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

The situation describes a scenario where a customer's personal information was shared with third parties without explicit consent, leading to unsolicited offers. This indicates a control weakness in data privacy and confidentiality, specifically the undue disclosure of information to external parties.

(A) Incorrect – Excessive collecting of information.

While collecting too much personal data can be a privacy concern, the issue here is not about data collection but how the data was shared.

(B) Incorrect – Application of social engineering.

Social engineering refers to deceptive tactics used to manipulate individuals into disclosing confidential information, which is not the case here.

(C) Incorrect – Retention of incomplete information.

The issue is not about missing or incomplete data but rather unauthorized sharing of data.

(D) Correct – Undue disclosure of information.

The retailer improperly shared the customer's personal data with other businesses, leading to unsolicited offers.

This represents a failure to comply with data privacy regulations (e.g., GDPR, CCPA).

IIA’s GTAG (Global Technology Audit Guide) – Data Privacy Risks and Controls

Highlights the risks associated with unauthorized data sharing.

NIST Cybersecurity Framework – Data Protection and Privacy

Emphasizes the importance of controlling access to customer information.

COSO’s ERM Framework – Information Governance and Compliance

Discusses the importance of data protection policies to prevent undue disclosure

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

Understanding Data Recovery and Security Risks:

Data must be protected, recoverable, and accessible when needed while maintaining security.

The best practice is to store encrypted backups offsite while keeping encryption keys separate but accessible.

Why Option D is Correct?

Storing encrypted data offsite (a few hours away) ensures protection against disasters (e.g., fire, cyberattacks, physical damage).

Keeping encryption keys at the organization ensures that recovery is quick and controlled without risking unauthorized access.

This aligns with the IIA's IT Audit Practices and ISO 27001 (Information Security Management), which emphasize separate storage of encrypted data and encryption keys for security and recoverability.

IIA Standard 2110 – Governance requires internal auditors to assess whether IT governance ensures the availability and security of critical data.

Why Other Options Are Incorrect?

Option A (Encrypted physical copies and keys stored together at the organization):

If both data and keys are in the same location, a disaster or breach would make recovery impossible.

Option B (Encrypted copies and keys stored in separate locations far away):

While secure, if encryption keys are stored too far, recovery could be delayed, impacting business continuity.

Option C (Encrypted usage reports in a cloud database):

This does not ensure full data recovery; it only provides logs and structure changes, not the actual data.

Storing encrypted data offsite while keeping encryption keys accessible onsite follows best IT security and disaster recovery practices.

IIA Standard 2110 supports evaluating IT governance, including data security and recovery controls.

Final Justification:IIA References:

IPPF Standard 2110 – Governance

ISO 27001 – Information Security Management

NIST SP 800-34 – Contingency Planning Guide for IT Systems

COBIT Framework – Data Security & Recovery Controls

The auditor used an analytics tool to examine vendor payment transactions over 24 months and identify the top five vendors receiving the highest payments. This process involves examining, summarizing, and interpreting data, which falls under data analysis.

(A) Process analysis. ❌

Incorrect. Process analysis focuses on evaluating the workflow, efficiency, and control effectiveness of a business process, rather than analyzing data trends.

Example: Reviewing how invoices are processed to identify bottlenecks.

(B) Process mining. ❌

Incorrect. Process mining uses event logs and transactional data to analyze workflow patterns and deviations from standard procedures.

Example: Identifying inefficiencies in an invoice approval workflow.

(C) Data analysis. ✅

Correct. The auditor reviewed historical transaction data and extracted meaningful insights (i.e., the top five vendors by payment volume).

IIA GTAG – "Data Analytics: Elevating Internal Audit Performance" describes data analysis as using structured financial and operational data to identify trends, risks, or anomalies.

(D) Data mining. ❌

Incorrect. Data mining involves advanced statistical or machine learning techniques to discover hidden patterns in data, whereas data analysis focuses on summarizing and interpreting known data.

Example: Identifying fraudulent transactions using predictive modeling.

IIA GTAG – "Data Analytics: Elevating Internal Audit Performance"

IIA Standard 2320 – Analysis and Evaluation

COSO Framework – Data-Driven Internal Auditing

Analysis of Answer Choices:IIA References:Thus, the correct answer is C (Data analysis), as the auditor examined past transactions to summarize and interpret payment trends.