IIA IIA-CIA-Part3 Real Exam Questions Test Engine Dumps Training With 405 Questions
IIA-CIA-Part3 Actual Questions Answers PDF 100% Cover Real Exam Questions
IIA IIA-CIA-Part3 Exam Syllabus Topics:
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NEW QUESTION 152
An organization has a compensation system for its managers based on a management-
objectives MBO) approach. The essential premise of MBO is that:
- A. Employees should be concerned with routine matters, and managers should attend to exceptions.
- B. Employees should participate in setting objectives.
- C. Compensation should be based on qualitative factors.
- D. Managers should establish objectives for their employees.
Answer: B
Explanation:
MBO involves mutual setting of objectives by the superior and the subordinate as a basis for performance evaluation. Based on the Theory if philosophy that employees want to work hard if they know what is expected, MBO requires 1) senior management participation and commitment to the program, 2) integration of the objectives for all subunits into a compatible system directed toward accomplishment of organizational objectives, 3) provision for regular reporting of performance, and 4) free and honest communication between superior and subordinates. Subordinates must make careful assessments of their abilities and their interests, and managers must "coach" subordinates rather than dictate their proper objectives.
Both sides must maintain flexibility to accommodate unforeseen changes, and the review and analysis of results before setting the next round of objectives is a vital part of the process.
NEW QUESTION 153
A file-oriented approach to data storage requires a primary record key for each file. Which of the following is a primary record key?
- A. The vendor number in an accounts payable master file.
- B. The vendor number in an open purchase order master file.
- C. All of the answers are correct.
- D. The vendor number in a closed purchase order transaction file.
Answer: A
Explanation:
The primary record key uniquely identifies each record in a file. Because there is only one record for each vendor in an accounts payable master file the vendor number would be the appropriate key.
NEW QUESTION 154
Quality cost indices are often used to measure and analyze the cost of maintaining or improving the level of quality. Such indices are computed by dividing the total cost of quality over a given period by some measure of activity during that period for example, sales dollars). The following cost data are available for a company for the month of March. The company's quality cost index is calculated using total cost of quality divided by sales dollars.
Sales US $400,000
Direct materials cost 100,000
Direct labor cost 80,000
Testing and inspection cost 6,400 Scrap and rework cost 16,800
Quality planning cost 2,800
Cost of customer complaints and returns 4,000
The quality cost index for March is:
- A. 7.5%
- B. 5.9%
- C. 6.5%
- D. 22.0%
Answer: A
Explanation:
The total cost of quality equals the sum of prevention costs quality planning), appraisal casts testing and inspection), internal failure casts scrap and rework), and external failure casts customer complaints and returns), or U $30,000 $2,800 + $6,400 + $16,800 + $4,000). The quality cost index equals the total casts of quality divided by sales. Thus, the quality cast index for March is 7.5% U $80,000 - U $400,000).
NEW QUESTION 155
Company F produces and sells two products. Product A costs US $10 per unit and Product B costs US $5 per unit. Product A is selling very well, but sales of Product B are low. In order to increase sales of Product B, Company F has begun setting a price of US $13 for one of each.
What is the pricing method?
- A. Collusive pricing.
- B. Value pricing.
- C. Product-bundle pricing.
- D. By-product pricing.
Answer: C
Explanation:
Product-bundle pricing entails selling combinations of products at a price lower than the combined prices of the individual items. This strategy promotes sales of items consumers might riot otherwise buy.
NEW QUESTION 156
All of the following are possible explanations for a significant unfavorable material efficiency variance except:
- A. Cutbacks in preventive maintenance.
- B. Production of more units than planned for in the master budget.
- C. A large number of rush orders.
- D. An inadequately trained and supervised labor force.
Answer: B
NEW QUESTION 157
When a manager generalizes from the evaluation of one or a few traits to the employee's total performance, she has made:
- A. A judgmental evaluation.
- B. An objective evaluation
- C. A projection.
- D. An evaluation subject to the halo effect.
Answer: D
Explanation:
The halo effect occurs when the appraiser judges one or a few employee traits and carries over this judgment to the evaluation of the employee's other traits. The converse of the halo effect is the horn effect. It occurs when the manager allows one negative trait to influence the evaluation of other traits.
NEW QUESTION 158
In an analysis of alternative credit-management policies, which of the following components will cause the net present value of receivables on credit sales to increase, if everything else remains constant?
- A. A higher cost per unit sold.
- B. A tougher collections policy that reduces the bad debt loss ratio.
- C. A longer average collection period.
- D. An increase in the cost of capital.
Answer: B
NEW QUESTION 159
Which of the following inventory items would be the most frequently reviewed in an ABC inventory control system?
- A. Expensive, frequently used, low stock-out cost items with long lead times.
- B. Inexpensive, frequently used, high stock-out cost items with long lead times.
- C. Expensive, frequently used, high stock-out cost items with long lead times.
- D. Expensive, frequently used, high stock-out cost items with short lead times.
Answer: C
Explanation:
The ABC system is a method for controlling inventories that divides inventory items into three groups: Group A -- high-monetary value items, which account for a small portion perhaps 10%) of the total inventory usage Group B -- medium-monetary value items, which may account for about 20°10 of the total inventory items
Group C -- low-monetary value items, which account for the remaining 70% of sales or usage The ABC system permits the proper degree of managerial control to be identified and exercised over each group. Group A items are reviewed on a regular basis. Group B items may not have to be revered as often as group A items, but more often than group C items. For group C, extensive use of models and records is not cost effective. It is cheaper to order large quantities infrequently. The ABC method therefore reduces the safety-stock investment because high-value items are frequently monitored and medium-value items are monitored more often than inexpensive items. Frequent review can prevent stockouts and decrease inventory levels, and the cost of such review is minimized if it is limited to high- or mediumvalue items.
NEW QUESTION 160
Which of the following statements about market signaling is correct?
1. The organization releases information about a new product generation.
2. The organization limits a challenger's access to the best source of raw materials or labor.
3. The organization announces that it is fighting a new process technology.
4. The organization makes exclusive arrangements with the channels.
- A. 1 and 3 only
- B. 2 and 3 only
- C. 2 and 4 only
- D. 1 and 4 only
Answer: A
NEW QUESTION 161
Which one of the graphs depicts the demand curve for prestige goods?
- A. Option C
- B. Option D
- C. Option A
- D. Option C
Answer: A
Explanation:
Over some intermediate range of prices, the reaction to a price increase for prestige goods is an increase, not a decrease, in the quantity demanded. Within this range, the demand curve is upward sloping. The reason is that consumers interpret the higher price to indicate a better or more desirable product. Above some price level, the relation between price and quantity} demanded will again became negatively sloped.
NEW QUESTION 162
An advantage of using bar codes rather than other means of identification of parts used by
a manufacturer is that:
- A. Vendors use the same identification methods.
- B. Vendors can use the same part numbers.
- C. The movement of parts is easily and quickly recorded.
- D. The movement of all parts is controlled.
Answer: C
Explanation:
A reason to use bar codes rather than other means of identification is to record the movement of parts with minimal labor costs.
NEW QUESTION 163
The following data were extracted from the financial statements of a company for the year ended December 31.
- A. US $17.000
- B. US $11.000
- C. US $69.000
- D. US $54.000
Answer: B
Explanation:
Depreciation and amortization are noncash expenses and are added to profit A decrease in receivables indicates that cash collections exceed sales on an accrual basis, so it is added to profit. To account for the difference between cost of goods sold a deduction from profit) and cash paid to suppliers, a two-step adjustment of profit is necessary. The difference between CGS and purchases is the change in inventory. The difference between purchases s and the amount paid to suppliers is the change in accounts payable.
Accordingly, the conversion of .s to cash paid to suppliers requires deducting the inventory increase and adding the accounts payable increase. An increase in plant assets indicates an acquisition of plant assets, causing a decrease in cash, so it is deducted. An increase in share capital represents a cash inflow and is added to profit A decrease in short-term notes payable is deducted from profit because it reflects a cash outflow. Thus, cash increased by US $11.000$70,000 profit + $14,000 + $1.000 + $2,000 - $9,000 +$4.000 - $47.000 T $31.000 - $55,000}.
NEW QUESTION 164
Which of the following statements is true regarding the use of public key encryption to secure data while it is being transmitted across a network?
- A. The key used to encrypt the data is kept private but the key used to decrypt the data is made public.
- B. The key used to encrypt the data is made public but the key used to decrypt the data is kept private.
- C. Both the key used to encrypt the data and the key used to decrypt the data are made public.
- D. Both the key used to encrypt the data and the key used to decrypt the data are made private.
Answer: B
NEW QUESTION 165
Which of the following is useful for forecasting the required level of inventory?
1. Statistical modeling.
2. Information about seasonal variations in demand.
3. Knowledge of the behavior of different business cycles.
4. Pricing models linked to seasonal demand.
- A. 1, 2, 3, and 4
- B. 2 and 3 only
- C. 1 and 2 only
- D. 1, 2, and 3 only
Answer: D
NEW QUESTION 166
The effect of just-in-time production approaches:
- A. Reduces the cost of implementing strategies.
- B. Increases the need for a dependable workforce.
- C. Reduces the dependency on suppliers.
- D. Decreases production facility flexibility.
Answer: A
Explanation:
Just-in-time JIT) production approaches can reduce the cost of production. It lowers or eliminates inventory costs and requires production improvements to eliminate product defects.
NEW QUESTION 167
Which of the following should be established by management during implementation of big data systems to enable ongoing production monitoring?
- A. Key performance indicators
- B. Master data management
- C. Reports of software customization
- D. Change and patch management
Answer: A
NEW QUESTION 168
An employee frequently uses a personal smart device to send and receive work-related emails. Which of the following controls would be most effective to mitigate security risks related to these transmissions?
- A. Data encryption.
- B. Authentication.
- C. Software encryption
- D. Hardware encryption.
Answer: A
NEW QUESTION 169
The auditor wishes to determine if the change in investment income during the current year was due to a) changes in investment strategy, b) changes in portfolio mix, or c) other factors. Which of the following analytical review procedures should the auditor use?
- A. Simple linear regression that compares investment income changes over the past 5 years to determine the nature of the changes.
- B. Ratio analysis that compares changes in the investment portfolio on a monthly basis.
- C. Multiple regression analysis that includes independent variables related to the nature of the investment portfolio and market conditions.
- D. Trend analysis that compares the changes in investment income as a percentage of total assets and of investment assets over the past 5 years.
Answer: C
Explanation:
Regression analysis develops an equation to explain the behavior of a dependent variable for example, investment income) in terms of one or more independent variables for example, market risk and the risks of particular investments). Multiple regression analysis is the best approach because it allows the auditor to regress the change in investment income on more than one independent variable.
NEW QUESTION 170
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