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

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 231:

  Which of the following concepts of managerial accounting is focused on achieving a point of low or no inventory?

  A. Theory of constraints.
  B. Just-in-time method.
  C. Activity-based costing.
  D. Break-even analysis
  B. Just-in-time method.

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  Explanation

  The Just-in-Time (JIT) method is a managerial accounting and inventory management strategy that focuses on reducing or eliminating excess inventory by receiving goods only as needed .

  (A)

  Theory of constraints.

  Incorrect: The theory of constraints focuses on identifying and managing bottlenecks in production, not reducing inventory levels.

  (B)

  Just-in-time method. (Correct Answer)

  JIT aims to reduce waste, lower storage costs, and improve efficiency by ensuring that materials and products arrive only when needed .

  IIA GTAG 3 - Continuous Auditing suggests monitoring inventory controls to align with JIT principles.

  (C)

  Activity-based costing.

  Incorrect: Activity-based costing allocates costs to activities based on usage , not inventory reduction.

  (D)

  Break-even analysis.

  Incorrect: Break-even analysis calculates the level of sales needed to cover costs but does not focus on inventory management.

  IIA Standard 2120 - Risk Management: Encourages auditors to assess cost-management strategies like JIT.

  IIA GTAG 3 - Continuous Auditing: Supports real-time monitoring of inventory to minimize excess stock.

  Analysis of Each Option: IIA References Supporting the Answer:Thus, the correct answer is (B) Just-in-Time (JIT) method , as it focuses on achieving low or no inventory to optimize efficiency and reduce costs .

• Question 232:

  Which one of the following statements regarding communication along the grapevine in an organization is false?

  A. By maintaining open channels of communication, managers can minimize the damage thegrapevine can do in an organization.
  B. Attempts to totally eliminate the grapevine are unlikely to succeed.
  C. The grapevine communication network can exist in several patterns.
  D. The grapevine is rumor-mongering, and managers should not use the grapevine.
  D. The grapevine is rumor-mongering, and managers should not use the grapevine.

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  Explanation

  A grapevine is the name of the informal communication channel that exists in all organizations. The grapevine exists wherever there are people. Although the grapevine is usually accurate, it can carry gossip and rumor. The effective manager stays tuned into the grapevine and uses it constructively.

• Question 233:

  One change control function that is required in client/server environments, but is not required in mainframe environments, is to ensure that:

  A. Program versions are synchronized across the network.
  B. Emergency move procedures are documented and followed.
  C. Appropriate users are involved in program change testing.
  D. Movement from the test library to the production library is controlled.
  A. Program versions are synchronized across the network.

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  Explanation

• Question 234:

  Edward T. Hall has distinguished between high-context and low-context cultures. Which culture is high-context?

  A. United States.
  B. Canada.
  C. Germany.
  D. Japan.
  D. Japan.

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  Explanation

  Hall drew a distinction between high-context and low-context cultures. In high-context cultures (e.g., Japanese, Chinese, Arabic, and Korean), much meaning is transmitted by nonverbal cues and situational circumstances. Thus, a person's

  status in a firm, rank in society, and reputation convey the primary message.

  Section 2:Sec Two (51 to 90)

  Details:

  Industry and Market Analysis

• Question 235:

  For an industry to be genuinely global, it must be involved in which of the following significant activities?

  A. Licensing II. Export III. Direct Investment
  B. I. and II.
  C. II. or Ill.
  D. I. and lll.
  E. Ill. only.
  B. I. and II.

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  Explanation

  A genuinely global industry requires a firm to compete globally. Participation in foreign markets is usually by licensing; export; or, after the firm has obtained experience, direct investment. A genuinely global industry will have significant export activity or direct investment. Nevertheless, direct investment does not necessarily signal the existence of global competition. Direct investment also may occur when purely national factors determine a subsidiary's competitive position.

• Question 236:

  The primary difference between centralization and decentralization is:

  A. Separate offices for all managers.
  B. Geographical separation of divisional headquarters and central headquarters.
  C. The extent of freedom of decision making by many levels of management.
  D. The relative size of the firm.
  C. The extent of freedom of decision making by many levels of management.

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  Explanation

  The primary distinction between centralization and decentralization is in the degree of freedom of decision making by managers at many levels. In decentralization, decision making is at as low a level as possible. The premise is that the local manager can make better more informed) decisions than a centralized manager. Centralization is based on the theory that decision making must be consolidated so that activities throughout the organization may be more effectively coordinated. In most organizations, a mixture of these approaches is found to be best.

• Question 237:

  With regard to project management, which of the following statements about project crashing is true?

  A. It leads to an increase in risk and often results in rework.
  B. It is an optimization technique where activities are performed in parallel rather than sequentially.
  C. It involves a revaluation of project requirements and/or scope.
  D. It is a compression technique in which resources are added to the project.
  D. It is a compression technique in which resources are added to the project.

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  Explanation

  https://www.simplilearn.com/fast-tracking-vs-crashing-article#:~:text=What%20is%20Crashing%3F,for%20the%20least%20cost%20possible

• Question 238:

  According to the International Professional Practices Framework, internal auditors who are assessing the adequacy of organizational risk management processes should not:

  A. Recognize that organizations use different techniques for managing risk.
  B. Seek assurance that the key objectives of the risk management processes are being met.
  C. Determine and accept the level of risk for the organization.
  D. Treat the evaluation of risk management processes differently from the risk analysis used to plan audit engagements.
  C. Determine and accept the level of risk for the organization.

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  Explanation

• Question 239:

  An internal auditor found that several employees of a vendor were authorized to remotely access the internal assets management system. Which of the following should the auditor determine next?

  A. Whether there is a documented business need for the access.
  B. Whether access rights granted to vendor employees are read-only.
  C. Who to inform regarding the need to remove vendor employees' access rights.
  D. Who manages vendor employees' devices used to access the system.
  A. Whether there is a documented business need for the access.

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  Explanation

• Question 240:

  Which of the following is a benefit of decentralization?

  A. The head of the company is aware of and can influence all decisions before they are made.
  B. The company is operated as one unit.
  C. Specialists for a particular product have no authority but advise the company's top management.
  D. Decisions are made on a more timely basis.
  D. Decisions are made on a more timely basis.

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  Explanation

  Decentralization is the extent to which decision-making power is delegated within an entity. When approval from upper-level management is not required, lower-level managers can make more timely decisions because they are closer to the necessary sources of information.