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IIA-CIA-Part3-3P Exam Dumps - CIA Exam Part Three: Business Knowledge for Internal Auditing

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Question # 41

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.

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Question # 42

Which of the following techniques is the most relevant when an internal auditor conducts a valuation of an organization's physical assets?

A.

Observation.

B.

Inspection.

C.

Original cost.

D.

Vouching.

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Question # 43

According to Porter's model of competitive strategy, which of the following is a generic strategy?

1 Differentiation.

2) Competitive advantage.

3) Focused differentiation.

4) Cost focus.

A.

2 only

B.

3 and 4 only

C.

1, 3, and 4 only

D.

1, 2, 3, and 4

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Question # 44

Which of the following phases of a business cycle are marked by an underuse of resources?

1) The trough.

2) The peak.

3) The recovery.

4) The recession.

A.

1 and 3 only

B.

1 and 4 only

C.

2 and 3 only

D.

2 and 4 only

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Question # 45

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.

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Question # 46

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.

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Question # 47

Providing knowledge, motivating organizational members, controlling and coordinating individual efforts, and expressing feelings and emotions are all functions of:

A.

Motivation.

B.

Performance.

C.

Organizational structure.

D.

Communication.

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Question # 48

Which of the following is a limiting factor for capacity expansion?

A.

Government pressure on organizations to increase or maintain employment.

B.

Production orientation of management.

C.

Lack of credible market leader in the industry.

D.

Company diversification.

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