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

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 411:

  A global industry is one that:

  A. Contains competitors that are multinationals.
  B. Has secured a competitive advantage based on economies of scale in centralized production.
  C. Has a strategic advantage by establishing coordinated competition in many national markets.
  D. Has made large direct investments abroad.
  C. Has a strategic advantage by establishing coordinated competition in many national markets.

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  Explanation

  The analysis of a competition in an industry requires consideration of the economics of the industry and the characteristics of competitors. However, in a global industry, the analysis is not limited to one market, but extends to all markets (geographic or national) taken together. Michael E. Porter defines a global industry as one in which the strategic positions of competitors in major geographic or national markets are fundamentally affected by their overall global positions."Thus, an industry becomes global because it perceives a net strategic advantage to competing, as Porter says, in a coordinated way in many national markets."

• Question 412:

  Groups have often evolved by self-set standards of performance and behavior, usually based on the personal and social backgrounds of the individuals on the job. This establishment of a group culture is referred to as developing:

  A. Role models.
  B. Cohesiveness.
  C. Conformity.
  D. Norms.
  D. Norms.

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  Explanation

  Norms are the standards of behavior adopted by a group when it is in its early stages. The norms of the group are often a composite of the personal and social backgrounds of the individuals who comprise the group.

• Question 413:

  Leadership situations vary with regard to the degree to which the leader can determine what subordinates will do, how the subordinates will do it, and what the results will be. Accordingto Fiedler's contingency theory, a leader with a relationship- oriented management style will be most effective when exerting:

  A. Great control.
  B. Moderate control.
  C. Little control.
  D. Great or little control.
  B. Moderate control.

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  Explanation

  A relationship-oriented manager is employee centered. His or her self-esteem is strongly affected by personal interactions with subordinates. Fiedler indicated that such a manager is most effective when not faced with the extremes of high or low control situations. High control follows from strong position power, a structured task, and good leader- member relations. A low-control situation has just the opposite characteristics. Ina high-control environment, a concern for personal relations may be unimportant. In a low-control situation, therelationship orientedleader may be unable to provide the needed task structuring. Thus, themoderate controlsituation is best. An example is an assembly-line situation (a structured task) in which leader-member relations are poor.

• Question 414:

  Which of the following would not impair the objectivity of internal auditor?

  A. Management assurance on risks.
  B. Implementing risk responses on behalf of management.
  C. Providing assurance that risks assessed are correctly evaluated.
  D. Setting the risk appetite.
  C. Providing assurance that risks assessed are correctly evaluated.

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  Explanation

• Question 415:

  In the years after the mind-service point of a depreciable asset which of the following depreciation methods will result in the highest depreciation expense?

  A. Sum of the years' digits
  B. Declining balance
  C. Double-declining balance
  D. Straight line
  A. Sum of the years' digits

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  Explanation

• Question 416:

  With the globalization of economies, many organizations have expanded their operations to international locations. As an advisor to management, an internal auditor will most likelyrecommend that a geocentric, or worldwide, attitude be adopted. Select the reason the geocentric attitude is preferred.

  A. It promotes a simpler organizational structure.
  B. It provides greater autonomy for host country managers.
  C. It provides the best balance of local and worldwide objectives.
  D. It promotes tighter organizational control.
  C. It provides the best balance of local and worldwide objectives.

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  Explanation

  According to Howard Perlmutter, the geocentric attitude toward international operations is world oriented. The intention is to balance local and worldwide objectives in all aspects of operations, to maintain global standards while permitting local managers to exercise appropriate discretion.

• Question 417:

  Entry into a new business may be made by internal development or acquisition. Entry through internal development usually involves creation of a full-fledged new business entity. The costs likely to be incurred by an internal entrant include:

  A. Investments to overcome entry barriers II. Change in the equilibrium level of supply and demand III. Lower prices charged by competitors IV. Higher marketing costs
  B. I and II only.
  C. I and IV only.
  D. II, Ill, and IV only.
  E. I, II, Ill, and IV.
  D. II, Ill, and IV only.

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  Explanation

  An internal entrant must cope with structural barriers and retaliation by existing firms. Costs incurred by the internal entrant include initial investments to overcome entry barriers (facilities, inventory, branding, technology, distribution channels, sources of materials, etc.), operating losses in the start-up phase, and the effects of retaliation (e.g., higher marketing costs, capacity expansion, or lower prices). Other costs include the price increases for factors of production that may result because of the new entry. Also, the capacity added to the industry by the entrant may affect the equilibrium level of supply and demand. The result may be additional competitive costs as firms with excess capacity cut prices.

• Question 418:

  The biggest advantage of oral communication overwritten communication is that oral communication

  A. Tends to be more accurate.
  B. Promotes feedback.
  C. Is less time-consuming.
  D. Does not provide a permanent record.
  B. Promotes feedback.

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  Explanation

  Oral communication promotes immediate feedback so that the sender knows that the message has been clearly received by the receiver.

• Question 419:

  An organization selected a differentiation strategy to compete at the business level. Which of the following structures best fits this strategic choice?

  A. Functional structure.
  B. Divisional structure.
  C. Mechanistic structure.
  D. Functional structure with cross-functional teams.
  B. Divisional structure.

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  Explanation

• Question 420:

  Which of the following is true concerning generic influence tactics?

  A. Consultation involves appealing to emotions, values, or ordeals.
  B. Ingratiating tactics attempt to raise the other person's self-esteem prior to a request.
  C. Coalition tactics try to convince others by reliance on a detailed plan, supporting evidence, and reason.
  D. Pressure tactics are based on the formal or informal support of higher management.
  B. Ingratiating tactics attempt to raise the other person's self-esteem prior to a request.

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  Explanation

  Management literature describes generic influence tactics that may be used in any direction. As noted by researchers, ingratiating tactics attempt to raise the other person's self-esteem prior to a request.