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

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 751:

  Which factor increases the threat of entry into an industry?

  A. Economies of scale are significant.
  B. Capital requirements are high.
  C. An industry leader may retaliate against a new entrant.
  D. Exit barriers are low.
  D. Exit barriers are low.

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  Explanation

  The most favorable condition for the attractiveness of an industry is the existence of high entry barriers and low exit barriers. When the threat of new entrants is minimal and exit is not difficult, returns are high, and risk is reduced in the event of poor performance. Low entry barriers keep long-term profitability low because new firms can enter the industry, increasing competition and lowering prices and the market shares of existing firms. Exit barriers are reasons for a firm to remain in an industry despite poor (or negative) profits.

• Question 752:

  Which of the following factors is least likely to affect a manager's direct span of control?

  A. Frequency of supervisor-subordinate contact.
  B. The manager's willingness to delegate authority.
  C. The manager's training and communication skills.
  D. Number of people in the corporation.
  D. Number of people in the corporation.

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  Explanation

  The optimal span of control is the number of subordinates that a given manager can effectively supervise. It is a function of many situational factors. However, the total number of people in an organization has no bearing on the optimal span of control of a particular manager.

• Question 753:

  Which of the following is not a common feature of cumulative preferred stock?

  A. Priority over common stock with regard to dilution of shares.
  B. Priority over common stock with regard to earnings.
  C. Priority over common stock with regard to dividend payment.
  D. Priority over common stock with regard to assets.
  A. Priority over common stock with regard to dilution of shares.

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  Explanation

• Question 754:

  When a multinational firm decides to sell its products abroad, one of the risks the firm faces is that the government of the foreign market charges the firm with dumping. Dumping occurs when

  A. The same product sells at different prices in different countries.
  B. A firm charges less than the cost to make the product so as to enter or win a market.
  C. Lower quality versions of the product are sold abroad so as to be affordable.
  D. Transfer prices are set artificially high so as to minimize tax payments.
  B. A firm charges less than the cost to make the product so as to enter or win a market.

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  Explanation

  Dumping is an unfair trade practice that violates international agreements. It occurs when a firmcharges a price (1) lower than that in its home market or (2) less than the cost to make the product. Dumping may be done to penetrate a market or as a result of export subsidies.

• Question 755:

  What governmental factor most likely will lead to overbuilding in a global industry?

  A. Tax incentives are given to local subsidiaries of foreign firms.
  B. The government favors an indigenous industry that has a small minimum efficient scale.
  C. Environmental regulations are imposed on domestic firms.
  D. Anti-bribery laws impede domestic firms from competing globally.
  A. Tax incentives are given to local subsidiaries of foreign firms.

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  Explanation

  Governmental factors may lead to overbuilding. For example, tax incentives may promote excess capacity by permitting foreign subsidiaries to pay no tax on earnings retained in the business. A nation also may wish to create an indigenous industry. When the minimum efficient scale is great in relation to world demand, the excess production in the country may contribute to global overcapacity. Furthermore, governmental employment pressures may result in overbuilding to create jobs or avoid job loss.

• Question 756:

  An organization is experiencing a high turnover. Which of the following can human resources deploy to effectively detect the root cause of turnover?

  A. Require regular performance appraisals
  B. Perform exit interviews
  C. Encourage periodic rotation of employee duties.
  D. Ensure mandatory vacations
  B. Perform exit interviews

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  Explanation

• Question 757:

  Which of the following controls is the most effective for ensuring confidentially of transmitted information?

  A. Firewall.
  B. Antivirus software.
  C. Passwords.
  D. Encryption.
  D. Encryption.

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  Explanation

  Ensuring the confidentiality of transmitted information is crucial to protect data from unauthorized access during transmission. Here's an analysis of the provided options: Option A: Firewall:

  A firewall monitors and controls incoming and outgoing network traffic based on predetermined security rules. While it helps prevent unauthorized access to or from a private network, it doesn't encrypt the data being transmitted. Therefore, it

  doesn't ensure the confidentiality of the data during transmission.

  Option B: Antivirus Software:

  Antivirus software is designed to detect, prevent, and remove malicious software. It protects the system from malware but doesn't play a role in securing the confidentiality of data during transmission.

  Option C: Passwords:

  Passwords are used to authenticate users and control access to systems and data. While they help ensure that only authorized users can access certain information, they don't protect data during transmission from interception or

  eavesdropping.

  Option D: Encryption:

  Encryption involves converting plaintext data into a coded form (ciphertext) that is unreadable to unauthorized parties. Only those possessing the correct decryption key can convert the data back into its original form. By encrypting data before

  transmission, even if the data is intercepted, it remains unintelligible without the decryption key, thereby ensuring confidentiality. Encryption is widely recognized as one of the most effective methods for protecting data confidentiality during

  transmission.

  In conclusion, among the options provided, encryption is the most effective control for ensuring the confidentiality of transmitted information, making option D the correct answer.

• Question 758:

  A firm considering entry into a market abroad may make the selection based on many criteria.

  For example, a Portuguese firm applying a psychic proximity criterion will most likely choose to enter which market?

  A. Afghanistan.
  B. China.
  C. India.
  D. Brazil.
  D. Brazil.

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  Explanation

  Psychic proximity means the nearness of the market's culture, language, and laws to those of the firm's home country. For example, Portuguese is spoken in Brazil.

• Question 759:

  In accordance with Michael E Porter's generic strategies model, a firm with a broad competitive scope that has high sales volume, low margins, and efficient supply and distribution channels will most likely choose a

  A. Cost leadership strategy.
  B. Cost focus strategy.
  C. Differentiation strategy.
  D. Focused differentiation strategy.
  A. Cost leadership strategy.

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  Explanation

  Cost leadership is the generic strategy favored by firms that seek competitive advantage through lower costs and that have a broad competitive scope. Such a firm can earn higher profits than its competitors at the industry average price or charge a lower price to increase market share. The typical firm that follows a cost leadership strategy has low profit margins, a high volume of sales, and a substantial market share. Such a firm has efficient supply and distribution channels; is capable of large capital investment; if it is a manufacturer, has strengths in product design and process engineering; and closely supervises its labor force.

• Question 760:

  Which of the following is a key responsibility of a database administrator?

  A. Troubleshoot end user problems
  B. Provide production support.
  C. Provide physical security of databases
  D. Maintain database integrity
  D. Maintain database integrity

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  Explanation