Free IIA-CIA-Part3 IIA Updates

Comprehensive and Detailed In-Depth Explanation:

The discounted payback period is a capital budgeting technique that determines how long it takes for a project to recover its initial investment, accounting for the time value of money.

Option A (Calculates the overall project value) describes Net Present Value (NPV), not the payback period.

Option B (Ignores the time value of money) applies to the simple payback period, but the discounted payback period does account for the time value of money.

Option D (Begins at time zero) is true for all capital budgeting methods, not specific to this one.

Thus, option C is correct because the discounted payback period measures the break-even time while considering the present value of cash flows.

The most effective way to ensure adherence to updated methodologies is through training that reviews and explains the changes in detail. A recorded training session allows all auditors to learn consistently and revisit the content as needed.

Option A improves accessibility but does not ensure understanding or compliance. Option B documents acknowledgment but does not ensure comprehension. Option D provides awareness but lacks sufficient depth.

Understanding the Three Lines of Defense Model:

First Line of Defense (Operational Management): Performs daily IT security tasks, such as blocking unauthorized traffic and encrypting data.

Second Line of Defense (Risk Management & Compliance): Monitors and reviews security controls, including disaster recovery testing and risk management activities.

Third Line of Defense (Internal Audit): Provides an independent assessment of IT security controls.

Why Option C (Review Disaster Recovery Test Results) Is Correct?

The second line of defense is responsible for monitoring and evaluating IT risk management processes, including disaster recovery and business continuity planning.

Reviewing disaster recovery test results ensures that the organization is prepared for IT disruptions and meets compliance requirements.

IIA Standard 2110 – Governance requires auditors to evaluate whether IT risk management activities (such as disaster recovery) are being effectively monitored.

Why Other Options Are Incorrect?

Option A (Block unauthorized traffic):

This is a first-line defense task, typically handled by IT security teams (e.g., firewall and intrusion detection system monitoring).

Option B (Encrypt data):

Encryption is part of daily IT security operations and is handled by the first line of defense.

Option D (Provide an independent assessment of IT security):

Independent assessments are the responsibility of internal audit (third line of defense), not the second line.

The second line of defense focuses on monitoring IT risk, making disaster recovery test review a key responsibility.

IIA Standard 2110 and the Three Lines of Defense Model confirm this role.

Final Justification:IIA References:

IPPF Standard 2110 – Governance (IT Risk Management)

IIA Three Lines of Defense Model

COBIT Framework – IT Governance & Risk Management

Comprehensive and Detailed In-Depth Explanation:

A matrix organization combines functional and product-based structures, allowing employees to work across multiple departments and report to multiple managers. This enables businesses to utilize expertise from various areas efficiently.

Option A (Unity of command) does not apply to matrix organizations, as employees often report to multiple supervisors.

Option C (Variable authority and accountability) is a secondary characteristic but does not define matrix structures.

Option D (Best for scattered locations/multi-line firms) applies more to divisional rather than matrix structures.

Thus, the correct answer is B, as matrix structures enable collaboration across functional and product teams.