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IIA IIA-CIA-Part3 Exam Internal Audit Knowledge Elements
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www.CertifySchool.com Certification Preparation Material (PDF) Question: 1 The primary reason for adopting TOM was to achieve A. Greater customer satisfaction. B. Reduced delivery time. C. Reduced delivery charges. D. Greater employee participation.
Answer: A Explanation: TOM is an integrated system that anticipates, meets, and exceeds customers needs, wants, and expectations. The management and employees of a large household goods moving company decided to adopt total quality management TOM) and continuous improvement CI). The company believes that if it became nationally known as adhering to TOM and CI, one result would be an increase in the company's profits and market share.
Question: 2 What should the company focus on to achieve quality more economically? A. Appraisal costs. B. Prevention costs. C. Internal failure costs. D. External failure costs.
Answer: B Explanation: Prevention attempts to avoid defective output. Prevention costs include preventive maintenance, employee training, review of equipment design, and evaluation of suppliers. Prevention is less costly than detection and correction of defective output.
Question: 3 A traditional quality control process in manufacturing consists of mass inspection of goods only at the end of a production process. A major deficiency of the traditional control process is that A. It is expensive to do the inspections at the end of the process. B. It is not possible to rework defective items. C. It is not 100% effective. D. It does not focus on improving the entire production process.
Answer: D Explanation:
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www.CertifySchool.com Certification Preparation Material (PDF) The process used to produce the goods is not thoroughly reviewed and evaluated for efficiency and effectiveness. Preventing defects and increasing efficiency by improving the production process raises quality standards and decreases costs.
Question: 4 Under a total quality management TOM) approach, A. Measurement occurs throughout the process, and errors are caught and corrected at the source. B. Quality control is performed by highly trained inspectors at the end of the production process. C. Upper management assumes the primary responsibility for the quality of the products and services. D. A large number of suppliers are used in order to obtain the lowest possible prices.
Answer: A Explanation: Total quality management emphasizes quality as a basic organizational function. TOM is the continuous pursuit of quality in every aspect of organizational activities. One of the basic tenets of TOM is doing it right the first time. Thus, errors should be caught and corrected at the source.
Question: 5 Which of the following is a characteristic of total quality management TQM)? A. Management by objectives. B. Qn-the-job training by other workers. C. Quality by final inspection. D. Education and self-improvement.
Answer: D Explanation: According to management theorist VV. Edwards Deming's well-known 14 points. education and self-improvement are essential. Knowledge is opportunity. Hence. continuous improvement should be everyone's primary career objective.
Question: 6 In which of the following organizational structures does total quality management TOM) work best? A. Hierarchal. B. Teams of people from the same specialty. C. Teams of people from different specialties. D. Specialists working individually.
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www.CertifySchool.com Certification Preparation Material (PDF) Answer: C Explanation: TOM advocates replacement of the traditional hierarchal structure with teams of people from different specialties. This change follows from TQM's emphasis on empowering employees and teamwork. Employees should have proper training, necessary information, and the best tools; be fully engaged in the decision process; and receive fair compensation. If such empowered employees are assembled in teams of individuals with the required skills, TOM theorists believe they will be more effective than people performing their tasks separately in a rigid structure.
Question: 7 The most important component of quality control is A. Ensuring goods and services conform to the design specifications. B. Satisfying upper management. C. Conforming with ISO-9000 specifications. D. Determining the appropriate timing of inspections.
Answer: A Explanation: The intent of quality control is to ensure that goods and services conform to the design specifications. Whether the focus is on feedforward, feedback, or concurrent control, the emphasis is on ensuring product or service conformity.
Question: 8 The cost of scrap, rework, and tooling changes in a product quality cost system is categorized as a n) A. Training cost. B. External failure cost. C. Internal failure cost. D. Prevention cost.
Answer: C Explanation: Internal failure costs are incurred when detection of defective products occurs before shipment. Examples of internal failure costs are scrap, rework, tooling changes, and downtime.
Question: 9 The four categories of costs associated with product quality costs are A. External failure, internal failure, prevention, and carrying. B. External failure, internal failure, prevention, and appraisal.
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www.CertifySchool.com Certification Preparation Material (PDF) C. External failure, internal failure, training, and appraisal. D. Warranty, product liability, training, and appraisal.
Answer: B Explanation: The following are the four categories of quality costs: prevention, appraisal, internal failure, and external failure lost opportunity). Costs of prevention include attempts to avoid defective output, including employee training, review of equipment design, preventive maintenance, and evaluation of suppliers. Appraisal costs include quality control programs, inspection, and testing. Internal failure costs are incurred when detection of defective products occurs before shipment, including scrap, rework, tooling changes, and downtime. External failure costs are incurred after the product has been shipped, including the costs associated with warranties, product liability, and customer ill will.
Question: 10 The cost of statistical quality control in a product quality cost system is categorized as a n) A. Internal failure cost. B. Training cost. C. External failure cost. D. Appraisal cost.
Answer: D Explanation: The following are the four categories of quality costs: prevention, appraisal, internal failure, and external failure lost opportunity). Appraisal costs include quality control programs, inspection, and testing. However, some authorities regard statistical quality and process control as preventive activities because they not only detect faulty work but also allow for adjustment of processes to avoid future defects.
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