IIA IIA-CIA-PART3 Online Practice Questions and Exam Preparation

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 1021:

  Forward downstream integration most likely:

  A. Allows the firm to protect its proprietary knowledge from suppliers.
  B. Implies that the firm can fully support an efficient subunit but has additional needs to be met in the market.
  C. May allow the firm's subunit(s) to maintain constant production rates while external parties bear the risk of fluctuations.
  D. Improves access to information about demand.
  D. Improves access to information about demand.

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  Explanation

  A strategic advantage of forward integration is that access to market information is improved. A forward subunit (the demand leading stage) controls the amount and mix of demand to besatisfied upstream. At the very least, forward integration improves the timeliness of (1) demand information, (2) production planning, (3) inventory control, and (4) the costs of being under- or over-stocked. It also may provide information about changing tastes, competitors' moves, and the ideal mix of products.

• Question 1022:

  A new production team has been formed by taking experienced high achievers from existing teams within the factory. The members of the new team have not been required to learn any new skills, and the machines used are identical to those used in their former teams. The team's production supervisor is a longtime employee of the organization but has not previously worked with any members of the new team. Despite the abilities and previous individual achievements of the individual team members, management is surprised by the mediocre performance of the new team. The best approach for the production supervisor to improve performance would be to:

  A. Increase pressure on the team through higher goals and reprimands.
  B. Replace the individuals on the team.
  C. Provide opportunities for the team members to socialize with each other.
  D. Do nothing now because it is too soon to draw any conclusions.
  C. Provide opportunities for the team members to socialize with each other.

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  Explanation

  As the team members work and socialize, cohesiveness will be enhanced because of the opportunity to discover commonalities and share experiences. However, performance may or may not improve as cohesiveness increases. Improvement is also contingent on the group's performance norms. A cohesive group enforces norms. Thus, if norms are high, greater cohesiveness should result in better performance.

• Question 1023:

  Which of the following security controls would be appropriate to protect the exchange of information?

  A. Firewalls.
  B. Activity logs.
  C. Antivirus software.
  D. File encryption.
  D. File encryption.

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  Explanation

  Comprehensive and Detailed In-Depth Explanation:

  File encryption protects the confidentiality and integrity of information during transmission and storage. It ensures that only authorized recipients can access the data by converting it into an unreadable format.

  Option A (Firewalls) - Prevents unauthorized access to networks but does not secure data exchange.

  Option B (Activity logs) - Tracks actions but does not protect data confidentiality.

  Option C (Antivirus software) - Protects against malware but does not encrypt data in transit.

  Thus, file encryption (Option D) is the best security control for protecting exchanged information.

  IIA IT Security and Encryption Controls

• Question 1024:

  Which of the following best describes a competitive strategy in which the organization focuses on attempts to be more efficient than competitors?

  A. Differentiation strategy
  B. Cost leadership strategy
  C. Focus strategy
  D. Portfolio strategy
  B. Cost leadership strategy

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  Explanation

• Question 1025:

  Which of the following factors is most likely to lead to a lack of cohesiveness in a project team?

  A. Prestige
  B. Small size.
  C. Competition
  D. Common threat
  C. Competition

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  Explanation

• Question 1026:

  Which of me Wowing summarizes information about the cash receipts and cash payments for a specific time period?

  A. Income statement
  B. Statement of cash flows.
  C. Balance sheet
  D. Owner's equity statement
  B. Statement of cash flows.

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  Explanation

• Question 1027:

  Communication must occur in various directions within an organization. The kind of communication that is the slowest is:

  A. Upward.
  B. Downward.
  C. Horizontal.
  D. Diagonal.
  A. Upward.

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  Explanation

  The directions of communication are upward, downward, horizontal, and diagonal. Upward communication is from a subordinate to a superior morale surveys, grievance procedures, interviews, conferences). It is usually slower and must overcome more barriers than other directions of communication. Moreover, subordinates may be hesitant to communicate with superiors when interpersonal problems arise.

• Question 1028:

  An organization and its trading partner rely on a computer-to-computer exchange of digital business documents. Which of the following best describes this scenario?

  A. Use of a central processing unit
  B. Use of a database management system
  C. Use of a local area network
  D. Use of electronic data Interchange
  D. Use of electronic data Interchange

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  Explanation

  Electronic Data Interchange ( EDI ) refers to the computer-to-computer exchange of business documents (such as purchase orders, invoices, and shipping notices) in a standard electronic format between business partners.

  Correct Answer (D - Use of Electronic Data Interchange)

  EDI enables real-time, automated business transactions between companies, reducing errors and increasing efficiency.

  The IIA GTAG 8: Audit of Inventory Management highlights EDI as a critical system for supply chain and procurement operations .

  Why Other Options Are Incorrect:

  Option A (Use of a Central Processing Unit - CPU):

  A CPU is a hardware component, not a method for exchanging business documents.

  Option B (Use of a Database Management System - DBMS):

  A DBMS stores and manages data but does not facilitate external document exchange between trading partners.

  Option C (Use of a Local Area Network - LAN):

  A LAN connects computers within an organization but does not enable document exchange between separate businesses .

  IIA GTAG 8: Audit of Inventory Management - Discusses EDI as an essential tool for automating business transactions.

  IIA Practice Guide: Auditing IT Controls - Recommends EDI for secure and efficient document exchange.

  Step-by-Step Explanation:IIA References for Validation:Thus, D is the correct answer because EDI is the best system for automated, computer-to-computer business document exchange.

• Question 1029:

  An organization with global headquarters in the United States has subsidiaries in eight other nations. If the organization operates with an ethnocentric attitude, which of the following statements is true?

  A. Standards used for evaluation and control are determined at local subsidiaries, not set by headquarters.
  B. Orders, commands, and advice are sent to the subsidiaries from headquarters.
  C. People of local nationality are developed for the best positions within their own country.
  D. There is a significant amount of collaboration between headquarters and subsidiaries.
  B. Orders, commands, and advice are sent to the subsidiaries from headquarters.

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  Explanation

• Question 1030:

  The market price is the most appropriate transfer price to be charged by one department to another in the same organization for a service provided when:

  A. There is an external market for that service.
  B. The selling department operates at 50 percent of its capacity.
  C. The purchasing department has more negotiating power than the selling department.
  D. There is no external market for that service.
  A. There is an external market for that service.

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  Explanation