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Free IIA IIA-CIA-Part3 Exam Questions (page: 3)

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Which of the following criteria would be most useful to a sales department manager in evaluating the performance of the manager's customer-service group?

  1. The customer is always right.
  2. Customer complaints should be processed promptly.
  3. Employees should maintain a positive attitude when dealing with customers.
  4. All customer inquiries should be answered within 7 days of receipt.

Answer(s): D

Explanation:

A criterion that requires all customer inquiries to be answered within 7 days of receipt permits accurate measurement of performance. The quantitative and specific nature of the appraisal using this standard avoids the vagueness, subjectivity, and personal bias that may afflict other forms of personnel evaluations.



An example of an internal nonfinancial benchmark is:

  1. The labor rate of comparably skilled employees at a major competitor's plant.
  2. The average actual cost per pound of a specific product at the company's most efficient plant.
  3. A US $50,000 limit on the cost of employee training programs at each of the company's plants.
  4. The percentage of customer orders delivered on time at the company's most efficient plant.

Answer(s): D

Explanation:

Benchmarking is a continuous evaluation of the practices of the best organizations in their class and the adaptation of processes to reflect the best of these practices. It requires analysis and measurement of key outputs against those of the best organizations. This procedure also involves identifying the underlying key actions and causes that contribute to the performance difference. The percentage of orders delivered on time at the company's most efficient plant is an example of an internal nonfinancial benchmark.



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 to:

  1. Improve the quality of leadership in the organization.
  2. Tap the creative problem-solving potential of every employee.
  3. Improve communications between employees and managers by providing a formal communication channel
  4. 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.



A company with many branch stores has decided to use its best-performing store as a benchmark organization for the purpose of analyzing the accuracy and reliability of branch store financial reporting.
Which one of the following is the most likely measure to be included in a financial benchmark?

  1. High turnover of employees.
  2. High level of employee participation in setting budgets.
  3. High amount of bad debt write-offs.
  4. High number of suppliers.

Answer(s): C

Explanation:

Internal benchmarking is the application of best practices in one part of the organization (e.g., a high-performing branch store) to its other parts (other branches). This process requires, among other things, use of quantitative and qualitative measures. A key indicator for financial performance measurement is the amount of bad debt write-offs. A high level of bad debt write-offs could indicate fraud, which would compromise the accuracy and reliability of financial reports. Bad debt write-offs may result from recording fictitious sales.



The management and employees of a large household goods moving company believe that it if became nationally known as adhering to total quality management and continuous improvement, one result would be an increase in the company's profits and market share.
What should the company focus onto achieve quality more economically?

  1. Appraisal costs.
  2. Prevention costs.
  3. Internal failure costs.
  4. External failure costs.

Answer(s): B

Explanation:

Prevention costs are incurred to prevent defects. Prevention is ordinarily less costly than the combined costs of appraisal, internal failure, and external failure.



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