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

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.

Which of the following statements is false regarding the internal audit approach when a set of standards other than The IIA's Standards is applicable to a specific engagement?

A. The internal auditor may cite the use of other standards during audit communications.

B. If the other standards are government-issued, the internal auditor should apply them in conjunction with The IIA's Standards.

C. If there are inconsistencies between the other standards and The IIA's Standards, the internal auditor must use the more restrictive standards.

D. If there are inconsistencies between the other standards and The IIA's Standards, the internal auditor must use the less restrictive standards.

According to Porter, which of the following is associated with fragmented industries?

A. Weak entrance barriers.

B. Significant scale economies.

C. Steep experience curve.

D. Strong negotiation power with suppliers.

An organization decided to install a motion detection system in its warehouse to protect against after-hours theft. According to the COSO enterprise risk management framework, which of the following best describes this risk management strategy?

A. Avoidance.

B. Reduction.

C. Elimination.

D. Sharing.

When an organization is choosing a new external auditor, which of the following is the most appropriate role for the chief audit executive to undertake?

A. Review and acquire the external audit service.

B. Assess the appraisal and actuarial services.

C. Determine the selection criteria.

D. Identify regulatory requirements to be considered.