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

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.

Multinational organizations generally spend more time and effort to identify and evaluate:

A. Internal strengths and weaknesses.

B. Break-even points.

C. External trends and events.

D. Internal risk factors.

A brand manager in a consumer food products organization suspected that several days of the point-of-sale data on the spreadsheet from one grocery chain were missing. The best approach for detecting missing rows in spreadsheet data would be to:

A. Sort on product identification code and identify missing product identification codes.

B. Review store identification code and identify missing product identification codes.

C. Compare product identification codes for consecutive periods.

D. Compare product identification codes by store for consecutive periods.

The economic order quantity for inventory is higher for an organization that has:

A. Lower annual unit sales.

B. Higher fixed inventory ordering costs.

C. Higher annual carrying costs as a percentage of inventory value.

D. A higher purchase price per unit of inventory.

A chief audit executive (CAE) was asked to participate in the selection of an external auditor. Which of the following would not be a typical responsibility for the CAE?

A. Evaluate the proposed external auditor fee.

B. Recommend criteria to be used in the selection process.

C. Develop appropriate performance metrics.

D. Monitor the work of the external auditors.

Which of the following strategies would most likely prevent an organization from adjusting to evolving industry market conditions?

A. Specializing in proven manufacturing techniques that have made the organization profitable in the past.

B. Substituting its own production technology with advanced techniques used by its competitors.

C. Forgoing profits over a period of time to gain market share from its competitors.

D. Using the same branding to sell its products through new sales channels to target new markets.

Preferred stock is less risky for investors than is common stock because:

A. Common stock pays dividends as a stated percentage of face value.

B. Common stock has priority over preferred stock with regard to earnings and assets.

C. Preferred dividends are usually cumulative.

D. Preferred stock with no conversion feature has a higher dividend yield than does convertible preferred stock.