CIA Exam Part Three: Business Knowledge for Internal Auditing (IIA-CIA-Part3-3P) Practice Test

Questions # 141:

Maintenance cost at a hospital was observed to increase as activity level increased. The following data was gathered:

Activity Level -

Maintenance Cost

Month

Patient Days

January

5,600

$7,900

February

7,100

$8,500

March

5,000

$7,400

April

6,500

$8,200

May

7,300

$9,100

June

8,000

$9,800

If the cost of maintenance is expressed in an equation, what is the independent variable for this data?

Options:

Fixed cost.

Variable cost.

Total maintenance cost.

Patient days.

Questions # 142:

Which of the following techniques would be least effective in resolving the conflict created by an internal audit client's perception of the audit report as a personal attack on his management performance?

Options:

The auditor should focus on the audit client as a person and understand him, rather than just

concentrating on the problem.

The auditor should make recommendations based on objective criteria, rather than based on a subjective assessment.

The auditor should explore alternative solutions to address the audit problem, so the audit client has options.

The auditor should take a flexible position on the recommendations and focus on resolving the issue by addressing the interests of the people concerned.

Questions # 143:

Which of the following is not a common feature of cumulative preferred stock?

Options:

Priority over common stock with regard to dilution of shares.

Priority over common stock with regard to earnings.

Priority over common stock with regard to dividend payment.

Priority over common stock with regard to assets.

Questions # 144:

Which of the following local area network physical layouts is subject to the greatest risk of failure if one device fails?

Options:

Star network.

Bus network.

Token ring network.

Mesh network.

Questions # 145:

The cost to enter a foreign market would be highest in which of the following methods of global expansion?

Options:

Joint ventures.

Licensing.

Exporting.

Overseas production.

Questions # 146:

Which of the following is the most likely reason an organization may decide to undertake a stock split?

Options:

To keep stock price constant.

To keep shareholders' equity constant.

To increase shareholders' equity.

To enhance the stock liquidity.

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