semi-structured).

A weak data governance culture does not necessarily affect the diversity of data sources.

Option B (Velocity):

Velocity refers to the speed at which data is generated, processed, and analyzed.

Weak governance impacts data quality more than processing speed.

Option C (Volume):

Volume refers to the quantity of data being processed and stored.

Weak data governance might lead to data duplication or loss but does not directly impact data volume.

IIA Reference:

IIA GTAG -- 'Auditing Data Governance': Emphasizes the importance of data veracity in decision-making.

COSO Internal Control Framework: Highlights the role of data integrity in financial and operational controls.

IIA's Global Technology Audit Guide on Data Analytics: Discusses the risks of poor data governance affecting veracity.

Question 4

According to lIA guidance on IT, which of the following plans would pair the identification of critical business processes with recovery time objectives?

AThe business continuity management charter.

BThe business continuity risk assessment plan.

CThe business Impact analysis plan

DThe business case for business continuity planning

Answer : C

The Business Impact Analysis (BIA) plan is a key component of business continuity planning that identifies critical business processes and determines their Recovery Time Objectives (RTOs) and Recovery Point Objectives (RPOs).

Step-by-Step

Correct Answer (C - Business Impact Analysis Plan)

The BIA is a systematic process that identifies essential functions, assesses potential disruptions, and determines the recovery time requirements to ensure business continuity.

The Recovery Time Objective (RTO) defines the maximum acceptable downtime for critical business functions.

The Recovery Point Objective (RPO) identifies how much data loss is tolerable.

According to the IIA Global Technology Audit Guide (GTAG) 10: Business Continuity Management, a BIA is essential for assessing the financial, operational, and reputational impact of disruptions.

Why Other Options Are Incorrect:

Option A (Business Continuity Management Charter):

A charter defines the governance, responsibilities, and overall framework of business continuity but does not focus on RTOs or critical business processes.

Option B (Business Continuity Risk Assessment Plan):

A risk assessment identifies threats and vulnerabilities but does not define recovery time objectives.

While risk assessments inform the BIA, they do not replace it.

Option D (Business Case for Business Continuity Planning):

A business case justifies investment in continuity planning but does not map business processes to RTOs.

IIA Reference for Validation:

GTAG 10: Business Continuity Management -- Defines BIA as the process for identifying critical business functions and their RTOs.

IIA Practice Guide: Auditing Business Continuity -- Emphasizes the role of BIA in business resilience.

Thus, the Business Impact Analysis (BIA) Plan (C) is the correct answer because it pairs critical business processes with recovery time objectives.

Question 5

Which of the following can be classified as debt investments?

AInvestments in the capital stock of a corporation

BAcquisition of government bonds.

CContents of an investment portfolio,

DAcquisition of common stock of a corporation

Answer : B

Debt investments refer to financial instruments where an investor lends money to an entity (corporation, government, or institution) in exchange for periodic interest payments and the repayment of the principal amount at maturity. These include:

Government bonds (such as U.S. Treasury bonds, municipal bonds, and sovereign bonds)

Corporate bonds

Certificates of deposit (CDs)

Commercial paper

Explanation of the Other Options:

A . Investments in the capital stock of a corporation Incorrect. Capital stock represents ownership (equity investments), not debt investments.

C . Contents of an investment portfolio Incorrect. A portfolio may contain both equity and debt investments, making this too broad to classify specifically as debt.

D . Acquisition of common stock of a corporation Incorrect. Common stock is an equity investment, not a debt investment.

IIA Reference & Best Practices:

The IIA's Global Internal Audit Standards on Investment Management and Risk Assessment highlight debt instruments as fixed-income securities.

International Financial Reporting Standards (IFRS 9 -- Financial Instruments) classify bonds and loans as debt investments, distinct from equity instruments.

The Generally Accepted Accounting Principles (GAAP) -- FASB ASC 320 specifies how to account for debt securities.

Thus, the correct answer is B. Acquisition of government bonds.

Question 6

A newly appointed chief audit executive (CAE) reviews current reporting practices. The CAE notices that exit meetings tend to be unproductive. When internal auditors present summaries of observations, engagement clients consistently complain that they do not understand where the observations come from. Which of the following could improve this situation?

ASend summaries of observations in advance of exit meetings and ask engagement clients to review them ahead of time

BEstablish the purpose of exit meetings as for presentation of observations only and request that all disagreements are submitted in writing afterwards

CRead the entire draft internal audit report together with the clients at the exit meeting to eliminate any disputes

DDiscontinue exit meetings, as they have proved to be ineffective and unproductive

Answer : A

Exit meetings are intended to ensure that engagement clients clearly understand the observations, conclusions, and recommendations of the internal audit activity. The IIA's International Standards for the Professional Practice of Internal Auditing emphasize that communication should be clear, constructive, and timely. Providing engagement clients with written summaries of the observations before the exit meeting allows them to review the facts, prepare questions, and understand the basis for the observations. This preparation improves dialogue, reduces confusion, and increases the effectiveness of the meeting.

Option B is less effective because it limits client engagement and postpones resolution of disagreements. Option C is impractical, as reading the full draft report during the meeting is time-consuming and may overwhelm clients. Option D eliminates the opportunity for discussion and relationship building with management, which is a critical part of audit communication.

IIA's International Standards for the Professional Practice of Internal Auditing (Standards 2400 -- Communicating Results, Practice Advisory 2410-2).

Question 7

Which of the following scenarios would require the chief audit executive (CAE) to change the internal audit plan and seek approval for the changes from the board?

AThe CAE meets with the organization's new CFO to review the internal audit plan. After reviewing the plan, the CFO is satisfied that the plan addressed the top risks facing the organization

BThe CAE oversees an internal audit function that has one IT auditor on staff. This auditor left the organization eight months ago and the CAE has been unable to hire a suitable replacement

CThe effective date of a new government regulation occurs during the internal audit plan year. The new regulation and its effective date have been public for several years

DThe CAE oversees an internal audit function of 15 auditors. An auditor left the organization and was replaced the following week with an auditor who has similar skills and experience

Answer : B

Losing the only IT auditor in the internal audit function significantly impacts the ability to perform IT audits in the approved plan. This resource limitation requires the CAE to revise the plan and seek board approval for changes.

Option A does not change the plan. Option C was foreseeable and should already have been included in prior planning. Option D has no material impact since the vacancy was quickly filled with a qualified replacement.

IIA Standards -- Standard 2020: Communication and Approval.

IIA Certified Internal Auditor-Internal Audit Knowledge Elements IIA-CIA-Part3 Exam Practice Test