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NO.1 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?
A. High level of employee participation in setting budgets.
B. High amount of bad debt write-offs.
C. High turnover of employees.
D. High number of suppliers.
Answer: B
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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.
NO.2 Which statement best describes total quality management (TQM)?
A. TQM emphasizes doing each job right the first time.
B. TQM emphasizes reducing the cost of inspection.
C. TQM emphasizes better statistical quality control techniques.
D. TQM emphasizes encouraging cross-functional teamwork.
Answer: A
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Explanation:
TQM establishes quality as an organizational objective and views it as a major component of the
organization's service to its customers. It emphasizes employee training and commitment,
productservice design and production, and customer service. Ordinarily, the quality of a product or
service is as important to customers as cost and timeliness. Superior product quality is not merely
the result of more inspection, better statistical quality control, and cross-functional teamwork.
Manufactures must make fundamental changes in the way they produce products and do each job
right the first time.
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Exam Code: IIA-CIA-Part3Exam Name: Certified Internal Auditor - Part 3, Business Analysis and Information Technology
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Exam Code: IIA-CIA-Part1Exam Name: Certified Internal Auditor - Part 1, The Internal Audit Activity's Role in Governance, Risk, and Control
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