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NEW QUESTION 133
Tools that should be in place to ensure data integrity include III:
I. Monitoring software
II. Change controls
III. Trend analysis
IV.
IV Automatic timeout
- A. I and III only.
- B. I, II, III, and IV.
- C. I, III, and IV only.
- D. II, III, and IV only.
Answer: B
Explanation:
The internal auditor should evaluate controls over data integrity. Tools that should be in place in order to ensure data integrity include intrusion management monitoring software, automatic timeout, and trend analysis), physical security for e-commerce servers, change controls, and reconciliation.
NEW QUESTION 134
An organization is developing a new online collaboration tool for employees. The tool includes a homepage that is customized to each employee according to his department and job function Which of the following engagements should be conducted to ensure that the organization has included all departments and job functions in the system before it is implemented?
- A. A source code review
- B. A design review
- C. An application control review
- D. An access control review
Answer: B
NEW QUESTION 135
Unsecured loans are loans:
- A. That do not have to be repaid for over one year.
- B. That appear to be too risky for most lenders to consider.
- C. Backed by mortgaged assets.
- D. Granted on the basis of a company's credit standing.
Answer: D
NEW QUESTION 136
An objective of financial reporting is
- A. Evaluating management results compared with standards.
- B. Providing information on compliance with established procedures.
- C. Providing information useful to investors, creditors, donors, and other users for decision making.
- D. Assessing the adequacy of internal control.
Answer: C
Explanation:
The objectives of financial reporting are concerned with the underlying goals and purposes of accounting. They are to provide information that1) is useful to those making investment and credit decisions, assuming that those individuals have a reasonable understanding of business and economic activities:2) is helpful to current and potential investors and creditors and other users in assessing the amount timing, and uncertainty of future cash flows; and3) discloses economic resources claims to those resources, and the changes therein.
NEW QUESTION 137
The average labor cost per unit for the first batch produced by a new process is US $120. The cumulative average labor cost after the second batch is US $72 per product. Using a batch size of 100 and assuming the learning curve continues, the total labor cost of four batches will be:
- A. US$10,368
- B. US$17,280
- C. US$2,592
- D. US$4,320
Answer: B
Explanation:
The learning curve reflects the increased rate at which people perform tasks as they gain experience. The time required to perform a given task becomes progressively shorter. Ordinarily, the curve is expressed in a percentage of reduced time to complete a task for each doubling of cumulative production. One common assumption in a learning curve model is that the cumulative average time (and labor cost) per unit is reduced by a certain percentage each time production doubles. Given a US $120 cost per unit for the first 100 units and a US $72 cost per unit when cumulative production doubled to 200 units, the learning curve percentage must be 60% (US $72 + $120). If production is again doubled to 400 units (four batches), the average unit labor cost should be US $43.20 ($72 x 60%). Hence, total labor cost for 400 units is estimated to be US $17,280 (400 units x $43.20).
NEW QUESTION 138
The gross domestic product GDP) will fall following an increase in:
- A. Imports.
- B. Consumption expenditures.
- C. Exports.
- D. Inflation.
Answer: A
Explanation:
By definition, GDP determined using the expenditures approach equals the sum of consumption, investment, government purchases of goods and services, and net exports imports). Thus, a rise in imports will cause a fall in net exports and GDP.
NEW QUESTION 139
If the average age of inventory is 60 days, the average age of the accounts payable is 30 days, and the average age of accounts receivable is 45 days, the number of days in the cash flow cycle is:
- A. 135 days.
- B. 90 days.
- C. 105 days.
- D. 75 days.
Answer: D
Explanation:
The cash flow cycle begins when the entity pays for merchandise it has purchased and ends when the entity receives cash from the sale of the merchandise. Inventory is held for an average of 60 days prior to sale, but the average age of accounts payable is 30 days.
Consequently, the average time between outlay and sale is 30 days. Receivables are collected an average of 45 days after sale, so the length of the cash flow cycle is 75 days (30 + 45).
NEW QUESTION 140
The first stage in the development of a crisis management program is to:
- A. Formulate contingency plans.
- B. Conduct a risk analysis.
- C. Create a crisis management team.
- D. Practice the response to a crisis.
Answer: B
NEW QUESTION 141
What technique could be used to prevent the input of alphabetic characters into an all numeric identification number?
- A. A format check.
- B. A record count
- C. A check digit.
- D. A sequence check.
Answer: A
Explanation:
With a format check, the computer checks the characteristics of the character content length, or sign of the individual data fields. Field checks, sign checks, and range checks are examples of format checks.
NEW QUESTION 142
Which of the following statements is true regarding the risks associated with the increased use of smart devices at work?
- A. When the user fads to perform jailbreaking or rooting, data security and privacy risks we increased
- B. The Bluetooth and WI-FI features of smart devices enhance the security of data while in transit
- C. Due to their small size and portability smart devices and their associated data are typically less susceptible to physical loss
- D. The global positioning system (GPS) capability of smart devices could be exploited to plan cyberattacks
Answer: D
NEW QUESTION 143
Which of the following methods, if used in conjunction with electronic data interchange (EDI), will improve the organization's cash management program, reduce transaction data input time and errors, and allow the organization to negotiate discounts with EDI vendors based on prompt payment?
- A. Biometrics.
- B. Knowledge-based systems.
- C. Electronic funds transfer.
- D. Standardized graphical user interface.
Answer: C
NEW QUESTION 144
Which of the following cybersecurity-related activities is most likely to be performed by the second line of defense?
- A. implement vulnerability management with internal and external scans.
- B. Deploy intrusion detection systems and conduct penetration testing
- C. Monitor incidents, key risk indicators, and remediation
- D. Administer security procedures, training, and testing.
Answer: D
NEW QUESTION 145
Companies now can use electronic transfers to conduct regular business transactions.
Which of the following terms best describes a system in which an agreement is made between two or more parties to electronically transfer purchase orders, sales orders, invoices, and/or other financial documents?
- A. Electronic mail email
- B. Electronic data interchange EDI
- C. Electronic data processing EDP
- D. Electronic funds transfer EFT
Answer: B
Explanation:
Electronic data interchange is the electronic transfer of documents between businesses. EDI was developed to enhance just-in-time JIT) inventory management. Advantages include speed, reduction of clerical errors, and elimination of repetitive clerical tasks and their costs. A multinational company has an agreement with a value-added network VAN) that provides the encoding and communications transfer for the company's electronic data interchange EDI) and electronic funds transfer EFT) transactions. Before transfer of data to the VAN, the company performs online preprocessing of the transactions. The internal auditor is responsible for assessing preprocessing controls. In addition, the agreement between the company and the VAN states that the internal auditor is allowed to examine and report on the controls in place at the VAN on an annual basis. The contract specifies that access to the VAN can occur on a surprise basis during the second or third quarter of the company's fiscal year. This period was chosen so it would not interfere with processing during the VAN's peak transaction periods. This provision was not reviewed with internal auditing. The annual audit plan approved by the board of directors specifies that a full audit would be done during the current year.
NEW QUESTION 146
The management of working capital is most crucial for which of the following aspects of business?
- A. Solvency
- B. Liquidity
- C. Profitability
- D. Efficiency
Answer: B
NEW QUESTION 147
In an inventory system on a database management system DBMS), one stored record contains part number, part name, part color, and part weight. These individual items are called:
- A. Occurrences.
- B. Bytes.
- C. Stored files.
- D. Fields.
Answer: D
Explanation:
A record is a collection of related data items fields). A field data item) is a group of characters representing one unit of information.
NEW QUESTION 148
A characteristic of the payback method before taxes) is that it:
- A. Uses the estimated expected life of the asset in the denominator of the calculation.
- B. Neglects total project profitability.
- C. Incorporates the time value of money.
- D. Uses accrual accounting inflows in the numerator of the calculation.
Answer: B
Explanation:
The, payback method calculates the number of years required to complete the return of the original investment. This measure is computed by dividing the net investment required by the average expected cash flow to he generated, resulting in the number of years required to recover the original investment. Payback is easy to calculate but has two principal problems: it ignores the time value of money, and it gives no consider t, -,n to returns after the payback period. Thus, it ignores total project profitability.
NEW QUESTION 149
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