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

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 841:

  Which of the following is a major advantage of decentralized organizations, compared to centralized organizations?

  A. Decentralized organizations are more focused on organizational goals.
  B. Decentralized organizations streamline organizational structure.
  C. Decentralized organizations tend to be less expensive to operate.
  D. Decentralized organizations tend to be more responsive to market changes.
  D. Decentralized organizations tend to be more responsive to market changes.

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  Explanation

• Question 842:

  What is the primary risk associated with an organization adopting a decentralized structure?

  A. Inability to adapt
  B. Greater costs of control function
  C. Inconsistency in decision making
  D. Lack of resilience
  C. Inconsistency in decision making

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  Explanation

• Question 843:

  During her annual performance review, a sales manager admits that she experiences significant stress due to her job but stays with the organization because of the high bonuses she earns. Which of the following best describes her primary motivation to remain in the job?

  A. Intrinsic reward.
  B. Job enrichment.
  C. Extrinsic reward.
  D. The hierarchy of needs.
  C. Extrinsic reward.

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  Explanation

  https://www.verywellmind.com/what-is-extrinsic-motivation-2795164

• Question 844:

  Which of the following statements regarding flat and hierarchical internal audit functions is true?

  A. A flat structure creates an internal audit function that is highly knowledgeable and collaborative
  B. A hierarchical structure requires little supervision, and the work performed is consistent and reliable
  C. A flat structure allows for growth within the function and leads to the cultivation of diverse skills and fresh perspectives
  D. A hierarchical structure tends to result in a higher cost base due to higher salaries to retain auditors with high knowledge and experience
  D. A hierarchical structure tends to result in a higher cost base due to higher salaries to retain auditors with high knowledge and experience

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  Explanation

  In a hierarchical audit structure, work is reviewed across multiple levels of management, resulting in higher costs because highly skilled and experienced auditors are required for supervisory roles. This increases the cost base compared to a

  flat structure.

  Option A exaggerates benefits of a flat structure. Option B is incorrect because hierarchical structures require more--not less--supervision. Option C is misleading because flat structures typically limit growth opportunities due to fewer layers of

  promotion.

  IIA Practice Guide - Organizational Governance in Internal Audit.

• Question 845:

  A technology developer has entered a two-year contract with another organization to design new software. According to IIA guidance, which of the following provisions of this agreement would be the most effective to protect the developer's product knowledge and expertise?

  A. The right to audit.
  B. A performance measurement system.
  C. Defined roles and responsibilities.
  D. Intellectual property rights.
  D. Intellectual property rights.

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  Explanation

• Question 846:

  Which of the following characteristics applies to an organization that adopts a flat structure?

  A. The structure is dispersed geographically.
  B. The hierarchy levels are more numerous.
  C. The span of control is wide.
  D. The lower-level managers are encouraged to exercise creativity when solving problems.
  C. The span of control is wide.

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  Explanation

• Question 847:

  Managerial attitudes toward global operations are viewed by researcher HowardPerl mutteras a key to understanding multinational firms. An ethnocentric attitude is indicated by:

  A. An identification with the nationality of the host country.
  B. Collaboration between the firm's subsidiaries and the firm's central administration.
  C. A high volume of information flow in the form of orders and advice to subsidiaries.
  D. A staffing emphasis on finding and developing the best people in the world for key positions anywhere in the firm.
  C. A high volume of information flow in the form of orders and advice to subsidiaries.

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  Explanation

  An ethnocentric attitude assumes that the home country's people, practices, and ideas are superior to all others. Thus, the firm's identification is with the owner's nationality. Authority and decision making are centralized, so communication is likely to involve a high volume of information flow in the form of orders and advice to subsidiaries. Moreover, home-country standards are apt to be used for performance evaluation of entities and individuals. Also, this ethnocentric attitude is perpetuated by recruiting and developing home-country individuals for key posts throughout the firm. The advantages of an ethnocentric attitude are simplicity and close control. The disadvantages are social and political problems in foreign countries, poor feedback, ineffective planning, lack of flexibility and innovative thinking, and higher turnover of managers in foreign subsidiaries.

• Question 848:

  Which of the following is an indicator of interpersonal skills that are necessary for members of a team?

  A. Routinely keeps superiors, team members, and other appropriate parties informed of significant developments. II. Spends sufficient time cultivating contacts with peers to obtain timely information or resolve issues outside formal channels. III. Routinely assumes an appropriate amount of work or responsibility for group projects.
  B. I only.
  C. I and II only.
  D. II and Ill only.
  E. I, II, and Ill.
  B. I only.

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  Explanation

  Building trust is central to team effectiveness. Individuals build trust through use of interpersonal skills that include interaction, cooperation, and ability to deal with other people. Thus, trust is built through timely and accurate communication; supportive behavior; showing respect, e.g., by delegation and effective listening; fairness of evaluations; predictability of behavior and promise-keeping; and competence exemplified by sound judgment and technical proficiency. Thus, a trusted team member routinely keeps superiors, team members, and other appropriate parties informed of significant developments. S)he also spends sufficient time cultivating contacts with peers to obtain timely information or resolve issues outside formal channels. However, routinely assuming an appropriate amount of work or responsibility for group projects is indicative of team participation, not of the interpersonal skills required of team members.

• Question 849:

  An internal auditor is reviewing physical and environmental controls for an IT organization. Which control activity should not be part of this review?

  A. Develop and test the organization's disaster recovery plan.
  B. Install and test fire detection and suppression equipment.
  C. Restrict access to tangible IT resources.
  D. Ensure that at least one developer has access to both systems and operations.
  D. Ensure that at least one developer has access to both systems and operations.

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  Explanation

• Question 850:

  Michael E Porter developed what is popularly known as the diamond model for determining national advantages in the global business environment. According to this model.

  A. Factor conditions are production advantages that are nature-made or inherited.
  B. Foreign markets exert less influence than home markets on a firm's ability to detect demand trends.
  C. Reliance on related and supporting industries in the home country weakens a firm's international competitiveness.
  D. Cooperation with domestic competitors clearly aids international competitiveness.
  B. Foreign markets exert less influence than home markets on a firm's ability to detect demand trends.

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  Explanation

  Home demand conditions determine the inherent demand for goods or services that originate within the home country. Porter believes that home markets exert a much higher influence on a firm's ability to recognize consumer trends than those in a foreign market. Moreover, home demand offsets innovation and product development. Home demand is a function of

  (1)

  the mixture of customer needs and wants,

  (2)

  their scope and growth rate,

  (3)

  the means by which domestic preferences are communicated to international markets. Moreover, a national advantage is achieved when home demand provides more timely and clear trend indicators to domestic firms than to foreign firms.