Business acumen, IT, and financial management concepts tested on CIA Exam Part 3.
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- What is the primary purpose of an organization's strategic plan?
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To establish long-term direction, objectives, and resource allocation aligned with organizational mission.- Define working capital in a business context.
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Current assets minus current liabilities; funds available for day-to-day operations.- What does IT governance establish?
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Framework for IT decision-making, accountability, and alignment with business objectives.- What is a control environment in internal auditing?
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The tone at the top; culture and values established by management regarding internal control importance.- Define operational risk.
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Risk of loss from inadequate or failed processes, systems, people, or external events.- What is the purpose of segregation of duties in internal controls?
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To separate authorization, execution, custody, and recording to prevent error or fraud.- What does Return on Investment (ROI) measure?
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Profit generated on capital invested, expressed as a percentage.- Define enterprise risk management (ERM).
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Integrated approach to identifying, assessing, and responding to risks across the entire organization.- What is a business process?
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Series of activities or tasks performed to achieve a specific business outcome or objective.- What is the role of the audit committee?
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Oversee internal audit, external audit, financial reporting, and risk management on behalf of the board.- Define information security.
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Protection of information assets from unauthorized access, modification, disclosure, or destruction.- What are the three lines of defense in internal audit?
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First: operational management controls. Second: risk management and compliance functions. Third: internal and external audit.- What is accounts receivable?
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Amount of money customers owe an organization for goods or services delivered.- Define cybersecurity risk.
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Threat of unauthorized digital access, data breach, or system compromise affecting business continuity.- What is the purpose of an internal audit function?
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Provide independent, objective assurance and advisory services to improve organizational effectiveness and manage risks.
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