IIA IIA-CIA-PART4 Online Practice Questions and Exam Preparation

IIA IIA-CIA-PART4 Online Questions & Answers

• Question 111:

  Which of the following is achieved by acquiring a minority common stock interest in a supplier?

  A. Quasi-integration.
  B. Tapered integration.
  C. Downstream integration.
  D. Forward integration.
  A. Quasi-integration.

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  Quasi-integration is something more than a long-term contract and less than full ownership. It may be achieved by a minority common stock interest, debt guarantees, cooperation in RandD, an exclusive dealing arrangement, etc. Buyer and seller may, as a result, have a special community of interest leading to lower costs, smoothing of supply/demand fluctuations, or mitigating against bargaining power. Quasi-integration may avoid commitment to an adjacent business with its investment and management requirements. But many benefits of full integration may not be achievable in this way.

• Question 112:

  Which of the following factors is critical for the success of participative management?

  A. Trust.
  B. Control.
  C. Information.
  D. Influence.
  A. Trust.

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  Trust is the key factor in any participative management approach. Management should take action to build trust as soon as groups are formed. If there is a lack of trust, then success is unlikely because both the team and management will act in their own self- interest and not the interest of the organization.

• Question 113:

  One of the keys to successful redesigning of jobs in order to motivate employees is:

  A. Creating autonomous work teams.
  B. Enlarging jobs by adding more tasks similar to tasks being performed.
  C. Rotating workers to different jobs to provide the workers with variety.
  D. Changing the content of jobs so that the jobs fit each worker's need for growth.
  D. Changing the content of jobs so that the jobs fit each worker's need for growth.

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  One of the major principles of successful job design and redesign is to consider employee needs and skills and match them with jobs. An alternative is to change the jobs to fit those needs and skills. The objective is to conform to strengths and to avoid weaknesses.

• Question 114:

  There are many types of third-party negotiations available to parties facing disagreement. If the goal is to be certain that settlement is reached, a negotiator with authority to make a decision should be selected. The best negotiator to select, given this goal, would be a(n):

  A. Mediator.
  B. Arbitrator.
  C. Consultant.
  D. Conciliator.
  B. Arbitrator.

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  An arbitrator has the authority to impose an agreement. Arbitration may be requested by the parties or may be imposed by law or by the terms of a contract.

• Question 115:

  A country has a comparative advantage in international trade when

  A. Firms in the country have a lower cost of production because of natural resources.
  B. It has an absolute advantage with respect to at least one input to production.
  C. Firms in the country have a lower cost of production because of transportation and other geographic factors.
  D. It produces whatever it can produce most efficiently.
  D. It produces whatever it can produce most efficiently.

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  A country has a comparative advantage when it can achieve a lower cost of production due to a focus on and a cooperative specialization in a particular product. The greatest advantage from trade is obtained when each nation specializes in producing what it can produce most efficiently. If nations specialize and then exchange with others, more is produced and consumed than if each nation tries to be self-sufficient. Specialization of labor is beneficial for individuals; the same principle applies to nations.

• Question 116:

  Formal groups are work groups within the organization assembled to perform a productive activity. How is a formal group similar to an informal group?

  A. Membership in both informal and formal groups tends to be permanent.
  B. Informal and formal groups develop their own leaders to fill the needs of the group.
  C. Informal and formal groups usually provide social satisfaction that supplements job satisfaction.
  D. Informal and formal groups are based on the organization's purpose and needs.
  C. Informal and formal groups usually provide social satisfaction that supplements job satisfaction.

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  The use of groups in organizations has often led to a higher degree of social satisfaction because members feel that they have contributed to a part of the group and gained the acceptance of their peers. Both informal and formal groups usually provide an employee with greater job satisfaction than the employee would otherwise have on his or her own.

• Question 117:

  The prospect for the long-term profitability of an existing firm is greater when:

  A. The firm operates in an industry with a steep learning curve in its production process.
  B. The costs of switching suppliers is low.
  C. New entrants are encouraged by government policy.
  D. Distribution channels are willing to accept new products.
  A. The firm operates in an industry with a steep learning curve in its production process.

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  The prospects of long-term profitability are contingent upon the industry's exit and entry barriers. The entry of new firms in a market decreases the prospect for long-term profitability. When a firm operates in an industry that has a steep learning curve, it is more difficult for new firms to enter the market. Thus, the prospects of long-term profitability are greater for an existing firm.

• Question 118:

  Which of the following is not one of the advantages of self-managed teams?

  A. Motivation is improved because decision making is decentralized.
  B. Improved processes of production if the teams are supported properly.
  C. Managerial acceptance by tradition-oriented managers.
  D. Improved communication because all members understand the team's activities better.
  C. Managerial acceptance by tradition-oriented managers.

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  Managerial resistance is often the primary obstacle of self-managed teams. Organizational change is difficult and tradition-oriented managers tend to regard self-managed teams as a threat to their status.

• Question 119:

  A manager has a small team of employees, but each individual is self-motivated and could be termed a "high achiever." The manager has been given a particularly difficult assignment. Even for a high achiever, the probability that this job can be completed by one individual by the required deadline is low. Select the best course for the audit manager.

  A. Assign one individual since high achievers thrive on high risks.
  B. Assign two employees to moderate the risk of failure.
  C. Assign all employees to ensure the risk of failure is low.
  D. Ask company management to cancel the job.
  B. Assign two employees to moderate the risk of failure.

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  High achievers wish to do something better than it has been done before. According to McClelland's theory of needs, high achievers thrive when the job provides for personal responsibility, feedback, and moderate risks. They avoid very easy or very difficult tasks, andthey do not like to succeed by chance. Accordingly, one high achiever should not be assigned a job when the probability of its successful completion is very low.

• Question 120:

  The advantages of vertical integration include:

  A. Increases in incentives.
  B. The ability to apply the same managerial methods to all subunits.
  C. The need to balance the operations of subunits.
  D. Stable relationships between internal sellers and buyers.
  D. Stable relationships between internal sellers and buyers.

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  Stable relationships between internal sellers and buyers create economies because they need not fear loss of the related buyers and sellers. They also need not fear undue economic pressure from each other. Furthermore, because the relationship is locked in, more efficient procedures for their relationship (e.g., dedicated controls and records) may be implemented. Another advantage is that internal sellers and buyers may more fully adapt to each other's needs than they would or could in dealings with outsiders.