IIA-CIA-Part3 Exam Dumps - Business Knowledge for Internal Auditing

Maintaining the infrastructure for a real-time database backup involves ensuring that backups are correctly configured, continuously running, and fail-safe mechanisms are in place to prevent data loss. The most appropriate role for this responsibility is the IT database administrator (DBA) because:

Primary Role of a DBA:

The DBA is responsible for managing database performance, availability, backup strategies, and recovery processes.

Ensures that real-time backups are functioning properly and failure risks are mitigated.

Database Infrastructure & Backup Strategies:

DBAs configure, monitor, and troubleshoot real-time backup solutions such as replication, mirroring, and log shipping.

They work with backup tools like Oracle Data Guard, SQL Server Always On, and MySQL replication.

Disaster Recovery & Data Integrity:

The DBA ensures data consistency and integrity, especially during system failures or cyber incidents.

They set up recovery point objectives (RPO) and recovery time objectives (RTO) for database resilience.

Option B (IT Data Center Manager):

Oversees physical and environmental infrastructure (e.g., servers, cooling, and power systems). Not directly responsible for database backup failure prevention. (Incorrect)

Option C (IT Help Desk Function):

Provides user support and troubleshooting but does not manage backup infrastructure. (Incorrect)

Option D (IT Network Administrator):

Manages network configurations, security, and connectivity but does not handle database backup infrastructure. (Incorrect)

IIA GTAG – "Auditing Business Continuity and Disaster Recovery": Emphasizes the role of DBAs in backup infrastructure.

COBIT 2019 – BAI10.02 (Manage Backup and Restore): Assigns database backup management responsibilities primarily to DBAs.

IIA's "Auditing IT Operations": Recommends that database administration teams ensure backup mechanisms are tested regularly.

Why Other Options Are Incorrect:IIA References:Thus, the correct answer is A. IT database administrator.

A contract is closed out when all the contractual terms have been fully satisfied, including the completion of deliverables, final payments, and any post-contract evaluations or obligations.

Correct Answer (B - When all contractual obligations have been discharged)

According to contract management principles and IIA standards, a contract is officially closed out once:

All agreed-upon deliverables have been completed.

All payments and financial obligations are settled.

Final performance evaluations or audits are completed.

The contract is formally reviewed and documented for closure.

The IIA’s GTAG 3: Contract Management Framework supports that contract closure occurs after full performance and obligations are met.

Why Other Options Are Incorrect:

Option A (When there's a dispute between contracting parties):

Disputes do not necessarily close out a contract; instead, they may lead to mediation, renegotiation, or legal action. The contract remains active until resolved.

The IIA’s Practice Guide: Auditing Contracts recommends dispute resolution mechanisms but does not define them as a reason for contract closure.

Option C (When there is a force majeure event):

A force majeure (unforeseen event like natural disasters or war) may suspend or modify contractual obligations but does not always lead to closure.

The contract may be renegotiated or resumed once conditions allow.

Option D (When the termination clause is enacted):

Termination and closure are not the same. Termination means ending the contract before full obligations are met, whereas closure means fulfilling all obligations.

IIA GTAG 3: Contract Management Framework explains that contract termination can occur under specific clauses, but closure happens only after all duties are fulfilled.

IIA GTAG 3: Contract Management Framework – Covers contract lifecycle, including closeout procedures.

IIA Practice Guide: Auditing Contracts – Details contract auditing, dispute resolution, and obligations fulfillment.

Step-by-Step Explanation:IIA References for Validation:

A hot recovery plan (hot site) is a fully operational, duplicate site that is pre-configured and ready for immediate use in case of a disaster. This approach allows an organization to recover critical operations quickly with minimal downtime.

(A) Cold recovery plan.

Incorrect: A cold site is a facility that has infrastructure but no active IT systems or data until set up after a disaster, resulting in longer recovery times.

(B) Outsourced recovery plan.

Incorrect: Outsourcing recovery refers to third-party disaster recovery services, but does not specifically describe a fully operational duplicate site.

(C) Storage area network recovery plan.

Incorrect: A storage area network (SAN) recovery plan focuses on data storage redundancy, not a fully operational duplicate facility.

(D) Hot recovery plan. (Correct Answer)

A hot site is the fastest and most effective disaster recovery solution, ensuring immediate failover with minimal downtime.

IIA GTAG 10 – Business Continuity Management highlights hot sites as the most effective for mission-critical operations.

IIA GTAG 10 – Business Continuity Management: Recommends hot sites for critical recovery scenarios.

IIA Standard 2120 – Risk Management: Emphasizes preparedness for disaster recovery planning.

Analysis of Each Option:IIA References Supporting the Answer:Thus, the correct answer is (D) Hot recovery plan, as it ensures a fully operational backup site for immediate disaster recovery.

Earned Value Analysis (EVA) is a project management technique that integrates scope, time, and cost data to measure project performance and progress objectively. EVA allows internal auditors to assess whether a software development project is on track by comparing planned work with completed work and actual costs.

Here’s why EVA is the most appropriate choice:

Evaluates Project Progress and Performance – EVA measures how much work has been completed against the planned schedule and budget, helping auditors analyze project efficiency.

Identifies Deviations – It highlights cost overruns or delays in task completion, which is critical for software development projects.

Uses Key Metrics – EVA includes essential indicators like:

Planned Value (PV) – The budgeted cost of work scheduled.

Earned Value (EV) – The value of actual work performed.

Actual Cost (AC) – The real cost incurred for work completed.

Schedule Variance (SV) and Cost Variance (CV) – Indicators of deviations from planned performance.

Supports Risk-Based Internal Audit Approach – The IIA emphasizes risk-based auditing, and EVA helps auditors assess risks related to project cost overruns, schedule slippage, and performance gaps.

A. A Balanced Scorecard – This measures overall organizational performance across perspectives (financial, customer, internal processes, and learning & growth), but it is not specifically designed for evaluating project task completion.

B. A Quality Audit – This focuses on compliance with quality standards and does not measure project task completion efficiency.

D. Trend Analysis – This evaluates patterns over time but does not provide a structured measurement of project progress in terms of cost, time, and completion percentage.

The IIA’s GTAG (Global Technology Audit Guide) on IT Project Management – Recommends using earned value analysis for project auditing.

IIA’s International Professional Practices Framework (IPPF) – Performance Standard 2120 (Risk Management) – Emphasizes the need for internal auditors to evaluate the effectiveness of project risk management, which EVA supports.

COSO’s Enterprise Risk Management (ERM) Framework – Encourages structured performance measurement techniques like EVA to monitor projects.

Why Not the Other Options?IIA References:Thus, Earned Value Analysis (EVA) is the correct answer because it provides a precise, quantitative way to measure project performance. ✅

A false positive occurs when a system incorrectly identifies a legitimate item as a threat or an unwanted entity. In the case of a spam filter, a false positive happens when the filter mistakenly classifies a genuine email as spam, even though it is legitimate.

Option A: "The spam filter removed incoming communication that included certain keywords and domains."

This describes a general filtering mechanism but does not indicate a mistake. If the filter was correctly configured, it is not necessarily a false positive. (Incorrect)

Option B: "The spam filter deleted commercial ads automatically, as they were recognized as unwanted."

If the ads were indeed unwanted, this is a true positive, meaning the system worked correctly. (Incorrect)

Option C: "The spam filter routed to the 'junk' folder a newsletter that appeared to include links to fake websites."

If the newsletter contained suspicious links, the filter was functioning as designed. This is not necessarily an error. (Incorrect)

Option D: "The spam filter blocked a fitness club gift card that coworkers sent to an employee for her birthday."

This is a clear example of a false positive because the email was not spam or malicious, yet the filter mistakenly blocked it. (Correct Answer)

IIA GTAG (Global Technology Audit Guide) on Cybersecurity and IT Risks: Discusses false positives and negatives in automated security controls.

IIA’s "Auditing IT Security Controls" Report: Emphasizes the need for tuning security filters to reduce false positives.

COBIT 2019 – DSS05.07 (Manage Security Services): Highlights the importance of minimizing false positives to ensure business communication is not disrupted.

Analysis of Each Option:IIA References:Thus, the correct answer is D. The spam filter blocked a fitness club gift card that coworkers sent to an employee for her birthday.

The FIFO (First-In, First-Out) method values inventory based on the assumption that older, lower-cost inventory is sold first, leaving newer, higher-cost inventory in stock. During periods of rising prices, FIFO results in lower cost of goods sold (COGS) and higher net income, making it susceptible to manipulation by management.

(A) Correct – First-in, first-out method (FIFO).

FIFO lowers COGS when older, cheaper inventory is sold first, inflating net income.

Management can manipulate earnings by selectively selling older, lower-cost inventory.

(B) Incorrect – Last-in, first-out method (LIFO).

LIFO assumes newer, higher-cost inventory is sold first, resulting in higher COGS and lower net income.

LIFO is typically used to reduce taxable income, not to inflate net income.

(C) Incorrect – Specific identification method.

This method tracks the exact cost of each unit, eliminating the ability to manipulate costs easily.

(D) Incorrect – Average-cost method.

The average-cost method smooths out fluctuations in inventory costs, preventing significant income manipulation.

IIA’s Global Internal Audit Standards – Financial Reporting and Inventory Valuation Risks

Discusses inventory accounting methods and their impact on financial statements.

IFRS and GAAP Accounting Standards – Inventory Valuation

Defines how FIFO can be used to influence financial performance.

COSO’s ERM Framework – Financial Manipulation Risks

Identifies inventory valuation as an area where earnings management can occur.

Analysis of Answer Choices:IIA References and Internal Auditing Standards:

To efficiently protect business data from corruption and errors, the best approach is proactive detection through validation controls. Batch total calculations help verify data integrity before approval, ensuring errors are caught early.

(A) Controls to ensure data is unable to be accessed without authorization.

Incorrect: Access controls prevent unauthorized access, but they do not detect or prevent data corruption/errors.

(B) Controls to calculate batch totals to identify an error before approval. (Correct Answer)

Batch control totals ensure that data entries match expected values before processing, helping detect errors before approval.

IIA GTAG 3 – Continuous Auditing recommends automated validation and reconciliation checks for data integrity.

(C) Controls to encrypt the data so that corruption is likely ineffective.

Incorrect: Encryption protects data confidentiality, but it does not prevent or detect errors or corruption.

(D) Controls to quickly identify malicious intrusion attempts.

Incorrect: Intrusion detection systems focus on cybersecurity, not data corruption or errors.

IIA Standard 2120 – Risk Management: Recommends controls for error prevention and early detection.

IIA GTAG 3 – Continuous Auditing: Suggests automated validation processes like batch totals to detect errors before approval.

Analysis of Each Option:IIA References Supporting the Answer:Thus, the correct answer is (B) because batch total calculations effectively detect errors before approval, ensuring data integrity.

A spear phishing attack is a targeted email attack aimed at a specific individual, organization, or business. Unlike general phishing, which casts a wide net, spear phishing is highly personalized and designed to deceive the recipient into providing sensitive information.

Personalization – The email references a golf membership renewal, making it relevant and believable to the recipient.

Social Engineering – The attacker exploits the victim’s trust by pretending to be a legitimate entity.

Malicious Link – The victim clicks a fraudulent hyperlink and enters sensitive credit card details.

Financial Fraud – The goal is to steal payment information, leading to unauthorized transactions.

A. Numerous and consistent attacks on the company’s website caused the server to crash.

This describes a Denial-of-Service (DoS) attack, not spear phishing.

B. A person posing as an IT help desk representative called employees and played a generic message requesting passwords.

This describes vishing (voice phishing) rather than spear phishing.

D. Many users of a social network service received fake notifications about a new investment opportunity.

This is general phishing, as it targets multiple users instead of one individual.

IIA’s GTAG (Global Technology Audit Guide) on Cybersecurity – Emphasizes the risk of spear phishing in cyber fraud.

NIST SP 800-61 (Computer Security Incident Handling Guide) – Defines spear phishing as a highly targeted attack method.

COBIT 2019 (Governance and Management of IT) – Highlights social engineering risks in IT security.

Why Option C is Correct?Why Not the Other Options?IIA References:✅ Final Answer: C. A person received a personalized email regarding a golf membership renewal, and he clicked a hyperlink to enter his credit card data into a fake website.