Free IIA-CIA-Part3 Practice Test Questions 2026

Which of the following capital budgeting techniques considers the expected total net cash flows from investment?

A. Cash payback

B. Annual rate of return

C. Incremental analysis

D. Net present value

Which of the following networks is suitable for an organization that has operations In multiple cities and countries?

A. Wide area network.

B. Local area network

C. Metropolitan area network

D. Storage area network

The internal audit activity has identified accounting errors that resulted in the organization overstating its net income for the fiscal year. Which of the following is the most likely cause of this overstatement?

A. Beginning inventory was overstated for the year.

B. Cost of goods sold was understated for the year.

C. Ending inventory was understated for the year.

D. Cost of goods sold was overstated for the year.

An organization contracted a third-party service provider to plan, design, and build a new facility. Senior management would like to transfer all of the risk to the builder. Which type of procurement contract would the organization use?

A. Cost-plus contract.

B. Turnkey contract.

C. Service contract.

D. Solutions contract.

According to IIA guidance, which of the following links computers and enables them to - communicate with each other?

A. Application program code

B. Database system

C. Operating system

D. Networks

A newly appointed board member received an email that appeared to be from the company's CEO. The email stated:
“Good morning. As you remember, the closure of projects is our top priority. Kindly organize prompt payment of the attached invoice for our new solar energy partners.” The board member quickly replied to the email and asked under which project the expense should be accounted. Only then did he realize that the sender 's mail domain was different from the company's. Which of the following cybersecurity risks nearly occurred in the situation described?

A. A risk of spyware and malware.

B. A risk of corporate espionage.

C. A ransomware attack risk.

D. A social engineering risk.

An organization had a gross profit margin of 40 percent in year one and in year two. The net profit margin was 18 percent in year one and 13 percent in year two. Which of the following could be the reason for the decline in the net profit margin for year two?

A. Cost of sales increased relative to sales.

B. Total sales increased relative to expenses.

C. The organization had a higher dividend payout rate in year two.

D. The government increased the corporate tax rate

An organization's board of directors is particularly focused on positioning, the organization as a leader in the industry and beating the competition. Which of the following strategies offers the greatest alignment with the board's focus?

A. Divesting product lines expected to have negative profitability.

B. Increasing the diversity of strategic business units.

C. Increasing investment in research and development for a new product.

D. Relocating the organization's manufacturing to another country.

Which of the following items best describes the strategy of outsourcing?

A. Contracting the work to Foreign Service providers to obtain lower costs

B. Contracting functions or knowledge-related work with an external service provider.

C. Contract -ng operation of some business functions with an internal service provider

D. Contracting a specific external service provider to work with an internal service provider

According to IIA guidance, which of the following is a broad collection of integrated policies, standards, and procedures used to guide the planning and execution of a project?

A. Project portfolio.

B. Project development

C. Project governance.

D. Project management methodologies

Which of the following would most likely be found in an organization that uses a decentralized organizational structure?

A. There is a higher reliance on organizational culture.

B. There are clear expectations set for employees.

C. There are electronic monitoring techniques employed

D. There is a defined code far employee behavior.

Which of the following best describes the purpose of fixed manufacturing costs?

A. To ensure availability of production facilities.

B. To decrease direct expenses related to production.

C. To incur stable costs despite operating capacity.

D. To increase the total unit cost under absorption costing