Free IIA-CIA-Part3-3P Practice Test Questions 2026

Which of the following statements about market signaling is correct?

1) The organization releases information about a new product generation.

2) The organization limits a challenger's access to the best source of raw materials or labor.

3) The organization announces that it is fighting a new process technology.

4) The organization makes exclusive arrangements with the channels.

A. 1 and 3 only

B. 1 and 4 only

C. 2 and 3 only

D. 2 and 4 only

Which of the following are typical audit considerations for a review of authentication?

1) Authentication policies and evaluation of controls transactions.

2) Management of passwords, independent reconciliation, and audit trail.

3) Control self-assessment tools used by management.

4) Independent verification of data integrity and accuracy.

A. 1, 2, and 3

B. 1, 2, and 4

C. 1, 3, and 4

D. 2, 3, and 4

Which of the following activities most significantly increases the risk that a bank will make poor-quality loans to its customers?

A. Borrowers may not sign all required mortgage loan documentation.

B. Fees paid by the borrower at the time of the loan may not be deposited in a timely manner.

C. The bank's loan documentation may not meet the government's disclosure requirements.

D. Loan officers may override the lending criteria established by senior management.

According to IIA guidance, which of the following would be a primary reason for an internal auditor to test the organization's IT contingency plan?

A. To ensure that adequate controls exist to prevent any significant business interruptions.

B. To identify and address potential security weaknesses within the system.

C. To ensure that tests contribute to improvement of the program.

D. To ensure that deficiencies identified by the audit are promptly addressed.

Which of the following stages of group development is associated with accepting team responsibilities?

A. Forming stage.

B. Performing stage.

C. Norming stage.

D. Storming stage.

Presented below are partial year-end financial statement data (000 omitted from dollar amounts) for companies A and B:

If company A has a quick ratio of 2:1, then it has an accounts receivable balance of:

A. $100

B. $200

C. $300

D. $500

An internal auditor performed a review of IT outsourcing and found that the service provider was failing to meet the terms of the service level agreement. Which of the following approaches is most appropriate to address this concern?

A. The organization should review the skill requirements and ensure that the service provider is maintaining sufficient expertise and retaining skilled resources.

B. The organization should proactively monitor the performance of the service provider, escalate concerns, and use penalty clauses in the contract where necessary.

C. The organization should ensure that there is a clear management communication strategy and path for evaluating and reporting on all outsourced services concerns.

D. The organization should work with the service provider to review the current agreement and expectations relating to objectives, processes, and overall performance.

An internationally recognized brand name is an entrance barrier to new competitors because new competitors would:

A. Have to initiate a price war in order to enter the industry.

B. Face increased production costs.

C. Face increased marketing costs.

D. Face higher learning costs, which would increase fixed costs.

The process of scenario planning begins with which of the following steps?

A. Determining the trends that will influence key factors in the organization's environment.

B. Selecting the issue or decision that will impact how the organization conducts future business.

C. Selecting leading indicators to alert the organization of future developments.

D. Identifying how customers, suppliers, competitors, employees, and other stakeholders will react.

Which of the following price adjustment strategies encourages prompt payment?

A. Cash discounts.

B. Quantity discounts.

C. Functional discounts.

D. Seasonal discounts.

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.