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

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 211:

  An organization suffered significant damage to its local file and application servers as a result of a hurricane. Fortunately, the organization was able to recover all information backed up by its overseas third-party contractor.

  Which of the following approaches has been used by the organization?

  A. Application management.
  B. Data center management.
  C. Managed security services.
  D. Systems integration.
  B. Data center management.

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  Explanation

• Question 212:

  Maintenance cost at a hospital was observed to increase as activity level increased. The following data was gathered: Activity Level Maintenance Cost Month Patient Days Incurred January 5,600 $7,900 February 7,100 $8,500 March 5,000 $7,400 April 6,500 $8,200 May 7,300 $9,100 June 8,000 $9,800

  If the cost of maintenance is expressed in an equation, what is the independent variable for this data?

  A. Fixed cost.
  B. Variable cost.
  C. Total maintenance cost.
  D. Patient days.
  D. Patient days.

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  Explanation

• Question 213:

  The competitive factor that may lead to overbuilding in an industry is:

  A. The need of large customers to know that capacity exists to meet their long-term requirements.
  B. A significant first mover advantage.
  C. The advantage held by the capacity leader.
  D. The existence of high entry barriers.
  B. A significant first mover advantage.

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  Explanation

  First mover advantages may be significant. Thus, shorter lead times for ordering equipment, lower costs, and the ability to exploit an excess of demand over supply may encourage too many firms to expand.

• Question 214:

  Studies of managerial communications have indicated that:

  A. Most managers are excellent communicators.
  B. Managers spend most of their time communicating.
  C. Written communication takes more of a manager's time than oral communication.
  D. Most effective communicators will be good managers.
  B. Managers spend most of their time communicating.

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  Explanation

  Because communication is the process of conveying meaning or understanding from one person to another, managers must spend most of their time communicating with subordinates, peers, and superiors. They communicate organizational goals and plans downward, lower- evel results and problems upward, and coordinating information horizontally among peers or across organizational channels).

• Question 215:

  The decision to engage in the vertical integration of a firm is in large part a function of an analysis of throughput and economies of scale. If throughput is less than the efficient scale, the firm:

  A. Should acquire a capability equal to the firm's throughput.
  B. Must sell or buy in the open market if the firm vertically integrates at the efficient scale.
  C. Should engage in quasi-integration.
  D. Should not vertically integrate.
  B. Must sell or buy in the open market if the firm vertically integrates at the efficient scale.

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  Explanation

  Upstream (backward) or downstream (forward) integration is the acquisition of a capability that otherwise would be performed by external parties that are suppliers or customers, respectively, of the firm. Whether integration should occur depends on the firm's volume of transactions with the external parties (throughput) and the magnitude of the capability required to achieve necessary economies of scale. If the integrating firm's need is for a capability less than the efficient scale, one of its options is to acquire a capability with a cost inefficient scale. The other option is to acquire an efficient capability that provides excess output (in the upstream case) orcreates excess demand (from, for example, a distribution capability in the downstream case). This option will require the integrated firm to sell or buy in the open market. Thus, the second option carries the risk of having to deal with competitors.

• Question 216:

  Which of the following is a key factor in the development of a production budget for a manufacturing organization?

  A. Direct materials units required.
  B. Estimated ending unit inventory.
  C. Projected sales revenue.
  D. Variable overhead costs.
  B. Estimated ending unit inventory.

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  Explanation

• Question 217:

  An organization uses radio frequency identification (RFID) technology to identify vehicles authorized to enter a gated facility. The RFID reader scans the vehicle's license plate number, and if the number is on a pre-authorized list, a green light ashes, indicating to the security guard that he can push a button to open the gate. Which of the following controls should be added to ensure that a particular vehicle is authorized to enter the facility?

  A. The security guard should question the vehicle's driver, if the guard has any doubts.
  B. Physical characteristics of the vehicle should be described in the system.
  C. The security guard should send each access request to administrative personnel for validation prior to admitting the vehicle into the gated facility.
  D. Video surveillance cameras should be installed to provide a full view of the vehicle.
  B. Physical characteristics of the vehicle should be described in the system.

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  Explanation

• Question 218:

  What is the most likely generic strategic benefit of upstream vertical integration?

  A. It eliminates input cost distortion caused by the bargaining power of a strong customer.
  B. The supplier has returns exceeding the opportunity cost of capital.
  C. It eliminates the sales price distortion caused by the bargaining power of a strong supplier.
  D. The customer has returns lower than the firm's opportunity cost of capital.
  B. The supplier has returns exceeding the opportunity cost of capital.

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  Explanation

  Integration benefits include offsetting the bargaining power of strong suppliers and customers. If such parties have returns greater than the firm's opportunity cost of capital, the firm benefits even if no other advantages accrue from integration.

• Question 219:

  In response to a question posed by an internal auditor, management indicated that there is an agreement in place to quickly rent servers and desktop workstations to restore operations from tapes stored at an off-site location. Which of the following plans would the auditor most likely conclude is currently in place for the organization?

  A. A hot recovery plan.
  B. No recovery plan.
  C. A cold recovery plan.
  D. A warm recovery plan.
  A. A hot recovery plan.

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  Explanation

• Question 220:

  Which strategy in a global industry is most likely to rely on domestic content rules or high tariffs?

  A. A protected niche strategy.
  B. A national focus strategy.
  C. A national segment strategy.
  D. A global focus strategy.
  A. A protected niche strategy.

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  Explanation

  A protected niche strategy is applied in nations where global competitors are discouraged by governmental impediments, such as domestic content rules or tariffs. The strategy is designed to be effective in markets with governmental constraints and requires close attention to the national government.