IIA-CIA-Part3 Reviews Questions

Depreciation is the systematic allocation of an asset’s cost over its useful life. It reflects how much of the asset’s value is used up in each accounting period.

Spreads Cost Over Time – Instead of expensing the total cost immediately, depreciation distributes it across multiple periods.

Matches Expenses with Revenue – Ensures that the cost of long-term assets is allocated in the periods they generate revenue.

Required for Financial Reporting – Compliance with GAAP and IFRS requires proper allocation of asset costs.

B. It is a process of asset valuation – Incorrect because depreciation does not determine market value; it only spreads cost over time.

C. It is a process of accumulating adequate funds to replace assets – Incorrect because depreciation is an accounting concept, not a savings mechanism.

D. It is a process of measuring decline in the value of assets because of obsolescence – Incorrect because depreciation allocates cost, not necessarily measuring value decline (which is impairment).

IIA’s GTAG on Financial Controls and Reporting – Defines depreciation as a cost allocation method.

International Financial Reporting Standards (IFRS 16) & US GAAP (ASC 360) – State that depreciation is used to allocate asset costs over time.

COSO’s Internal Control Framework – Covers accounting treatments for fixed assets.

Why Depreciation is an Allocation Process?Why Not the Other Options?IIA References:✅ Final Answer: A. It is a process of allocating cost of assets between periods.

Understanding IT Backup Risks in Disaster Recovery:

Disaster recovery plans rely on backup data to restore operations after a system failure.

An ineffective backup system increases the risk of data loss, operational downtime, and regulatory non-compliance.

Why Option B (Empty Backup Tapes) Is Correct?

If backup tapes contain empty spaces, it indicates data corruption or incomplete backups, leading to unrecoverable data loss in a disaster.

IIA GTAG 16 – Data Management and IT Auditing emphasizes that backups must be tested for integrity and completeness.

ISO 27001 and NIST SP 800-34 recommend periodic verification of backup data to prevent critical failures.

Why Other Options Are Incorrect?

Option A (Delayed return of backup tapes):

While delayed tape retrieval affects recovery speed, it does not indicate data loss.

Option C (More frequent backups than required):

Frequent backups improve data protection, not cause unacceptable loss.

Option D (Less frequent offsite backups):

While infrequent backups increase risk, they do not directly indicate data loss upon testing.

Backup tapes containing empty spaces indicate potential data loss, making it the most critical disaster recovery risk.

IIA GTAG 16, ISO 27001, and NIST SP 800-34 highlight the need for validated backup integrity.

Final Justification:IIA References:

IIA GTAG 16 – Data Management and IT Auditing

ISO 27001 – Information Security Backup Standards

NIST SP 800-34 – Contingency Planning for IT Systems

Comprehensive and Detailed Step-by-Step Explanation with All IIA References:

Understanding Decentralized Organizational Structures

A decentralized organization distributes decision-making authority to lower levels of management and employees rather than concentrating power at the top.

This structure requires a strong organizational culture to ensure alignment with company goals since direct oversight is reduced.

Why Option A is Correct?

Higher reliance on organizational culture is necessary in decentralized organizations because:

Employees must make independent decisions that align with company values and objectives.

Leaders trust teams to operate autonomously, which requires a shared sense of mission and ethics.

IIA Standard 2110 – Governance emphasizes the importance of corporate culture in managing risks within decentralized structures.

Decentralization requires informal controls like culture, rather than rigid policies and electronic monitoring.

Why Other Options Are Incorrect?

Option B (Clear expectations set for employees):

While clear expectations are important, they are common in both centralized and decentralized structures and do not distinguish decentralization.

Option C (Electronic monitoring techniques employed):

Centralized organizations are more likely to use electronic monitoring for control. Decentralized structures rely more on trust and culture.

Option D (Defined code for employee behavior):

Both centralized and decentralized organizations have codes of conduct, but culture plays a stronger role in decentralized settings.

Decentralized organizations rely on strong corporate culture to ensure employees make decisions aligned with organizational goals.

IIA Standard 2110 supports corporate culture as a key element in governance and risk management.

Final Justification:IIA References:

IPPF Standard 2110 – Governance (Corporate Culture & Risk Management)

COSO ERM Framework – Culture & Decision-Making in Decentralized Structures

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.