Updated Free IIA IIA-CIA-Part3 Test Engine Questions with 413 Q&As
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IIA IIA-CIA-Part3 Exam Syllabus Topics:
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NEW QUESTION 104
Which of the following stages of group development is associated with accepting team responsibilities?
- A. Forming stage.
- B. Norming stage.
- C. Storming stage.
- D. Performing stage.
Answer: B
NEW QUESTION 105
All of the following are objectives of pricing except:
- A. Profit maximization.
- B. Production maximization.
- C. Image-oriented objectives.
- D. Stabilization.
Answer: B
Explanation:
Pricing objectives may include maximization of profit and market share, price stabilization, and image enhancement. However, production maximization is not a pricing objective. It is more likely to be directed toward achieving economies of scale and resulting unit-cost reductions.
NEW QUESTION 106
Quality cost indices are often used to measure and analyze the cost of maintaining or improving the level of quality. Such indices are computed by dividing the total cost of quality over a given period by some measure of activity during that period (for example, sales dollars). The following cost data are available for a company for the month of March. The company's quality cost index is calculated using total cost of quality divided by sales dollars.
The quality cost index for March is:
- A. 7.5
- B. 6.5
- C. 5.9
- D. 22.0
Answer: A
Explanation:
The total cost of quality equals the sum of prevention costs (quality planning), appraisal costs (inspection and testing), internal failure costs (scrap and rework), and external failure costs (customer complaints and returns), or US $30,000 ($2,800 + $6,400 + $16,800 + $4,000). Thus, the quality cost index for March is 7.5 [(US $30,000 - US $400,000) x 100].
NEW QUESTION 107
To keep costs at a minimum and decrease the completion time by 1-1/2 days, Networks, Inc. should crash activity)
- A. AB and CE.
- B. AD and AB.
- C. DE.
- D. AD.
Answer: B
Explanation:
The critical longest) path is A-D-E, which has an expected time of 13 days 5.5 +7.5). However, to decrease the project's completion time by 1.5 days, paths A-B-C-E 4.5 + 1.0 +
6.5 = 12 days) and A-B-D-E 4.5 + .5 + 7.5 = 12.5 days) as well as A-D-E must also be shortened. Hence, A-D-E must be reduced by 1.5 days, A-B-C-E by .5 day, and A-B-D-E by
1.0 day. The only way to decrease A-D-E by 1.5 days is to crash activity. AD 5.5 expected time -4.0 crash time = 1.5 days). Crashing DE results in a 1.0-day saving 7.5 - 6.5) only.
Crashing AB is the efficient way to reduce both A-B-C-E and A-B-D-E by the desired amount of time because it i s hart of both paths. The incremental cost of crashing AB is U $1,000 US $4,000 crash cost - US $3,000 normal cost) to shorten the completion time by
1.0 day 4.5 - 3.5). The alternatives for decreasing both A-B-C-E and A-B-D-E are more costly.
NEW QUESTION 108
Which of the following risks is best addressed by encryption?
- A. Access risk
- B. Privacy risk
- C. Information integrity risk.
- D. Software risk
Answer: B
NEW QUESTION 109
An organization with global headquarters in the United States has subsidiaries in eight other nations. If the organization operates with an ethnocentric attitude, which of the following statements is true?
- A. People of local nationality are developed for the best positions within their own country
- B. There is a significant amount of collaboration between headquarters and subsidiaries.
- C. Standards used for evaluation and control are determined at local subsidiaries, not set by headquarters.
- D. Orders, commands and advice are sent to the subsidiaries from headquarters.
Answer: D
NEW QUESTION 110
Presented below is a cost-volume-profit chart for a firm. Various reference points are marked on the chart with letters.
The letters CEH on the chart represent the:
- A. Total expenses.
- B. Area of the chart where total sales exceed total expenses
- C. Total sales.
- D. Area of the chart where total expenses exceed total sales
Answer: B
Explanation:
A cost-volume-profit chart contains elements lines, points, axes) that identify variable cost, fixed cost, the breakeven point, total revenue, profit, and volume in units. When the total sales revenue line rises above the total expense line, a company will have positive net income.
NEW QUESTION 111
An internal audit manager is explaining to a newly hired staff auditor the various analytics techniques frequently used by the internal audit activity Which of the following statements is true regarding these analytics techniques?
- A. Process mining is a type of data analysts where the data subject is a process
- B. Data mining is a type of data analysis that focuses on finding statistical relationships in order to create profiles
- C. Process analysis is a type of data mining where the data subject is a designated area of a process
- D. Data mining involves examining small amounts of structured data in a systematic manner
Answer: B
NEW QUESTION 112
All else being equal, an entity with a higher dividend-payout ratio will have a <List A> debt-to-assets ratio and a <List B} current ratio.
- A. Option B
- B. Option D
- C. Option C
- D. Option A
Answer: A
Explanation:
An entity with a higher dividend-payout ratio is distributing more of its earnings as dividends to ordinary shareholders. It will have less cash and less total assets than a comparable entity with a lower payout ratio. The debt-to-assets ratio will be higher because total assets are lower, and the current ratio will be lower because cash is lower.
An entity's financial statements for the current year are presented below:
NEW QUESTION 113
Which of the following statements regarding program change management is not correct?
- A. The goal of the change management process is to sustain and improve organizational operations.
- B. All changes should be tested in a non-production environment before migrating to the production environment.
- C. The degree of risk associated with a proposed change determines if the change request requires authorization.
- D. In order to protect the production environment, changes must be managed in a repeatable, defined, and predictable manner.
Answer: C
NEW QUESTION 114
An entity had the following account balances at December 31 of Year 1:
All shares outstanding were issued in a prior period for US $15 per share. On January 5 of Year 21000 shares were purchased for the treasury for US $17 per share. These treasury shares were sold on February 6 of Year 2, for US $18 per share. The effect of the purchase and sale of the 1.000 treasury shares was to:
- A. Not change equity.
- B. Increase equity by US $3.000.
- C. Increase equity by US $1.000.
- D. Increase equity by US $2,000.
Answer: C
Explanation:
Using the cost method, the journal entry to record the purchase of the treasury shares is.
NEW QUESTION 115
An automobile company that uses the futures market to set the price of steel to protect a profit against price increases is an example of:
- A. Selling future.-is to protect against price declines.
- B. A short hedge
- C. A long hedge
- D. Selling future.-is to protect the company from loss.
Answer: C
Explanation:
A change in prices can be minimized or avoided by hedging. Hedging is the process of using offsetting commitments to minimize or avoid the impact of adverse price movements. The automobile company desires to stabilize the price of steel so that its cost to the company will not rise and cut into profits. Accordingly, the automobile company uses the futures market to create a long hedge, which is a futures contract that is purchased to protect against price increases.
NEW QUESTION 116
A chief executive officer CEO) believes that a major competitor may be planning a new campaign. The CEO sends a questionnaire to key personnel asking for original thinking concerning what the new campaign may be. The CEO selects the best possibilities then sends another questionnaire asking for the most likely option. The process employed by the CEO is called the
- A. Maximum likelihood technique.
- B. Optimizing of expected payoffs.
- C. Least squares technique.
- D. Delphi technique.
Answer: D
Explanation:
The Delphi technique is a forecasting or decision-making approach that attempts to avoid groupthink the tendency of individuals to conform to what they perceive to be the consensus). The technique allows only written, anonymous communication among group members. Each member takes a position on the problem at hand. A summary of these positions is communicated to each member. The process is repeated for several iterations as the members more toward a consensus. Thus, the Delphi technique is a qualitative, not quantitative, technique. The College Honor Society sells hot pretzels at the home football games. The pretzels are sold for US $1.00 each, and the cost per pretzel is U $.30. Any unsold pretzels are discarded because they will be stale before the next home game. 95. The estimated demand for pretzel at the next home football game.
NEW QUESTION 117
Which of the following describes the result if an organization records merchandise as a purchase, but fails to include it in the closing inventory count?
- A. The cost of goods sold for the period will be overstated.
- B. The cost of goods sold for the period will be understated.
- C. The net income for the period will be understated.
- D. There will be no effect on the cost of goods sold or the net income for the period.
Answer: A
NEW QUESTION 118
The capital budgeting model that is generally considered the best model for long-range decision making is the:
- A. Unadjusted rate of return model.
- B. Accounting rate of return model.
- C. Discounted cash flow model.
- D. Payback model.
Answer: C
Explanation:
The capital budgeting methods that are generally considered the best for long-range decision making are the internal rate of return and net present value methods. These are both discounted cash flow methods.
NEW QUESTION 119
Which of the following is usually not a feature of cumulative preference shares?
- A. Has voting rights.
- B. Has the right to receive dividends in arrears before ordinary share dividends can be paid.
- C. Has priority over ordinary shares with regard to assets.
- D. Has priority over ordinary shares with regard to earnings.
Answer: A
Explanation:
Preference shares do not usually have voting rights. Preference shareholders are usually given the right to vote for directors only if the entity has not paid the preference dividend for a specified period of time, such as 10 quarters. Such a
provision is an incentive for management to pay preference dividends.
NEW QUESTION 120
A multinational organization has multiple divisions that sell their products internally to other divisions. When selling internally, which of the following transfer prices would lead to the best decisions for the organization?
- A. Full cost
- B. Full cost plus a markup.
- C. Variable cost plus a markup
- D. Market price of the product
Answer: D
NEW QUESTION 121
Based solely on the cost figures presented, the cost of developing the computer application will be:
- A. More than acquiring the purchased software package by US $3,550.
- B. More than acquiring the purchased software package by US $1,550.
- C. Less than acquiring the purchased software package by US $500.
- D. Less than acquiring the purchased software package by US $3,500.
Answer: D
Explanation:
Development cost equals the cost of the outside contractor plus the costs for hardware and supplies. Computer charges are transfer prices and do not require additional expenditures, given idle capacity. The relevant cost of supplies is US $300 $500 -$200 cost if the software are is purchased). The contractor's use of an otherwise idle office is not relevant. Thus, the relevant cost of development is US $25,500 [[1 .000 hours x $22 hourly cost of the contractor) * $3,200 hardware purchases * $300 incremental cost of supplies]. This amount is US $3,500 less than the US $29,000 cost of purchase. A systems analyst's work on the new software is not relevant. It is part of the regular workload.
Topic 6, Volume F
NEW QUESTION 122
If a lease agreement transfers substantially all of the risks and rewards of ownership to the lessee, the asset amount is recognized on the lessee's records as a(n) <List A} asset, and the lease is classified as a <List B} lease.
- A. Option D
- B. Option C
- C. Option B
- D. Option A
Answer: D
Explanation:
A lease agreement transfers the risks and rewards of ownership of the lessee it is treated as finance because the transaction is in essence an installment purchase. Accordingly, the lessee records a depreciable asset and a liability. Moreover, IAS 38. Intangible Assets, specifically does not apply to bases that are within the scope of IRS 17, Leases. A finance lease is therefore presented as an item of property, plant, and equipment, that is, as a tangible asset.
NEW QUESTION 123
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