IIA-CIA-Part3 Exam Brain Dumps - Study Notes and Theory [Jan-2022]
100% Guaranteed Results IIA-CIA-Part3 Unlimited 413 Questions
NEW QUESTION 189
The greatest advantage of functional departmentalization is that it:
- A. Helps to focus on the achievement of organizational goals.
- B. Facilitates communication between primary functions.
- C. Provides for efficient use of specialized knowledge .
- D. Accommodates geographically dispersed companies
Answer: C
NEW QUESTION 190
The economic order quantity for inventory is higher for an organization that has:
- A. Higher annual carrying costs as a percentage of inventory value.
- B. Higher fixed inventory ordering costs.
- C. A higher purchase price per unit of inventory.
- D. Lower annual unit sales.
Answer: B
NEW QUESTION 191
The current generation of ERP software ERP II) has added such front-office functions as:
- A. Purchasing.
- B. Customer service.
- C. Human resources.
- D. Inventory control.
Answer: B
Explanation:
The current generation of ERP software EPP II) has added front-office functions.
Customer relationship management applications in ERP II extend to customer service, finance-related matters, sales, and database creation and maintenance. Integrated data are helpful in better understanding customer needs, such as product preference or location of retail outlets. Thus, the organization may be able to optimize its sales forecasts, product line, and inventory levels.
NEW QUESTION 192
As organizations become more computer integrated, management is becoming increasingly concerned with the quality of access controls to the computer system. Which of the following provides the most accountability?
- A. Option I.
- B. Option II.
- C. Option III.
- D. Option IV.
Answer: A
Explanation:
Access should be limited to those whose activities necessitate access to the computer
system. Moreover, the degree of access allowed should be consistent with an individual's responsibilities. Restricting access to particular individuals rather than groups or departments clearly establishes specific accountability. Not everyone in a group will need access or the same degree of access. Thus, passwords assigned to individuals should be required for identification of users by the system. Furthermore, data should be restricted at the field level, not the workstation level. It may be possible to limit access to a workstation, but most workstations are connects -d t. larger mainframe or network databases. Thus, the security at the workstation level only would be insufficient.
NEW QUESTION 193
Which of the following must be adjusted to index a progressive tax system to inflation?
- A. Tax brackets, tax deductions, and tax payments.
- B. Tax brackets, exemptions, and nominal tax receipts.
- C. Tax deductions, exemptions, and tax filings.
- D. Tax deductions, exemptions, and tax brackets.
Answer: D
NEW QUESTION 194
An audit manager has just returned from an executive training program and has suggested that the audit department develop a mathematical model to help identify factors that may be causing changes in the cost of production. According to the manager, the model should recognize that the company currently has three separate production cost) ': enters. Which of the following approaches would best provide the analysis suggested by the audit manager?
- A. Develop a multiple regression analysis of production costs, including such variables as raw material inventory costs, number of employees in the department, and overtime pay.
- B. Develop a linear regression analysis relating the cost of production to the cost of goods sold.
- C. Develop a classical variables sampling estimate of cost of production per department, with the sample stratified by the dollar value of each product produced.
- D. Develop a -gear ratio analysis of the cost of production compared to the cost of raw inventory across the three departments.
Answer: A
Explanation:
Regression analysis extends correlation to find an equation for the linear relationship among variables. The behavior of a dependent variable, such as cost of production, is explained in terms of one or more independent variables for example, raw material costs, employees, overtime). Thus, multiple regression analysis determines functional relationships among quantitative variables.
NEW QUESTION 195
A limitation of transfer prices based on actual cost is that they:
- A. Charge inefficiencies to the department that is transferring the goods.
- B. Must be adjusted by some markup.
- C. Lack clarity and administrative convenience.
- D. Can lead to suboptimal decisions for the company as a whole.
Answer: D
Explanation:
The optimal transfer price of a selling division should be set at a point that will have the most desirable economic effect on the firm as a whole while at the same time continuing to motivate the management of every division to perform efficiently. Setting the transfer price based on actual costs rather than standard costs would give the selling division little incentive to control costs.
NEW QUESTION 196
The effect of just-in-time production approaches:
- A. Decreases production facility flexibility.
- B. Reduces the dependency on suppliers.
- C. Increases the need for a dependable workforce.
- D. Reduces the cost of implementing strategies.
Answer: D
Explanation:
A just-in-time (JIT) inventory system can reduce the cost of production by lowering or eliminating inventory costs.
NEW QUESTION 197
Various tools are employed to control large scale projects. They include all of the following except:
- A. Statistical process control.
- B. PERT.
- C. CPM.
- D. Gantt charts.
Answer: A
Explanation:
Statistical process (quality) control is not used to control large scale projects. Statistical quality control is a method of determining whether the shipment or production run of units lies within acceptable limits. It is also used to determine whether production processes are out of control.
NEW QUESTION 198
Assuming a 360-day year and that CyberAge continues paying on the last day of the credit period, the entity's weighted-average annual interest rate for trade credit ignoring the effects of compounding) for these two vendors is:
- A. 30.2%
- B. 28.0%
- C. 25.2%
- D. 27.0%
Answer: C
Explanation:
If the entity pays Web [...Taster within 10 days, it will save US $500 $25,000 2%). Thus, the entity is effectively paying US $500 to retain US $24,500 $25,000 - $500) for 20 days 30 10). The annualized interest rate on this borrowing is 36.7346% [(US $500 + $24,500) x 360 days / 20 days)]. Similarly, the entity is, in effect, paying Softidee US $2,500 $50,000 5%) to hold US $47.500 $50,000 - $2,500) for 80 days 90 - 1 0). The annualized rate on this borrowing is 23.6842% [(US $2,501-1 - $47,500) 361 r days - 80 days)]. The average amount burrowed from Web Master is US $16,333 33 [$24,500 x 1 month x 20 days - 30 days)]. The average amount borrowed from web master is US $126,666.67 [$47,500 x 3 months x 80 days / 90 days)]. Thus, the weighted average of these two rates based on average borrowing is 25.2% [(US16,333,33 x 36.7346%) + ($126,666,67 x 23,6824%] / $16,333.33 + $126,666.67)]. This calculation however, understates the true cost of not taking the discount because it does not consider the effects of compound. CyberAge Outlet, a relatively new store, is a cafe that offers customers the opportunity to browse the Internet or play computer games at their tables while they drink coffee. The customer pays a fee based on the amount of time spent signed on to the computer. The store also sells books. tee-shirts, and computer accessories. CyberAge has been paying all of its bills on the last day of the payment period, thus forfeiting all supplier discounts. Shown below are data on CyberAge's two major vendors, including average monthly purchases and credit terms.
NEW QUESTION 199
An enterprise changes its method of accounting for depreciation during the current year because it believes that the result will be a more appropriate presentation in the financial statements. In its income statement for the year, how should the enterprise report the adjustment resulting from the change in accounting policy if all relevant amounts are practicably determinable?
- A. Included in the determination of profit or loss for the current period
- B. Disclosed as a separate type of depreciation expense, directly following depreciation expense for the current year
- C. Not disclosed in the financial statements
- D. Reported as an adjustment to beginning retained earnings for the first period presented
Answer: D
Explanation:
A change in accounting policy should be applied retrospectively unless it is impracticable to determine period-specific effects or the cumulative effect. Retrospective application means adjusting the opening balances of equity e.g. retained earnings) for the first period presented and restating other comparative amounts.
NEW QUESTION 200
For a finance lease, the gross investment, lease payments receivable, recorded by the lesser is equal to the:
- A. Lower of 90% of the present value of the minimum lease payments or the fair value of the leased asset.
- B. Minimum lease payments plus the unguaranteed residual value accruing to the lesser at the end of the lease term
- C. Difference between the present value of the minimum lease payments and the unearned finance income.
- D. Present value of the minimum lease payments minus the unguaranteed residual value accruing to the lesser at the end of the lease term.
Answer: B
Explanation:
For a finance lease, the lesser should record as the gross investment in the lease the amount of the minimum lease payments (payments plus either any bargain purchase option or any residual value guaranteed by the lessee, a party related to the lessee, or by a financially capable parry unrelated to the lesser or the lessee) plus any amounts of unguaranteed residual value. The net investment in the lease is equal to the gross investment minus unearned finance income.
NEW QUESTION 201
In an analysis of alternative credit-management policies, which of the following components will cause the net present value of receivables on credit sales to increase, if everything else remains constant?
- A. A higher cost per unit sold.
- B. A longer average collection period.
- C. A tougher collections policy that reduces the bad debt loss ratio.
- D. An increase in the cost of capital.
Answer: C
NEW QUESTION 202
The cost to enter a foreign market would be highest in which of the following methods of global expansion?
- A. Joint ventures.
- B. Exporting.
- C. Overseas production.
- D. Licensing.
Answer: C
NEW QUESTION 203
User acceptance testing is more important in an object-oriented development process than in a traditional environment because of the implications of the:
- A. Potential for continuous monitoring.
- B. Inheritance of properties in hierarchies.
- C. Absence of traditional design documents.
- D. Lack of a tracking system for changes.
Answer: B
Explanation:
In object-oriented development, all objects in a class inherit the properties of higher classes in the hierarchy. Thus, changes in one object may affect many other objects, and the extent and effects of errors significantly increase. Testing one object provides no assurance that the objects are properly coordinated. Accordingly, user acceptance testing to verify correct functioning of the whole system becomes more important.
NEW QUESTION 204
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