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

IIA IIA-CIA-PART4 Online Questions & Answers

• Question 191:

  Entry into a new business may be by acquisition. An acquisition is most likely to earn aboveaverage profits when:

  A. The firm has competition from an irrational bidder.
  B. The economy is strong.
  C. The firm pays the seller a premium over the expected present value to the seller.
  D. The firm has a unique ability to operate the seller.
  D. The firm has a unique ability to operate the seller.

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  The buyer may have a unique ability to operate the seller. Thus, the buyer may (1) be uniquely able to improve operations or

  (2) purchase a firm in an industry that meets one of the conditions for an internal entrant to earn above- average profits (e.g., low entry costs or disequilibrium).

• Question 192:

  Frederick Herzberg postulated a two-factor theory of human behavior that included satisfiers anddissatisfies. Which of the following is adissatisfied?

  A. Promotion to another position.
  B. Salary.
  C. Challenging work.
  D. Responsibility.
  B. Salary.

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  Frederick Herzberg's two-factor theory of human behavior postulates that there are two classes of factors in the job situation. Maintenance of hygiene factors dissatisfiers) are those the presence of which will not especially motivate people but the absence of which will diminish performance. These factors are extrinsic to the work itself. They include supervision, working conditions, interpersonal relations, salary, and status. Motivational factors (satisfiers) are those the absence of

  which will not diminish performance but the addition or availability of which will motivate employees. Intrinsic to the work itself, these include achievement, recognition, challenging work, advancement, growth in the job, and responsibility.

• Question 193:

  According to a model developed by Arthur D Little, a firm with a better-than-average chance to improve its competitive position is in a

  A. Favorable position.
  B. Dominant position.
  C. Tenable position.
  D. Weak position.
  A. Favorable position.

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  A firm in a favorable position has strengths that it can exploit. Thus, it has better-than average chance to improve its position but is not as well placed as a dominant or strong firm.

• Question 194:

  The structure of an organization generally follows its overall strategy. At one end are loosely structured, organic organizations. At the other end are highly centralized, tightly controlled, mechanistic organizations. Consider the overall strategy of a company that is a pioneer in the combination of laser and robotic technologies. The company's scientists and engineers hold many patents. They are continually looking for ways to improve their products as well as to introduce new ones. Identify the most appropriate structural option for this organization.

  A. Mechanistic.
  B. Imitative.
  C. Organic.
  D. Bureaucratic.
  C. Organic.

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  Organizational structure depends on the company's overall strategy. This organization has adopted an innovation strategy. It introduces major new products or services. The structure that provides the flexibility required for major innovation is organic, a form of organization characterized by a loose structure, low division of labor, low formalization, and decentralization.

• Question 195:

  Which of the following is a source of communication breakdown within an organization due to a sense of superiority by members of a particular culture?

  A. Perceptual problem.
  B. Stereotyping.
  C. Ethnocentrism.
  D. Uncertainty avoidance.
  C. Ethnocentrism.

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  Ethnocentrism is the attitude that one's own group is superior. It is perpetuated through the value structures and nationalistic spirit of the people.

• Question 196:

  In an internal audit department, group decision making would be most appropriate for determining whether to:

  A. Report a significant audit finding that is critical of management.
  B. Expand an audit program because of uncertainty and risk regarding the operations of the audited entity.
  C. Expand audit procedures when initial sample results indicate a strong possibility of fraud.
  D. Review a critical audit finding with the client before preparation of the engagement final communication.
  B. Expand an audit program because of uncertainty and risk regarding the operations of the audited entity.

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  Whether to expand an audit program because of uncertainty and risk regarding the operations of the audited entity is a matter of professional judgment. In discretionary matters of this kind, the advantages of group decision making become evident. The group has a greater base of knowledge than an individual and provides multiple perspectives. Furthermore, the extended discussions among group members clarify the issues and aid in understanding the reasons fordifferent actions. Also, the participants are likely to accept, or take ownership of, the final decision. In addition, the process provides training for the group's less experienced members.

• Question 197:

  The behavioral science literature identifies diffusion as an effective approach to resolving conflict. An auditor effectively using diffusion in working with a confrontationalauditedwould:

  A. Set aside critical issues temporarily and try to reach agreement on less controversial issues first.
  B. Emphasize differences between the parties.
  C. Avoid the conflict situation.
  D. Identify the sources of conflict and address them directly.
  A. Set aside critical issues temporarily and try to reach agreement on less controversial issues first.

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  Diffusion temporarily leaves the conflict unresolved. Smoothing (downplaying differences and emphasizing common interests) and compromise (requiring each party to make concessions) are diffusion approaches to conflict management. The disadvantage is that the underlying problems remain unresolved while the less controversial issues are being addressed first.

• Question 198:

  According to research on the international contingency model of leadership, which path- goal leadership style is most likely to be accepted around the world as culturally appropriate?

  A. Directive.
  B. Participative.
  C. Supportive.
  D. Achievement-oriented.
  B. Participative.

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  A participative style entails consultation with employees and serious attention to their ideas. The participative style, although not always the best, is the most widely accepted internationally. Every country surveyed found it to be culturally acceptable.

• Question 199:

  What operations strategy is most likely to be adopted when the product sold by an organization is a commodity and the market is very large?

  A. Flexibility strategy.
  B. Quality strategy.
  C. Service strategy.
  D. Cost strategy.
  D. Cost strategy.

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  An operations strategy formulates a long-term plan for using enterprise resources to reach strategic objectives. A cost strategy is successful when the enterprise is the low-cost producer. However, the product (e.g., a commodity) tends to be undifferentiated in these cases, the market is often very large, and the competition tends to be intense because of the possibility of high-volume sales.

• Question 200:

  A company's decisions are made solely by one person, who is the CEO and major shareholder. Which of the following powers is this person least likely to relate to the other individuals to whom the person has delegated some authority?

  A. Coercive power.
  B. Legitimate power.
  C. Referent power.
  D. Reward power.
  C. Referent power.

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  A person who is the head of a company may exert influence through five types of power. Referent power is the capacity for the individual's personality and style to cause others to identify with or like him or her. Thus, it is the one type of power not necessarily held by a CEO and major shareholder. This person has the ability to reward others and apply pressure. (S)he also has the right to expect cooperation.