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Certified Internal Auditor Exam Questions 526–530 (page: 107)

Updated On: 9-Feb-2026

The US dollar amount of the costs of quality classified as preventive costs for the manufacturing firm would be

  1. US $643, 000
  2. US $701, 000
  3. US $736, 000
  4. US $768, 000

Answer(s): B

Explanation:

Prevention attempts to avoid defective output, e.g., by employee training, reviews of equipment design, preventive maintenance, and evaluation of suppliers. Accordingly, the preventive costs equal U $701, 000 U $275, 000 design revie.ofs + U $180, 000 process engineering + U $90, 000 scheduled maintenance + U $1, 000 training).



Which of the following is a key to successful total quality management?

  1. Training quality inspectors.
  2. Focusing intensely on the customer.
  3. Creating appropriate hierarchies to increase efficiency.
  4. Establishing a well-defined quality standard, then focusing on meeting it.

Answer(s): B

Explanation:

TOM emphasizes satisfaction of customers, both internal and external. TOM considers the supplier's relationship with the customer, identifies customer needs, and recognizes that everyone in a process is at some time a customer or supplier of someone else, either inside or outside of the organization. Thus, TOM begins with external customer requirements, identifies internal customer-supplier relationships and requirements, and establishes requirements for external suppliers.



One of the main reasons total quality management TOM) can be used as a strategic weapon is that

  1. The cumulative improvement from a company's 'QM efforts cannot readily be copied by competitors.
  2. Introducing new products can lure customers away from competitors.
  3. Reduced costs associated with better quality can support higher shareholder dividends.
  4. TQM provides a comprehensive planning process for a business.

Answer(s): A

Explanation:

TON is a comprehensive approach to quality. It treats the pursuit of quality as a basic organizational function that is as important as production or marketing. Because 'QM affects every, aspect of the organization's activities, it permeates the organizational culture. Thus, the cumulative effect of TQM's continuous improvement process can attract and hold customers and cannot be duplicated by competitors.



Quality control circles are now used all over the world. The circles typically consist of a group of five to ten employees who meet regularly. The primary goal of these circles is

  1. To improve the quality of leadership in the organization.
  2. To tap the creative problem-solving potential of every employee.
  3. To improve communications between employees and managers by providing a formal communication channel.
  4. To allow for the emergence of team leaders who can be targeted for further leadership development.

Answer(s): B

Explanation:

Quality control circles are used to obtain voluntary input from employees to promote problem solving. Potential benefits include lower costs, better employer-employee relations, and greater employee commitment.



Which of the following observations concerning quality control is most accurate?

  1. Process quality control is used when examining the quality of goads or services that already exist.
  2. Process quality control is used to prevent defects, and product quality control is used primarily to identify defects after the fact.
  3. Product quality control is designed to balance the marketability of higher quality against the cast of attaining higher quality.
  4. Product quality control is more important than process quality control.

Answer(s): B

Explanation:

Process quality is the effectiveness and efficiency of the organization's internal operations. Product quality is the conformance of the organization's output with customer expectations.



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