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

Role of a Witness in Contract Signing:

A witness is a neutral third party who observes the signing of a contract and confirms that the named individuals actually signed the document.

This helps prevent disputes regarding the authenticity of signatures and provides legal proof of agreement.

Why Signature Validation is the Primary Role:

Ensures legitimacy: A witness confirms that the signatures belong to the stated individuals, preventing forgery.

Legal enforceability: Many jurisdictions require witnesses for contracts to be legally binding in certain cases (e.g., wills, real estate agreements).

Provides evidence in case of disputes: If a signatory later denies signing, the witness can testify to the authenticity of the signature.

Why Other Options Are Incorrect:

A. A witness verifies the quantities of the copies signed – Incorrect.

A witness does not count copies; their role is to verify authentic signatures.

B. A witness verifies that the contract was signed with the free consent of the promisor and promisee – Incorrect.

While witnessing may imply that parties were present, it does not guarantee free consent (coercion concerns require separate legal evidence).

C. A witness ensures the completeness of the contract between the promisor and promisee – Incorrect.

Contract completeness is a legal or managerial responsibility, not a witness’s role.

IIA’s Perspective on Contract Verification and Internal Controls:

IIA Standard 2120 – Risk Management requires internal auditors to ensure proper contract validation and documentation.

COSO Internal Control Framework highlights the importance of contract controls, including witnessed signings for fraud prevention.

International Contract Law Principles emphasize the role of witnesses in reducing contract disputes.

IIA References:

IIA Standard 2120 – Risk Management in Contract Management

COSO Internal Control Framework – Legal Documentation and Witnessing

International Contract Law Principles – Witnessing Signatures for Legal Validity

Thus, the correct and verified answer is D. A witness validates that the signatures on the contract were signed by the promisor and promisee.

A core feature of blockchain technology is immutability—once data is recorded, it cannot be altered or deleted. While this supports integrity and transparency, it also creates a conflict with data privacy regulations such as the General Data Protection Regulation (GDPR), which grants individuals the “right to be forgotten.” The inability to erase personal data stored on blockchain creates a compliance challenge.

Options A and B are incorrect: phishing is not inherent to blockchain, and transactions are not easily tampered with (immutability actually prevents that). Option C is misleading because regulations address data use but do not “overregulate” blockchain specifically.

Comprehensive and Detailed In-Depth Explanation:

A Project Management Information System (PMIS) is a centralized tool used throughout a project's planning, execution, and monitoring phases. It helps track schedules, costs, and risks.

Option A (EVM) – Used primarily in monitoring and control phases, not all three.

Option B (Organizational procedures) – Provides guidance but is not actively used in all project phases.

Option C (Performance measurement) – Important in monitoring, but not central to planning or execution.

Since PMIS is used throughout the project lifecycle, Option D is correct.