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

IIA IIA-CIA-PART3 Online Questions & Answers

• Question 921:

  A junk bond issued at a premium will result in which of the following entries in the general ledger?

  A. A credit to non-current liabilities on the balance sheet.
  B. A debit to expenses on the profit and loss statement.
  C. A credit to revenue on the profit and loss statement.
  D. A debit to current assets on the balance sheet.
  A. A credit to non-current liabilities on the balance sheet.

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  Explanation

• Question 922:

  According to the waterfall cycle approach to systems development, which of the following sequence of events is correct?

  A. Program design, system requirements, software design, analysis, coding, testing, operations.
  B. System requirements, software design, analysis, program design, testing, coding, operations.
  C. System requirements, software design, analysis, program design, coding, testing, operations.
  D. System requirements, analysis, coding, software design, program design, testing, operations.
  C. System requirements, software design, analysis, program design, coding, testing, operations.

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  Explanation

• Question 923:

  An organization finalized a contract in which a vendor is expected to design, procure, and construct a power substation for $3,000,000. In this scenario, the organization agreed to which of the following types of contracts?

  A. A cost-reimbursable contract.
  B. A lump-sum contract.
  C. A time and material contract.
  D. A bilateral contract.
  B. A lump-sum contract.

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  Explanation

• Question 924:

  A global business organization is selecting managers to post to various international (expatriate) assignments. In the screening process, which of the following traits would be required to make a manager a successful expatriate?

  1. Superior technical competence.

  2. Willingness to attempt to communicate in a foreign language.

  3. Ability to empathize with other people.

  A. 1 and 2 only
  B. 1 and 3 only
  C. 2 and 3 only
  D. 1, 2, and 3
  C. 2 and 3 only

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  Explanation

• Question 925:

  In which of the following situations will organizational politics most likely have a significant impact?

  A. When space allocations are made according to objective criteria.
  B. When the budget allows for generous salary increases for all employees.
  C. When promotions are based on an employee's attitude.
  D. When performance outcomes are clearly stated and objective.
  C. When promotions are based on an employee's attitude.

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  Explanation

  Organizational politics, or impression management, is defined by Andrew Durbin as the pursuit of self- interest at work in the face of real or imagined opposition." Also, employees tend to believe that pursuit of self-interest at work in the form of career advancement is aided by playing politics. Hence, employees will try to, among other things, manage the impression of their attitudes held by superiors.

• Question 926:

  A company is rumored to be considering downsizing. Because a manager stops the use of all temporary employees, the staff concludes that some jobs will be lost. Which of the following is true about the manager's communication about job losses?

  A. The staff decoded the formal communication sent by the manager correctly.
  B. The manager properly encoded the idea in a message.
  C. The lack of a formal message had a negative impact on staff.
  D. The channel through which the message was sent was appropriate.
  C. The lack of a formal message had a negative impact on staff.

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  Explanation

  Management's lack of formal communication regarding possible downsizing caused the employees to draw their own negative conclusions based on a manager's actions. Management should formally communicate the reasons for eliminating the use of temporary employees or refute the rumor about downsizing.

• Question 927:

  Which of the following best describes a transformational leader, as opposed to a transactional leader?

  A. The leader searches for deviations from the rules and standards and intervenes when deviations exist.
  B. The leader intervenes only when performance standards are not met.
  C. The leader intervenes to communicate high expectations.
  D. The leader does not intervene to promote problem-solving.
  A. The leader searches for deviations from the rules and standards and intervenes when deviations exist.

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  Explanation

• Question 928:

  What is the key strategic issue when a firm is considering capacity expansion?

  A. Forecasting long-term demand.
  B. Analyzing the behavior of competitors.
  C. Identifying options.
  D. Avoiding industry overcapacity.
  D. Avoiding industry overcapacity.

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  Explanation

  Whether to expand capacity is a major strategic decision because of the capital required, the difficulty of forming accurate expectations, and the long time frame of the lead times and the commitment. The key forecasting problems are longterm demand and behavior of competitors. The key strategic issue is avoidance of industry overcapacity. Under capacity in a profitable industry tends to be a short-term issue. Profits ordinarily lure additional investors. Overcapacity tends to be a long-term problem because firms are more likely to compete intensely rather than reverse their expansion.

• Question 929:

  Management is pondering the following question:

  "How does our organization compete?"

  This question pertains to which of the following levels of strategy?

  A. Functional-level strategy.
  B. Corporate-level strategy.
  C. Business-level strategy.
  D. DepartmentsHevet strategy.
  C. Business-level strategy.

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  Explanation

  Understanding Strategic Levels in an Organization:

  Corporate-Level Strategy: Defines overall company direction , including mergers, acquisitions, and diversification.

  Business-Level Strategy: Focuses on how the company competes in its industry (e.g., cost leadership, differentiation).

  Functional-Level Strategy: Relates to specific departments (marketing, HR, IT) supporting business-level goals.

  Why Option C (Business-Level Strategy) is Correct?

  The question "How does our organization compete?" directly relates to business-level strategy .

  It focuses on competitive positioning within the industry, such as:

  Cost leadership (competing on price)

  Differentiation (unique product offerings)

  IIA Standard 2110 - Governance requires auditors to evaluate strategic alignment with competitive positioning.

  Why Other Options Are Incorrect?

  Option A (Functional-Level Strategy):

  Focuses on departmental decisions , not overall competition.

  Option B (Corporate-Level Strategy):

  Corporate strategy defines broad company direction , not specific competition strategies.

  Option D (Department-Level Strategy):

  Similar to functional strategy, it does not define how the company competes in the industry .

  Business-level strategy answers "How does our organization compete?" by defining industry- specific competitive approaches.

  IIA Standard 2110 supports governance over strategic positioning.

• Question 930:

  Which of the following is a distinguishing feature of managerial accounting, which is not applicable to financial accounting?

  A. Managerial accounting uses double-entry accounting and cost data.
  B. Managerial accounting uses general accepted accounting principles.
  C. Managerial accounting involves decision making based on quantifiable economic events.
  D. Managerial accounting involves decision making based on predetermined standards.
  D. Managerial accounting involves decision making based on predetermined standards.

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  Explanation