Pass the IIA CIA IIA-CIA-Part3 Questions and answers with CertsForce

Decentralization refers to the process by which decision-making authority is distributed to lower levels of management within an organization. The degree, importance, and range of decision-making at lower levels are directly related to the extent of decentralization.

Direct Relationship Defined:

As decentralization increases, more decision-making power is transferred to lower levels of the organization.

This means that managers and employees at lower levels are empowered to make a broader range of decisions with greater significance.

The Importance of Lower-Level Decision-Making in a Decentralized Structure:

A decentralized structure allows lower-level managers to respond quickly to operational issues and make important decisions without seeking approval from top management.

This enables increased efficiency, innovation, and adaptability in a dynamic business environment.

IIA's Perspective on Governance and Decision-Making:

According to the International Professional Practices Framework (IPPF) by the Institute of Internal Auditors (IIA), internal auditors must assess the governance structure of an organization, which includes understanding how decision-making authority is allocated.

The IIA’s Three Lines Model highlights the role of management in decision-making, emphasizing the need for a clear and effective delegation of authority.

IIA Standard 2110 – Governance states that internal auditors must evaluate decision-making processes to ensure they align with the organization’s objectives and risk management strategies.

Supporting Business Concepts:

Decentralized organizations like multinational corporations, franchises, and divisional structures benefit from empowering lower levels with decision-making authority.

In contrast, centralized organizations retain control at the top, limiting the scope of decisions at lower levels.

A direct relationship exists because the more decentralized a company is, the greater the responsibility of lower levels in making crucial decisions.

IIA References:

IPPF Standards: Standard 2110 – Governance

IIA’s Three Lines Model – Emphasizing clear delegation of authority

COSO Internal Control Framework – Discusses decentralized decision-making in control environments

Business Knowledge for Internal Auditing (IIA Study Guide) – Governance and decision-making structure

An IT disaster recovery plan (DRP) ensures business continuity by defining backup and recovery sites. These sites differ based on their level of readiness.

Let’s analyze the answer choices:

Option A: Frozen site

Incorrect. "Frozen site" is not a recognized term in IT disaster recovery planning. The three common categories are cold, warm, and hot sites.

Option B: Cold site

Correct.

A cold site is a designated recovery location that provides only basic facilities such as power, space, internet, and telecommunications.

It does not include servers, infrastructure, or pre-installed systems, meaning that it requires significant setup time before becoming operational.

IIA Reference: Business continuity and IT risk management frameworks classify cold sites as a cost-effective but slower disaster recovery option. (IIA GTAG: Business Continuity Management)

Option C: Warm site

Incorrect. A warm site includes some pre-installed hardware and software, allowing faster recovery compared to a cold site.

Option D: Hot site

Incorrect. A hot site is fully operational with real-time data replication, enabling an immediate switchover in case of disaster.

Cybersecurity controls are primarily designed to protect the Confidentiality, Integrity, and Availability (CIA) of data. These are the three fundamental principles of cybersecurity and are essential for protecting organizational information assets. Let’s analyze each option:

Option A: Veracity, velocity, and variety.

Incorrect. These attributes are commonly associated with big data and data analytics rather than cybersecurity. Cybersecurity controls focus on ensuring that data is secure, rather than on its volume, speed, or diversity.

IIA Reference: Cybersecurity risk management frameworks emphasize the CIA triad over big data attributes. (IIA GTAG: Auditing Cybersecurity Risk)

Option B: Integrity, availability, and confidentiality.

Correct. These three principles are at the core of cybersecurity:

Confidentiality: Ensures that sensitive information is only accessible to authorized individuals.

Integrity: Protects data from unauthorized modifications or corruption.

Availability: Ensures that data and systems are accessible when needed.

IIA Reference: The IIA’s guidance on IT governance highlights the CIA triad as the foundation of cybersecurity. (IIA GTAG: Information Security Governance)

Option C: Accessibility, accuracy, and effectiveness.

Incorrect. While these attributes are important in data management and usability, they do not directly define cybersecurity controls.

Option D: Authorization, logical access, and physical access.

Incorrect. While these are essential security components, they fall under broader IT security measures rather than forming the fundamental principles of cybersecurity.

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:

A Value-Added Network (VAN) is a third-party network service that securely connects an organization with its trading partners, facilitating secure electronic data interchange (EDI) and business communications.

(A) Value-added network (VAN). (Correct Answer)

A VAN is a private, managed network service that provides secure data transmission between business partners.

It is commonly used for B2B transactions, supply chain management, and EDI.

IIA GTAG 7 – IT Outsourcing recognizes VANs as critical third-party networks for secure business data exchange.

(B) Local area network (LAN).

Incorrect: A LAN connects computers within a limited area (e.g., an office or building), but it is not designed for external trading partner connections.

(C) Metropolitan area network (MAN).

Incorrect: A MAN covers a city or region, but it is not designed for B2B communication.

(D) Wide area network (WAN).

Incorrect: A WAN connects multiple geographic locations, but it is a general networking term, not specific to trading partner communications.

IIA GTAG 7 – IT Outsourcing: Discusses the use of third-party networks like VANs for secure data exchange.

IIA Standard 2110 – Governance: Recommends secure third-party integration for business continuity and security.

Analysis of Each Option:IIA References Supporting the Answer:Thus, the correct answer is (A) Value-Added Network (VAN) because it is specifically designed for secure communication between an organization and its trading partners.

Descriptive Analytics – Answers "What happened?" by summarizing past data.

Diagnostic Analytics – Answers "Why did it happen?" by identifying causes of trends or issues.

Prescriptive Analytics – Answers "What should we do?" by providing data-driven recommendations and optimal solutions for decision-making.

Prolific Analytics – This is not a recognized category in standard analytics models.

The model makes specific recommendations for store operations (extended hours, staffing adjustments).

It optimizes resource allocation based on demand patterns.

It goes beyond identifying past trends (descriptive) or diagnosing causes (diagnostic) and provides actionable solutions.

A. Descriptive – Would only summarize sales data but not suggest changes.

B. Diagnostic – Would explain why luxury stores see higher traffic on weekends but would not recommend actions.

D. Prolific – Not a standard analytics category.

IIA’s GTAG on Data Analytics – Describes prescriptive analytics as the highest level of business intelligence, driving decision-making.

COSO’s Enterprise Risk Management (ERM) Framework – Encourages data-driven decision-making using prescriptive models.

COBIT 2019 on IT Governance – Recommends leveraging prescriptive analytics for operational efficiency.

Types of Analytical Models in Business Intelligence:Why Prescriptive Analytics is the Best Choice?Why Not the Other Options?IIA References:✅ Final Answer: C. Prescriptive.

Automated attacks that attempt to exploit weak or leaked passwords—such as credential stuffing, brute force attacks, and dictionary attacks—pose a significant cybersecurity risk. Implementing two-step verification (also known as multi-factor authentication, or MFA) is one of the most effective measures to mitigate these threats.

Why Two-Step Verification is Effective (B - Correct Answer)

Multi-factor authentication (MFA) adds an additional security layer beyond a password, requiring a second factor such as a one-time code sent to a mobile device, biometric authentication, or a security key.

Even if an attacker obtains a password, they cannot access the account without the second authentication factor.

The IIA Global Technology Audit Guide (GTAG) 1: Information Security Management emphasizes the use of multi-factor authentication to prevent unauthorized access.

Why Other Options Are Less Effective:

Option A: Changing passwords every two years

Ineffective because attackers often use compromised credentials that may be recent. Best practices recommend regular password updates but coupled with MFA.

The IIA's GTAG 16: Identity and Access Management highlights that password rotation alone does not fully protect against automated attacks.

Option C: Using a VPN when out of the office

Irrelevant to password attacks. A VPN encrypts data and secures network connections but does not prevent brute force or credential stuffing attacks.

The IIA GTAG 17: Auditing Network Security discusses VPNs for secure remote access but does not consider them a solution for password-based attacks.

Option D: Using antivirus and security tools

While important for overall security, these tools cannot prevent attacks that exploit stolen or weak passwords.

The IIA GTAG 15: Information Security Governance states that security tools should be combined with authentication controls like MFA for best protection.

GTAG 1: Information Security Management – Recommends multi-factor authentication to prevent unauthorized system access.

GTAG 16: Identity and Access Management – Highlights the limitations of password-only security and supports multi-factor authentication.

GTAG 17: Auditing Network Security – Covers VPN usage but does not consider it a solution for password attacks.

GTAG 15: Information Security Governance – Discusses the role of security tools and authentication in securing user accounts.

Step-by-Step Explanation:IIA References for Validation:Thus, requiring two-step verification (B) is the most effective control against automated password attacks.

Data cleaning (also called data cleansing or scrubbing) is a critical step in data analytics to ensure accuracy, consistency, and reliability. Removing duplicate records is a key data cleaning technique that improves data quality.

Improves Data Integrity – Prevents misleading results caused by duplicate values.

Enhances Data Accuracy – Ensures that analytics are based on unique and valid information.

Optimizes Performance – Reduces redundancy, improving processing speed and efficiency.

Prevents Reporting Errors – Ensures accurate insights for decision-making.

A. Deploys data visualization tool – Visualization tools help interpret data but do not clean it.

B. Adopt standardized data analysis software – Software tools support analysis but do not eliminate duplicate records automatically.

C. Define analytics objectives and establish outcomes – This step is important for analysis strategy, but it does not clean data.

IIA’s GTAG on Data Analytics – Emphasizes the importance of data cleansing in ensuring reliable analytics.

COBIT 2019 (Data Management Framework) – Highlights duplicate removal as a best practice in data governance.

ISO 8000-110 (Data Quality Standard) – Recommends eliminating duplicate records for high-quality analytics.

Why Eliminating Duplicate Records is the Correct Answer?Why Not the Other Options?IIA References:✅ Final Answer: D. Eliminate duplicate records.

Integration testing is a phase in the software development lifecycle (SDLC) where individual components or systems are combined and tested as a group to ensure they work together correctly.

Ensures Component Compatibility – Confirms that different software modules and hardware components function correctly when integrated.

Identifies Data Flow Issues – Ensures seamless communication between software systems, databases, and external applications.

Detects System-Wide Errors – Finds defects that unit testing (individual module testing) may miss.

Prepares for System Testing – Integration testing is conducted before full system testing to ensure subsystems work together as expected.

A. To verify that the application meets stated user requirements.

This refers to User Acceptance Testing (UAT), not integration testing.

B. To verify that standalone programs match code specifications.

This describes unit testing, where individual components are tested separately.

C. To verify that the application would work appropriately for the intended number of users.

This describes performance or load testing, which measures system behavior under high user load.

IIA’s GTAG on IT Risks and Controls – Emphasizes the role of integration testing in ensuring secure and functional IT environments.

COBIT 2019 (Governance and Management of IT) – Recommends integration testing to reduce IT system failures.

ISO/IEC 25010 (Software Quality Model) – Lists integration testing as a key quality assurance step.

Why Option D is Correct?Why Not the Other Options?IIA References:

Owner’s equity represents the residual interest in a company’s assets after deducting liabilities. It is a fundamental concept in financial accounting, reflecting the net worth of a business.

Formula:Owner’s Equity=Assets−Liabilities\text{Owner’s Equity} = \text{Assets} - \text{Liabilities}Owner’s Equity=Assets−Liabilities

Represents the True Value of Ownership – It measures the owner's claim on the business after settling all obligations.

Directly Tied to the Accounting Equation – Assets=Liabilities+Owner’s Equity\text{Assets} = \text{Liabilities} + \text{Owner’s Equity}Assets=Liabilities+Owner’s Equity Rearranging the equation: Owner’s Equity=Assets−Liabilities\text{Owner’s Equity} = \text{Assets} - \text{Liabilities}Owner’s Equity=Assets−Liabilities

Commonly Used in Financial Statements – Found in the Balance Sheet under the "Equity" section.

B. Total assets – Incorrect because assets include both owner-financed and liability-financed resources.

C. Total liabilities – Incorrect because liabilities represent debts owed, not ownership value.

D. Owner’s contribution plus drawings – Incorrect because it only considers investments and withdrawals, not retained earnings or net assets.

IIA’s GTAG on Business Financial Management – Discusses financial statement analysis, including owner’s equity.

COSO’s Internal Control – Integrated Framework – Highlights financial reporting accuracy, including equity calculations.

IFRS & GAAP Accounting Standards – Define owner’s equity as assets minus liabilities in financial reporting.

Why Option A is Correct?Why Not the Other Options?IIA References: