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Download DemoVendor: IIA
Certifications: Certified Internal
Exam Code: IIA-CIA-PART3
Exam Name: Certified Internal Auditor - Part 3 study guide with online review
Updated: Sep 30, 2024
Q&As: 931
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VCE
Which of the following is the most significant reason that domestic governments and international organizations seek to eliminate cartels?
A. The increased sales price reduces the amount of corporate tax revenues payable to the government.
B. True competition keeps prices as low as possible, thus increasing efficiency in the marketplace.
C. Small businesses cannot survive or grow without government protection.
D. The economic stability of developing countries depends on a global free market.
Correct Answer: B
A cartel is an organization of sellers (e.g., the oil cartel OPEC) who undertake joint action to maximize members' profits by controlling the supply, and therefore the price, of their product. Under the laws of many nations, such collusive conduct is illegal when engaged in by firms subject to those laws. The reason is that, as a result of the monopolistic and anticompetitive practices of cartels, supply is lower, prices are high, competition is restrained, and the relevant industry is less efficient. Accordingly, governmental and international organizations seek to protect consumers and the health of the domestic and global economy through anti-cartel efforts.
A firm in a declining industry ordinarily adopts one of four strategies. A firm that follows a:
A. Quick divestment strategy should have divested during the maturity phase.
B. Leadership strategy may assume that success will enable the firm to subsequently pursue a harvest strategy.
C. Harvest strategy seeks a pocket of stable demand.
D. Niche strategy is engaged in a gradual liquidation.
Correct Answer: B
A leadership strategy is pursued by a firm that believes it can achieve market share gains to become the dominant firm. An assumption is that additional investment can be recovered. A second assumption is that success will put the firm in a better position to hold its ground or subsequently to follow a harvest strategy. This strategy may entail aggressive pricing, marketing, or other investments that raise the stakes for competitors; reducing competitors' exit barriers by acquisitions of their capacity or products, assuming their contracts, and producing spare parts and generic versions of goods for them; demonstrations of strength and resolve to remain in the industry; and publicizing accurate data about the reality of future decline so as to dispel competitors' uncertainty.
Routine tasks, which have few exceptions and problems that are easy to analyze, are conducive to:
A. Formalized structure, in which procedures manuals and job descriptions are common.
B. Decentralized decision making, in which decisions are pushed downward in the organization.
C. Organic structures that emphasize adaptability and flexibility to changing circumstances.
D. High degrees of job satisfaction on the part of the employees performing them.
Correct Answer: A
Technology has been viewed in terms of two dimensions:task variability and problem analyzability, or the exceptions encountered in work and the search procedures for responding to the exceptions, respectively. Routine tasks have few exceptions, and the search for solutions is well defined. Because routine tasks change little overtime, they are well suited to a mechanistic structure. One characteristic of such a structure is high formalization.
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