IIA IIA-CIA-Part3 Dumps Questions Answers

Understanding the Project Life Cycle:

The project life cycle consists of initiation, planning, execution, and closure.

Early stages involve planning and defining scope, while later stages focus on execution and completion.

Why Change Costs Increase Over Time:

In early stages, changes are relatively inexpensive as they mainly involve planning adjustments.

As the project progresses, modifications require rework, additional resources, and schedule delays, increasing costs.

Near project completion, changes can be very costly, requiring significant time and effort to correct.

Why Other Options Are Incorrect:

A. Risk and uncertainty increase over time – Incorrect; risk and uncertainty decrease as the project moves forward and becomes more defined.

B. Costs and staffing levels are high at project close – Incorrect; they are usually highest during execution, not closure.

D. Project life cycle = product life cycle – Incorrect; they are separate concepts. A product may exist long after the project ends.

IIA GTAG 12 – Auditing IT Projects: Discusses project life cycle and cost implications.

IIA Practice Guide on Project Risk Management: Highlights cost escalation risks in later project phases.

PMBOK (Project Management Body of Knowledge) Framework: Defines cost increase trends in project management.

Relevant IIA References:✅ Final Answer: Costs related to making changes increase as the project approaches completion (Option C).

The acid-test (quick) ratio is a more dependable liquidity indicator than working capital because it excludes inventory, which may not be easily converted to cash in the short term. This ratio measures a company’s ability to pay its short-term liabilities using only its most liquid assets (cash, marketable securities, and accounts receivable).

Formula for the Acid-Test Ratio:Acid-Test Ratio=Current Assets−InventoryCurrent Liabilities\text{Acid-Test Ratio} = \frac{\text{Current Assets} - \text{Inventory}}{\text{Current Liabilities}}Acid-Test Ratio=Current LiabilitiesCurrent Assets−Inventory​

This ratio is more reliable than working capital since it removes inventory, which may be difficult to liquidate quickly in financial distress.

A. Acid-test (quick) ratio (Correct Answer) – This provides a stronger measure of liquidity because it excludes inventory, which might not be quickly converted to cash.

B. Average collection period – This measures the efficiency of accounts receivable collections, but it does not directly measure overall liquidity.

C. Current ratio – While this ratio is commonly used, it includes inventory, which can distort liquidity assessments if inventory is not easily sold.

D. Inventory turnover – This measures how quickly inventory is sold, but it does not directly assess liquidity.

IIA IPPF Standard 2130 – Control emphasizes liquidity monitoring as a key financial control.

COSO ERM Framework – Financial Performance Measures discusses acid-test ratio as a critical liquidity metric.

IFRS 7 – Financial Instruments Disclosures outlines the importance of liquidity risk assessments.

Explanation of Each Option:IIA References:

When conducting a cybersecurity risk assessment, an internal auditor must evaluate the most significant threats based on their potential impact on the organization. In the pharmaceutical industry, intellectual property (IP), such as research and development (R&D) data, is one of the most valuable and sensitive assets.

(A) Cybercriminals hacking into the organization's time and expense system to collect employee personal data:While the loss of employee personal data is a serious concern due to privacy and regulatory implications (e.g., GDPR, CCPA), it does not pose as critical a threat as the loss of proprietary pharmaceutical research.

(B) Hackers breaching the organization's network to access research and development reports (Correct Answer):R&D reports contain proprietary drug formulas, clinical trial results, and patent-pending innovations, making them highly valuable to competitors and cybercriminals. A breach could lead to intellectual property theft, financial losses, loss of competitive advantage, and regulatory non-compliance (e.g., FDA, EMA requirements). This is considered the most significant threat because:

It could result in billions of dollars in lost revenue.

Competitors or state-sponsored hackers could exploit stolen research.

It could disrupt drug development and approval processes.

(C) A denial-of-service (DoS) attack that prevents access to the organization's website:While DoS attacks can damage an organization's reputation and disrupt operations, they generally do not cause the same level of financial or strategic harm as the loss of critical R&D data. Most organizations have cybersecurity measures (e.g., load balancers, CDNs) to mitigate DoS risks.

(D) A hacker accessing the financial information of the company:Unauthorized access to financial data can be serious, leading to fraud or reputational damage. However, publicly traded companies already disclose much of their financial data, and financial breaches typically have a lower long-term impact compared to intellectual property theft.

IIA Global Technology Audit Guide (GTAG) 15: Information Security Governance: Recommends that internal auditors prioritize risks that impact strategic assets, such as intellectual property.

IIA Standard 2120 - Risk Management: Requires internal auditors to evaluate the organization’s risk management processes, emphasizing risks with significant financial and operational consequences.

IIA Practice Advisory 2110-2: Assessing the Adequacy of Risk Management Processes: Highlights that internal auditors must identify risks that could threaten the organization’s long-term objectives, such as IP theft.

COSO ERM Framework: Encourages prioritization of risks that have high impact on an organization’s value and strategic objectives, such as cyber threats to proprietary research.

Analysis of Each Option:IIA References:Conclusion:Given the pharmaceutical industry's reliance on proprietary R&D, a breach compromising research reports represents the most significant cyber threat. Therefore, option (B) is the correct answer.