DON'T WANT TO MISS A THING?

Certification Exam Passing Tips

Latest exam news and discount info

Curated and up-to-date by our experts

Yes, send me the newsletter

CIA Part 3 Question Bank PDF, Certified Internal Auditor Exam Answers | SPOTO

The CIA Part 3 exam, also known as the Internal Audit Knowledge Elements exam, is a critical step in obtaining the Certified Internal Auditor (CIA) designation. This exam tests your ability to apply internal audit knowledge in real-world scenarios, covering topics such as risk management, governance, and internal control systems. Our CIA Part 3 Question Bank PDF provides an extensive collection of practice questions and detailed exam answers, helping you prepare effectively. With comprehensive coverage of key topics and realistic exam-style questions, this resource is designed to improve your understanding and exam performance. Whether you're reviewing concepts or testing your readiness, our CIA Part 3 study guide will help ensure you're fully prepared for success on exam day.
Take other online exams
Question #1
The practice of maintaining a test program library separate from the production program library is an example of:
A. n organizational control
B. hysical security
C. n input control
D. concurrency control
View answer
Correct Answer: A

View The Updated CIA Part 3 Exam Questions

SPOTO Provides 100% Real CIA Part 3 Exam Questions for You to Pass Your CIA Part 3 Exam!

Get CIA Part 3 Practice Test
Question #2
Which of the following price adjustment strategies is designed to smooth production for the selling firm?
A. ash discounts
B. uantity discounts
C. unctional discounts
D. easonal discounts
View answer
Correct Answer: D
Question #3
The network below describes the interrelationships of several activities necessary to complete a project. The arrows represent the activities. The numbers between the arrows indicate the number of months to complete each activity. The shortest time to complete the project is:
A. months
B. months
C. months
D. 4 months
View answer
Correct Answer: C
Question #4
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. S$4,320
B. S$10,368
C. S$2,592
D. S$17,280
View answer
Correct Answer: D
Question #5
Which one of the following items is not directly reflected in the basic economic order quantity EOQ) model?
A. nterest on invested capital
B. nventory obsolescence
C. ublic warehouse rental charges
D. uantity discounts lost on inventory purchases
View answer
Correct Answer: D
Question #6
In most countries taxes tend to be with respect to income
A. ption A
B. ption B
C. ption C
D. ption D
View answer
Correct Answer: B
Question #7
Under the balanced scorecard concept, employee satisfaction and retention are measures used under which of the following perspectives?
A. ustomer
B. nternal business
C. earning and growth
D. inancial
View answer
Correct Answer: C
Question #8
What should the company focus on to achieve quality more economically?
A. ppraisal costs
B. revention costs
C. nternal failure costs
D. xternal failure costs
View answer
Correct Answer: B
Question #9
An entity sells 1,500 units of a particular item each year and orders the items in equal quantities of 500 units at a price of US $5 per unit. No safety stocks are held. If the entity has a cost of capital of 1 2%, its annual opportunity cost of carrying inventory is:
A. 5 $150
B. 5 $180
C. 5 $300
D. 5 $900
View answer
Correct Answer: A
Question #10
A manufacturer is considering using bar code identification for recording information on parts used by the manufacturer. A reason to use bar codes rather than other means of identification is to ensure that:
A. he movement of all parts is recorded
B. he movement of parts is easily and quickly recorded
C. endors use the same part numbers
D. endors use the same identification methods
View answer
Correct Answer: B
Question #11
Which of the following control frameworks was acknowledged by the U.S. Securities and Exchange Commission as an appropriate model for designing internal controls under the requirements of the Sarbanes-Oxley Act of 2002?
A. OSO
B. SAC
C. OBIT
D. TAG
View answer
Correct Answer: A
Question #12
One consequence of the imposition of tariffs or quotas on imported products is:
A. ower prices for domestic products that compete with affected imports
B. omestic industry opposition to protection from imports
C. dditional consumption of the affected imported products
D. igher prices for the affected imported products
View answer
Correct Answer: D
Question #13
Object technology has become important in companies' strategic use of information systems because of its potential to:
A. ermit quicker and more reliable development of systems
B. aintain programs written in procedural languages
C. inimize data integrity violations in hierarchical databases
D. treamline the traditional "waterfall" systems development methodology
View answer
Correct Answer: A
Question #14
A measure that describes the risk of an investment project relative to other investments in general is the:
A. oefficient of variation
B. eta coefficient
C. tandard deviation
D. xpected return
View answer
Correct Answer: B
Question #15
One of the main reasons total quality management (TQM) can be used as a strategic weapon is that:
A. he cumulative improvement from a company's TQM efforts cannot readily be copied by competitors
B. ntroducing new products can lure customers away from competitors
C. educed costs associated with better quality can support higher shareholder dividends
D. QM provides a comprehensive planning process for a business
View answer
Correct Answer: A
Question #16
A firm is attempting to estimate the reserves for doubtful accounts. The probabilities of these doubtful accounts follow a transition process over time. They evolve from their starting value to a changed value. As such, the most effective technique to analyze the problem is:
A. arkov chain analysis
B. conometric theory
C. onte Carlo analysis
D. ynamic programming
View answer
Correct Answer: A
Question #17
In calculating diluted earnings per share when an entity has convertible bonds outstanding, the weighted- average number of ordinary shares outstanding must be
A. ncreased Increased
B. ncreased Decreased
C. ecreased Increased
D. ecreased Decreased
View answer
Correct Answer: A
Question #18
The practice of maintaining a test program library separate from the production program library is an example of:
A. n organizational control
B. hysical security
C. n input control
D. concurrency control
View answer
Correct Answer: A
Question #19
A local area network LAN) is best described as a(n):
A. omputer system that connects computers of all sizes, workstations, terminals, and other devices within a limited proximity
B. ystem to allow computer users to meet and share ideas and information
C. lectronic library containing millions of items of data that can be reviewed, retrieved, and analyzed
D. ethod to offer specialized software, hardware, and data handling techniques that improve effectiveness and reduce costs
View answer
Correct Answer: A
Question #20
Assume that C Company offers to perform the operation 2 function on 1,000 units at a unit price of US $40, excluding direct materials cast. Also assume that Y Company offers to perform the Operation 1 function an 1,000 units at a unit price of US $7, excluding direct materials cost.Which of these mutually exclusive offers is acceptable?
A. but not Y
B. but not C
C. or Y
D. either offer should be accepted
View answer
Correct Answer: A
Question #21
A working capital technique that increases the payable float and therefore delays the outflow of cash is:
A. oncentration banking
B. draft
C. lectronic Data Interchange EDO
D. lockbox system
View answer
Correct Answer: B
Question #22
The emergence of electronic data interchange EDI) as standard operating practice increases the risk of:
A. nauthorized third-party access to systems
B. ystematic programming errors
C. nadequate knowledge bases
D. nsuccessful system use
View answer
Correct Answer: A
Question #23
A hospital is evaluating the purchase of software to integrate a new cost accounting system with its existing financial accounting system.Which of the following describes the most effective way for the internal audit activity to be involved in the procurement process?
A. he internal audit activity evaluates whether performance specifications are consistent with the hospital's needs
B. he internal audit activity evaluates whether the application design meets internal development and documentation standards
C. he internal audit activity determines whether the prototyped model is validated and reviewed with users before production use begins
D. he internal audit activity has no involvement since the system has already been developed externally
View answer
Correct Answer: A
Question #24
After using the report writer for several months, the marketing analysts gained confidence in using it but the marketing department manager became concerned.Whenever analysts revised reports they had written earlier, the coding errors kept reappearing in their command sequences. The manager was sure that all the analysts knew what the errors were and how to avoid them. The most likely cause of the reappearance of the same coding errors is inadequate:
A. ackups
B. hange control
C. ccess control
D. esting
View answer
Correct Answer: B
Question #25
Which statement beet describes the emphasis of total quality management TQM)?
A. educing the cast of inspection
B. mplementing better statistical quality control techniques
C. oing each job right the first time
D. ncouraging crass-functional teamwork
View answer
Correct Answer: C
Question #26
Which of the following project scheduling techniques is commonly used in total quality management for simplifying work processes?
A. antt charts
B. lowcharting
C. rogram evaluation and review technique
D. ritical path method
View answer
Correct Answer: B
Question #27
What is the number of production runs per year of computer chairs that would minimize the sum of carrying and setup costs for the coming year?
A.
B.
C.
D.
View answer
Correct Answer: D
Question #28
If a corporation's disaster recovery plan requires fast recovery with little or no downtime, which of the following backup sites should it choose?
A. ot site
B. arm site
C. old site
D. uick site
View answer
Correct Answer: A
Question #29
If, in addition to the estimated profits, management of the bank assesses the probabilities of high, medium, and low demands to be 0.3, 0.4, and 0.3 respectively, what is the expected opportunity loss from selecting location of L4?
A.
B.
C.
D.
View answer
Correct Answer: A
Question #30
Which of the following would be of greatest concern to an auditor reviewing a policy regarding the sale of a company's used personal computers to outside parties?
A. hether deleted files on the hard disk drive have been completely erased
B. hether the computer has viruses
C. hether all software on the computer is properly licensed
D. hether there is terminal emulation software on the computer
View answer
Correct Answer: A
Question #31
The online data entry control called performatting is:
A. program initiated prior to regular input to discover errors in data before entry so that the errors can be corrected
B. check to determine if all data items for a transaction have been entered by the person entering the data
C. aeries of requests for required input data that requires an acceptable response to each request before a subsequent request is made
D. he display of a document with blanks for data items to be entered by the person entering the data
View answer
Correct Answer: D
Question #32
A post office serves customers in a single line at one service window. During peals periods, the rate of arrivals has a Poisson distribution with an average of 100 customers per hour and service times that are exponentially distributed with an average of 0 seconds per customer.From this, one can conclude that the:
A. ueue will expand to infinity
B. erver' will be idle one-sixth of the time
C. verage rate is 100 customers per hour
D. verage customer waiting time is minutes
View answer
Correct Answer: A
Question #33
The purpose of the economic order quantity model is to:
A. inimize the safety stock
B. inimize the sum of the order costs and the holding costs
C. inimize the inventory quantities
D. inimize the sum of the demand costs and the backlog costs
View answer
Correct Answer: B
Question #34
Because of the large number of factors that could affect the demand for its new product, interactions among these factors, and the probabilities associated with different values of these factors, the marketing department would like to develop a computerized model for projecting demand for this product. By using a random-number procedure to generate values for the different factors, it will be able to estimate the distribution of demand for this new product. This method of estimating the distribution of dema
A. onte Carlo simulation
B. inear programming
C. orrelation analysis
D. ifferential analysis
View answer
Correct Answer: A
Question #35
Both users and management approve the initial proposal, design specifications, conversion plan, and testing plan of an information system. This is an example of:
A. mplementation controls
B. ardware controls
C. omputer operations controls
D. ata security controls
View answer
Correct Answer: A
Question #36
The airlines have been leaders in the use of technology. Customers can make reservations either with an airline or through a travel agency. In this situation, a travel agency is classified as which type of distribution channel?
A. n intermediary
B. jobber
C. distributor
D. facilitating agent
View answer
Correct Answer: A
Question #37
To index a progressive tax system to inflation, the government must:
A. djust only tax deductions and exemptions
B. djust only tax brackets
C. djust deductions, exemptions, and tax brackets
D. nsure that nominal tax receipts grow more slowly than inflation
View answer
Correct Answer: C
Question #38
A competitive marketing strategy in which a firm specializes in serving customers overlooked or ignored by major competitors is called a:
A. arket leader strategy
B. arket challenger strategy
C. ' Market follower strategy
D. arket niche strategy
View answer
Correct Answer: D
Question #39
The economic value of an entity will rise following an increase in:
A. et cash flow
B. ystematic risk
C. nsystematic risk
D. he discount rate
View answer
Correct Answer: A
Question #40
An audit of the electronic data interchange EDI) area of a banking group revealed the facts listed below.Which one indicates the need for improved internal control?
A. mployees may only access the computer system via an ID and an encrypted password
B. he system employs message sequencing as a way to monitor data transmissions
C. ertain types of transactions may only be made at specific terminals
D. ranch office employees may access the mainframe with a single call via modem
View answer
Correct Answer: D
Question #41
An auditor has just completed a physical security audit of a data center. Because the center engages in top- secret defense contract work, the auditor has chosen to recommend biometric authentication for workers entering the building. The recommendation might include devices that verify all of the following except:
A. ingerprints
B. etina patterns
C. peech patterns
D. assword patterns
View answer
Correct Answer: D
Question #42
The feasible solution region is bounded by the lines connecting points:
A. , 4, 6, and 7
B. , 5, 6, and 8
C. , 4, , , and 8
D. , E
View answer
Correct Answer: A
Question #43
An internal auditor is evaluating project management reviews of individual initiatives and development projects and system development life cycle reviews.When performing this service, the internal auditor is addressing which key e-commerce audit area?
A. orruption of data
B. -commerce organization
C. anagement issued
D. usiness interruptions
View answer
Correct Answer: C
Question #44
The details of the audit program used to audit e-commerce activities in specific organizations will vary depending on all but which of the following factors?
A. ndustry
B. rganizational culture
C. ountry
D. egal and business models
View answer
Correct Answer: B
Question #45
When a specified level of safety stock is carried for an item in inventory, the average inventory level for that item:
A. ecreases by the amount of the safety stock
B. s one-half the level of the safety stock
C. ncreases by one-half the amount of the safety stock
D. ncreases by the amount of the safety stock
View answer
Correct Answer: D
Question #46
What is RST's current ratio at the end of Year 6?
A.
B.
C.
D.
View answer
Correct Answer: A
Question #47
Which of the following is true about the impact of price inflation on financial ratio analysis?
A. nflation impacts only those ratios computed from balance sheet accounts
B. nflation impacts financial ratio analysis for one entity over time, but not comparative analysis of entities of different ages
C. nflation impacts financial ratio analysis for one entity overtime, as well as comparative analysis of entities of different ages
D. nflation impacts comparative analysis of entities of different ages, but not financial ratio analysis for one entity over time
View answer
Correct Answer: C
Question #48
While auditing a marketing department, the internal auditor discovered that the product life cycle model was used to structure the marketing mix. Under such a philosophy, the opportunity for cost reductions would be greatest in which stage of the life cycle?
A. ntroduction stage
B. rowth stage
C. aturity stage
D. ecline stage
View answer
Correct Answer: B
Question #49
The term "short-selling" is the:
A. elling of a security that was purchased by borrowing money from a broker
B. elling of a security that is not owned by the seller
C. elling of all the shares you own in an entity in anticipation that the price will decline dramatically
D. etting that a stock will increase by a certain amount within a given period of time
View answer
Correct Answer: B
Question #50
Regardless of whether a company develops, buys, leases, or pays for the use of the software for EDI transmissions, internal audit should be responsible for evaluating whether the software:
A. as developed in a controlled environment
B. s backed up adequately to permit recovery
C. as acquired with adequate review by legal counsel
D. eets business objectives
View answer
Correct Answer: D
Question #51
Authentication is the process by which the:
A. ystem verifies that the user is entitled to enter the transaction requested
B. ystem verifies the identity of the user
C. ser identifies him/herself to the system
D. ser indicates to the system that the transaction was processed correctly
View answer
Correct Answer: B
Question #52
An accounts payable program posted a payable to a vendor not included in the online vendor master file. A control that would prevent this error is a:
A. alidity check
B. ange check
C. easonableness test
D. arity check
View answer
Correct Answer: A
Question #53
In forecasting purchases of inventory for a firm, all of the following are useful except
A. nowledge of the behavior of business cycles
B. nternal allocations of costs to different segments of the firm
C. nformation on the seasonal variations in demand
D. conometric modeling
View answer
Correct Answer: B
Question #54
An entity average of inventory US $4,000 in sales per day and is paid on an average within 30 days of the sale. After they receive their invoke, 55% of the customers pay by check, while the remaining 45% pay by credit card. Approximately how much would the entity show in accounts receivable on its balance sheet on any given date?
A. S $4,000
B. S $120,000
C. S $48,000
D. S $54,000
View answer
Correct Answer: B
Question #55
An audit manager has just returned from an executive training program and has suggested that the audit department develop a mathematical model to help identify factors that may be causing changes in the cost of production. According to the manager, the model should recognize that the company currently has three separate production (cost) centers.Which of the following approaches would best provide the analysis suggested by the audit manager?
A. evelop a classical variables sampling estimate of cost of production per department, with the sample stratified by the dollar value of each product produced
B. evelop a 3-year ratio analysis of the cost of production compared to the cost of raw inventory across the three departments
C. evelop a multiple regression analysis of production costs, including such variables as raw material inventory costs, number of employees in the department, and overtime pay
D. evelop a linear regression analysis relating the cost of production to the cost of goods sold
View answer
Correct Answer: C
Question #56
Based on 365 days per year has days' sales outstanding to the nearest full day of:
A. days
B. days
C. days
D. days
View answer
Correct Answer: C
Question #57
Market-based pricing involves:
A. dding a standard markup to the cost of the product
B. etermining the price at which the product' will earn a target profit
C. asing prices on the product's perceived value
D. asing prices on competitors' prices
View answer
Correct Answer: C
Question #58
Performance appraisal systems might use any of three different approaches:1) who did the job,2) how the job was done, or3) what was accomplished.Which approach is used by a system that places the focus on how the job was done?
A. ehavior-oriented
B. oal-oriented
C. rait-oriented
D. mployee-oriented
View answer
Correct Answer: A
Question #59
The treasury analyst for a manufacturing entity has estimated the cash flows for the first half of next year (ignoring any short-term borrowings) as follows:The entity has a line of credit of up to US $4 million on which it pays interest monthly at a rate of 1% of the amount used. The entity is expected to have a cash balance of US $2 million on January 1, with no amount of its line of credit used. Assuming all cash flows occur at the end of the month approximately how much will the entity pay in interest d
A.
B. S $61,000
C. S $80,000
D. S $132,000
View answer
Correct Answer: B
Question #60
The operating condition that cannot be identified by using a queuing model is the:
A. verage percentage of time that a service facility is idle
B. robability of a specified number of units in the queue
C. ctual amount of time each unit spends in the queue
D. verage number of units in the system and the mean length of the queue
View answer
Correct Answer: C
Question #61
To reduce security exposure when transmitting proprietary data communication lines, a company should use:
A. synchronous modems
B. uthentication techniques
C. all-back procedures
D. ryptographic devices
View answer
Correct Answer: D
Question #62
A competitive marketing strategy in which a firm specializes in serving customers overlooked or ignored by major competitors is called a:
A. arket leader strategy
B. arket challenger strategy
C. ' Market follower strategy
D. arket niche strategy
View answer
Correct Answer: D
Question #63
The following data on variables x and y was collected from June to October.The correlation coefficient between variables x and y is nearest to:
A.
B. 1
C.
D.
View answer
Correct Answer: B
Question #64
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. lectronic mail email
B. lectronic funds transfer EFT
C. lectronic data interchange EDI
D. lectronic data processing EDP
View answer
Correct Answer: C
Question #65
Which of the following is not required by ISO 9000 standards?
A. stablishment of a quality management system
B. reation of an internal audit system
C. onsistent high quality products
D. nsite inspections by a registrar
View answer
Correct Answer: C
Question #66
The treasury analyst for a manufacturing entity has estimated the cash flows for the first half of next year (ignoring any short-term borrowings) as follows:The entity has a line of credit of up to US $4 million on which it pays interest monthly at a rate of 1% of the amount used. The entity is expected to have a cash balance of US $2 million on January 1, with no amount of its line of credit used. Assuming all cash flows occur at the end of the month approximately how much will the entity pay in interest d
A.
B. S $61,000
C. S $80,000
D. S $132,000
View answer
Correct Answer: B
Question #67
What language interface would a database administrator use to establish the structure of database tables?
A. ata definition language
B. ata control language
C. ata manipulation language
D. ata query language
View answer
Correct Answer: A
Question #68
If the probability of hot weather, given a hot weather forecast, is 50%, how much would the vendor be willing to pay for the forecast?
A. S $600
B. S $300
C. S $1,000
D. S $500
View answer
Correct Answer: B
Question #69
An entity had 300,000 shares of ordinary shares issued and outstanding at December 31. Year 1 No shares were issued during Year 2. On January 1, Year 2, the entity issued 200,000 shares of nonconvertible preference shares. During Year 2, the entity declared and paid US $75,000 of cash dividends on the ordinary shares and US $60,000 on the preference shares. Profit for the year ended December 31. Year 2 was US $330.000.What is the entity's Year 2 basic earnings per share?
A. 3 $1
B. S $0
C. S $0
D. S $0
View answer
Correct Answer: B
Question #70
Selling below cost in other countries is called:
A. redatory pricing
B. rice discrimination
C. umping
D. ollusive pricing
View answer
Correct Answer: C
Question #71
Which of the following is an example of internal auditors applying data mining techniques forexploratory purposes?
A. nternal auditors perform reconciliation procedures to support an external audit of financial reporting
B. nternal auditors perform a systems-focused analysis to review relevant controls
C. nternal auditors perform a risk assessment to identify potential audit subjects as input for the annual internal audit plan
D. nternal auditors test IT general controls with regard to operating effectiveness versus design
View answer
Correct Answer: B
Question #72
Performance appraisal systems might use any of three different approaches:1) who did the job,2) how the job was done, or3) what was accomplished.Which approach is used by a system that places the focus on how the job was done?
A. ehavior-oriented
B. oal-oriented
C. rait-oriented
D. mployee-oriented
View answer
Correct Answer: A
Question #73
An insurance firm that follows the systems development life cycle concept for all major information system projects is preparing to star[ a feasibility study for a proposed underwriting system. Some of the primary factors the feasibility study should include are:
A. ossible vendors for the system and their reputation for quality
B. xposure to computer viruses and other intrusions
C. ethods of implementation, such as parallel or cut-over
D. echnology and related costs
View answer
Correct Answer: D
Question #74
Much of the internal auditor's work involves accumulation of engagement information. A duplicate of a contract rather than the original is an example of what kind of evidence?
A. econdary
B. ircumstantial
C. earsay
D. pinion
View answer
Correct Answer: A
Question #75
Which of the following is the most appropriate activity for an internal auditor to perform during a review of systems development activity?
A. erve on the IT steering committee that determines what new systems are to be developed
B. eview the methodology used to monitor and control the system development function
C. ecommend specific automated procedures to be incorporated into new systems that will provide reasonable assurance that all data submitted to an application are converted to machine- readable form
D. ecommended specific operational procedures that will ensure that all data submitted for processing are converted to machine-readable form
View answer
Correct Answer: B
Question #76
The entity will pay dividends for the year of:
A. S $10,625
B. S $21
C. S $23,125
D. S $42,500
View answer
Correct Answer: A
Question #77
The chart displays the:
A. rithmetic mean of each computer complaint
B. elative frequency of each computer complaint
C. edian of each computer complaint
D. bsolute frequency of each computer complaint
View answer
Correct Answer: D
Question #78
Which of the following refers to taxes that do not necessarily take a larger absolute share of an increase in income?
A. rogressive
B. roportional
C. egressive
D. lat
View answer
Correct Answer: C
Question #79
Bondholders are assured of protection against inflation if they hold:
A. ncome bonds
B. onvertible bonds
C. ortgage bonds
D. ndexed bonds
View answer
Correct Answer: D
Question #80
Through the use of decision models, managers thoroughly analyze many alternatives and decide on the best alternative for the company. Often the actual results achieved from a particular decision are not what was expected when the decision was made. In addition, an alternative that was not selected would have actually been the best decision for the company.The appropriate technique to analyze the alternatives by using expected inputs and altering them before a decision is made is:
A. xpected value analysis
B. inear programming
C. rogram evaluation review technique PERT
D. ensitivity analysis
View answer
Correct Answer: D
Question #81
Shown below is a forecast of sales for the first 4 months of the year all amounts are in thousands of dollars).On average, 50% of credit sales are paid for in the month of sale, 30% in the month following the sale, and the remainder is paid 2 months after the month of sale. Assuming there are no bad debts, what is the expected cash inflow in March?
A. S $138,000
B. S $122,000
C. S $119,000
D. S $108,000
View answer
Correct Answer: D
Question #82
The halo effect may diminish the accuracy of the evaluation of employees.Which of the following is an example?
A. manager rates some employees as very good and some as very poor
B. manager's judgment of one positive trait affects his/her rating of other traits
C. he most recent behavior overshadows overall performance
D. ll personnel who work together are rated within the same narrow range
View answer
Correct Answer: B
Question #83
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?
A. he customer is always right
B. ustomer complaints should be processed promptly
C. mployees should maintain a positive attitude when dealing with customers
D. ll customer inquiries should be answered within 7 days of receipt
View answer
Correct Answer: D
Question #84
Which of the following financial statement analyses is most useful in determining whether the various expenses of a given entity are higher or lower than industry averages?
A. orizontal
B. ertical
C. ctivity ratio
D. efensive-interval ratio
View answer
Correct Answer: B
Question #85
Basic earnings per share for entity is approximately:
A. S $1 73
B. S $1
C. S $2
D. S$227
View answer
Correct Answer: A
Question #86
The purpose of input controls is to ensure the:
A. uthorization of access to data files
B. uthorization of access to program files
C. ompleteness, accuracy, and validity of updating
D. ompleteness, accuracy, and validity of input
View answer
Correct Answer: D
Question #87
Which of the following is a definition of predatory pricing?
A. ricing products below cost to destroy competitors
B. ricing products at different prices for different customers
C. onspiring to restrict output and set artificially high prices
D. elling below cost in other countries
View answer
Correct Answer: A
Question #88
Which of the following is not an appropriate measure of quality?
A. arket share
B. elivery performance
C. ustomer satisfaction
D. aw materials costs
View answer
Correct Answer: D
Question #89
In preparing the annual profit plan for the coming year.Based upon the data derived from the regression analysis, 420 maintenance hours in a month would mean the maintenance costs (rounded to the nearest US dollar) would be budgeted at:
A. S$3,780
B. S$3,600
C. S$3,790
D. S$3,746
View answer
Correct Answer: D
Question #90
A bank plans to open a branch in one of five locations (labeled L1, L2, L3, L4, L5). Demand for bank services may be high, medium, or low at each of thes e locations Profits for each location- demand combination are presented in the payoff matrix.If the bank uses the minimax regret criterion for selecting the location of the branch. it will select:
A. I
B. 2
C. 3
D. 5
View answer
Correct Answer: B
Question #91
From the viewpoint of the investor, which of the following securities provides the east risk?
A. ortgage bond
B. ubordinated debenture
C. ncome bond
D. ebentures
View answer
Correct Answer: A
Question #92
Traditional information systems development procedures that ensure proper consideration of controls may not be followed by users developing end-user computing EUC) applications.Which of the following is a prevalent risk in the development of EUC applications?
A. anagement decision making may be impaired due to diminished responsiveness to management's requests for computerized information
B. anagement may be less capable of reacting quickly to competitive pressures due to increased application development time
C. anagement may place the same degree of reliance on reports produced by EUC applications as it does on reports produced under traditional systems development procedures
D. anagement may incur increased application development and maintenance costs for EUC systems, compared with traditional mainframe) systems
View answer
Correct Answer: C
Question #93
Six months after a disgruntled systems programmer was fired and passwords disabled, the company's mainframe computer was brought to a halt when it suddenly erased all of its own files and software. The most likely way the programmer accomplished this was by:
A. eturning to the computer center after 6 months
B. lanting a computer virus through the use of telephone access
C. aving an accomplice in the computer center
D. mplanting a virus in the operating system and executing it via a back door
View answer
Correct Answer: D
Question #94
The expected time of the critical path is:
A. 2
B. 3
C. 1
D. 1
View answer
Correct Answer: B
Question #95
An automobile company that uses the futures market to set the price of steel to protect a profit against price increases is an example of:
A. short hedge
B. long hedge
C. elling future
D. elling future
View answer
Correct Answer: B
Question #96
Which of the following is a tool of monetary policy that a nation's central bank could use to stabilize the economy during an inflationary period?
A. elling government securities
B. owering bank reserve requirements
C. owering bank discount rates
D. ncouraging higher tax rates
View answer
Correct Answer: A
Question #97
An investor has been given several financial ratios for an entity but none of the financial reports.Which combination of ratios can be used to derive return on equity?
A. arket-to-book-value ratio and total-debt-to-total-assets ratio
B. rice-to-earnings ratio, earnings per share, and profit margin
C. rice-to-earnings ratio and return-on-assets ratio
D. rofit margin, total assets turnover, and equity multiplier
View answer
Correct Answer: D
Question #98
A service entity's working capital at the beginning of January was 70,000. The following transactions occurred during January.What is the amount of working capital at the end of January?
A. S $80,500
B. S $78,500
C. S $50,500
D. S $47,500
View answer
Correct Answer: A
Question #99
An internal auditor for a large automotive parts retailer wishes to perform a risk analysis and wants to use an appropriate statistical tool to help identify stores that would be out of line compared to the majority of stores. The most appropriate statistical tool to use is:
A. ine artime series analysis
B. ross-sectional regression analysis
C. ross tabulations with chi-square analysis of significance
D. ime series multiple regression analysis to identify changes in individual stores over time
View answer
Correct Answer: B
Question #100
The accountant who prepared a spreadsheet model for workload forecasting left the company, and the accountant's successor was unable to understand how to use the spreadsheet. The best control for preventing such situations from occurring is to ensure that:
A. se of end-user computing resources is monitored
B. nd-user computing efforts are consistent with strategic plans
C. ocumentation standards exist and are followed
D. dequate backups are made for spreadsheet models
View answer
Correct Answer: C
Question #101
Statistical quality control often involves the use of control charts whose basic purpose is to:
A. etermine when accounting control procedures are not working
B. ontrol labor costs in production operations
C. etect performance trends away from normal operations
D. onitor internal control applications of information technology
View answer
Correct Answer: C
Question #102
Total inventory ordering costs per year equal:
A. S $1,250
B. S $2,400
C. S $2,880
D. S $3,600
View answer
Correct Answer: C
Question #103
COBIT is targeted at all of the following except:
A. anagement
B. sers
C. hareholders
D. uditors
View answer
Correct Answer: C
Question #104
Program documentation is a control designed primarily to ensure that:
A. rogrammers have access to production programs
B. rograms do not make mathematical errors
C. rograms are kept up to date and perform as intended
D. o one has made use of the computer hardware for personal reasons
View answer
Correct Answer: C
Question #105
A pricing strategy that sells combinations of products at a price lower than the combined prices of the individual items is:
A. redatory pricing
B. oing-rate pricing
C. roduct-bundle pricing
D. aptive-product pricing
View answer
Correct Answer: C
Question #106
Exchange rates are determined by:
A. ach industrial country's government
B. he International Monetary Fund
C. upply and demand in the foreign currency market
D. xporters and importers of manufactured goods
View answer
Correct Answer: C
Question #107
A means of limiting production delays caused by equipment breakdown and repair is to:
A. chedule production based on capacity planning
B. lan maintenance activity based on an analysis of equipment repair work orders
C. re-authorize equipment maintenance and overtime pay
D. stablish a preventive maintenance program for all production equipment
View answer
Correct Answer: D
Question #108
The time that car 4 will have to wait to be:
A. -2 minutes
B. minutes
C. minutes
D. + minutes
View answer
Correct Answer: C
Question #109
A device used to connect dissimilar networks is a:
A. ateway
B. ridge
C. outer
D. iring concentrator
View answer
Correct Answer: A
Question #110
The use of message encryption software:
A. uarantees the secrecy of data
B. equires manual distribution of keys
C. ncreases system overhead
D. educes the need for periodic password changes
View answer
Correct Answer: C
Question #111
The times-interest-earned ratio is primarily an indication of:
A. olvency
B. iquidity
C. sset management
D. rofitability
View answer
Correct Answer: A
Question #112
The cost of scrap, rework, and tooling changes in a product quality cost system is categorized as a n)
A. raining cost
B. xternal failure cost
C. nternal failure cost
D. revention cost
View answer
Correct Answer: C
Question #113
The following information applies to an entity. Purchases Sales:A cash payment equal to 40% of purchases is made at the time of purchase, and 30% is paid in each of the next 2 months. Purchases for the previous November and December were US $150,000 per month. Payroll is 10% of sales in the month it occurs, and operation expenses are 20% of the following month's sales July sales were US $220,000). Interest payments were US , " x,000 paid quarterly in January and April.What were the entity's cash disbursemen
A. S $140,000
B. S $152,000
C. S $200,000
D. S $254,000
View answer
Correct Answer: D
Question #114
Which statement best describes the emphasis of total quality management (TQM)?
A. educing the cost of inspection
B. mplementing better statistical quality control techniques
C. oing each job right the first time
D. ncouraging cross-functional teamwork
View answer
Correct Answer: C
Question #115
Heniser Pet Foods manufactures two products, X. and Y. The unit contribution margins forProducts X. and Y are US $30 and US $50, respectively. Each product uses Materials A and
A. roduct uses 6 pounds of Material A and 12 pounds of Material B
B. 46 units of and 0 units of Y
C. units of X and 100 units of Y
D. 20 units of and 40 units of Y
E. 0 units of X
View answer
Correct Answer: C
Question #116
A firm must decide the mix of production of Product X and Product Y. There are only two resources used in the two products, resources A and B. Data related to the two products is given in the following table:What is the appropriate objective function to maximize profit?
A. X + 7Y
B. X+Y
C. X + 6Y
D. X + 8Y
View answer
Correct Answer: C
Question #117
A plumbing company, a wholesale distributor, supplies plumbing contractors and retailers throughout the Northeast on a next-day delivery basis. The company has a centrally located warehouse to accept receipts of plumbing supplies. The warehouse has a single dock to accept and unload railroad freight cars during the night. It takes 5 hours to unload each freight car. The company's prior records indicate that the number of freight cars that arrive in the course of a night range from zero to five or more, with
A. nteger programming
B. inear programming
C. onte Carlo simulation
D. egression analysis
View answer
Correct Answer: C
Question #118
Which of the following is not a characteristic of an effective evaluation system?
A. elevant
B. ignificant
C. nbiased
D. ighly structured
View answer
Correct Answer: D
Question #119
Which of the following is a false statement about a database management system application environment?
A. ata are used concurrently by multiple users
B. ata are shared by passing files between programs or systems
C. he physical structure of the data is independent of user needs
D. ata definition is independent of any one program
View answer
Correct Answer: B
Question #120
A bank has changed from a system in which lines are formed in front of each teller - to a one line, multiple-server system.When a teller is free, the person at the head of the line goes to that teller. Implementing the new system will:
A. ecrease the bank's wage expenses because the new system uses fewer tellers
B. ecrease time customers spend in the line
C. ncrease accuracy in teller reconciliations at the end of the day because fewer customers are served by each teller
D. mprove on-the-job training for tellers because each will perform different duties
View answer
Correct Answer: B
Question #121
A manufacturing resource planning MRP II) system:
A. erforms the same back-office functions for a manufacturer as an ERP system
B. ses a master production schedule
C. acks the forecasting and budgeting capabilities typical of an ERP system
D. erforms the same front-office functions for a manufacturer as an ERP system
View answer
Correct Answer: B
Question #122
The type of option that does not have the backing of stock is called a(n):
A. overed option
B. nsecured option
C. aked option
D. ut option
View answer
Correct Answer: C
Question #123
Which of the following represents an entity's average gross receivables balance?I). Days' sales in receivables x accounts receivable turnover.II). Average daily sales x average collection period.III). Net sales/average gross receivables.
A. only
B. and II only
C. I only
D. I and III only
View answer
Correct Answer: C
Question #124
Which of the following is not an appropriate measure of quality?
A. arket share
B. elivery performance
C. ustomer satisfaction
D. aw materials costs
View answer
Correct Answer: D
Question #125
Which one of the following input controls or edit checks would catch certain types of errors within the payment amount field of a transaction?
A. ecord count
B. cho check
C. heck digit
D. imit check
View answer
Correct Answer: D
Question #126
Several surveys paint out that most managers use full product casts, including unit fixed casts and unit variable costs, in developing cast-based pricing.Which one of the following is least associated with cost-based pricing?
A. rice stability
B. rice justification
C. arget pricing
D. ixed-cost recovery
View answer
Correct Answer: C
Question #127
The degree of financial leverage of B, to two decimal places, is:
A. 03
B. 05
C. 2
D.
View answer
Correct Answer: B
Question #128
A manufacturing resource planning MRP II) system:
A. erforms the same back-office functions for a manufacturer as an ERP system
B. ses a master production schedule
C. acks the forecasting and budgeting capabilities typical of an ERP system
D. erforms the same front-office functions for a manufacturer as an ERP system
View answer
Correct Answer: B
Question #129
As part of a risk analysis, an auditor wishes to forecast the percentage growth in next month's sales for a particular plant using the past 30 months" sales results. Significant changes in the organization affecting sales volumes were made within the last 9 months. The most effective analysis technique to use would be:
A. nweighted moving average
B. xponential smoothing
C. ueuing theory
D. inear regression analysis
View answer
Correct Answer: B
Question #130
The inventory model that follows the concept that 80% of the value of an inventory is in 20% of the inventory items is the:
A. BC system
B. conomic order quantity EOQ) model
C. ust-in-time inventory system
D. aterials requirements planning MRP) system
View answer
Correct Answer: A
Question #131
Based on a comparison of RST's times-interest-earned ratios in Year 5 and Year 6, what is a likely conclusion?
A. ST's long-run solvency has declined
B. ST's long-run solvency has improved
C. ST's liquidity has improved
D. ST's liquidity has declined
View answer
Correct Answer: B
Question #132
The Entity has dividend-payout ratio of:
A. 9
B. 8
C. 0
D. 0
View answer
Correct Answer: D
Question #133
Market-skimming pricing strategies could be appropriate when:
A. o buyers want the product at a high price
B. he costs of producing a small volume are low
C. ompetitors can easily enter the market
D. he product is of poor quality
View answer
Correct Answer: B
Question #134
A perpetual inventory system uses a minimum quantity on hand to initiate purchase ordering procedures for restocking. In reviewing the appropriateness of the minimum quantity level established by the stores department, the internal auditor is least likely to consider
A. tockout costs, including lost customers
B. easonal variations in forecasting inventory demand
C. ptimal order sizes determined by the economic order quantities model
D. vailable storage space and potential obsolescence
View answer
Correct Answer: C
Question #135
Which or the following models is essentially an application to cash management of the inventory economic order quantity EDO) formula?
A. iller-Orr cash management model
B. aumol cash management model
C. ltman's Z-Score model
D. rbitrage pricing model
View answer
Correct Answer: B
Question #136
In most countries taxes tend to be with respect to income
A. ption A
B. ption B
C. ption C
D. ption D
View answer
Correct Answer: B
Question #137
With regard to e-commerce, risk is best defined as the uncertainty of an event that could:
A. ave a negative impact on the achievement of objectives
B. ositively impact management's ability to safeguard organizational assets
C. ave a positive impact on the achievement of objectives
D. ave an impact on the effective and efficient use of an organization's resources
View answer
Correct Answer: A
Question #138
If a series of profit lines for and Y are drawn on the graph, the mix of G and Y that will result in the maximum profit can be determined from:
A. he last point in the feasible solution region touched by a profit line
B. ny point on the boundary of the feasible solution region touched by a profit line
C. he first paint an the feasible solution region boundary that intersects a profit line
D. ny point on the demand constraint that intersects a profit line
View answer
Correct Answer: A
Question #139
Change control typically includes procedures for separate libraries for production programs and for test versions of programs. The reason for this practice is to:
A. romote efficiency of system development
B. egregate incompatible duties
C. acilitate user input on proposed changes
D. ermit unrestricted a access to programs
View answer
Correct Answer: B
Question #140
Faced with 3 years of steadily decreasing profits despite increased sales and a growing economy,which of the following is the healthiest course of action for a chief executive officer to take?
A. et a turnaround goal of significantly increasing profits within 2 months
B. educe staff by 10% in every unit
C. lassify all job functions as either a) adding value in the eyes of the customer such as production and sales) or b) not adding value in the eyes of the customer such as accounting and human resources)_ Reduce staff in the non-value-adding functions by 20%
D. mplement a plan to encourage innovation at all levels
View answer
Correct Answer: D
Question #141
Based on a comparison of RST's times-interest-earned ratios in Year 5 and Year 6, what is a likely conclusion?
A. ST's long-run solvency has declined
B. ST's long-run solvency has improved
C. ST's liquidity has improved
D. ST's liquidity has declined
View answer
Correct Answer: B
Question #142
The problem just described is best approached by use of which quantitative method?
A. ntegrated autoregressive-moving average (ARIMA) modeling
B. xponential smoothing, multiple parameters
C. ueuing theory
D. inear programming
View answer
Correct Answer: C
Question #143
The purpose of the economic order quantity model is to:
A. inimize the safety stock
B. inimize the sum of the order costs and the holding costs
C. inimize the inventory quantities
D. inimize the sum of the demand costs and the backlog costs
View answer
Correct Answer: B
Question #144
Which one of the graphs depicts the demand curve for prestige goods?
A. ption A
B. ption C
C. ption C
D. ption D
View answer
Correct Answer: C
Question #145
Business process reengineering is most likely to:
A. mplement modern information systems technology to eliminate some controls
B. e applied within individual departments
C. mprove existing procedures
D. pply a continuous improvement model
View answer
Correct Answer: A
Question #146
Which of the following statements is true with respect to international transfer pricing?
A. ransfer prices charged to foreign subsidiaries must be the same as those charged to domestic subsidiaries
B. he existence of tariffs in the foreign country may necessitate that a higher transfer price be charged a foreign subsidiary
C. imitations on taking profits out of a foreign country can be avoided by charging the foreign subsidiary a higher transfer price
D. urrency restrictions prohibit payments to foreign vendors
View answer
Correct Answer: C
Question #147
Which of the following is an important senior management responsibility with regard to information systems security?
A. ssessing exposures
B. ssigning access privileges
C. dentifying ownership of data
D. raining employees in security matters
View answer
Correct Answer: A
Question #148
Which line segment identifies the quantity of safety stock maintained?
A. B
B. E
C.
D. C
View answer
Correct Answer: B
Question #149
Enterprise-wide resource planning ERP) software packages, such as SAP and Oracle, are all- inclusive systems that attempt to provide entity-wide information. ERP systems provide advantages to the auditor because they:
A. ave proven difficult for some firms to install
B. ypically require firms to reduce the division of duties and responsibilities found in traditional systems
C. ypically have built-in transaction logs and the ability to produce a variety of diagnostic reports
D. ave been installed by smaller firms so, to date, few auditors have encountered them
View answer
Correct Answer: C
Question #150
A division uses a regression in which monthly advertising expenditures are used to predict monthly product sales both in millions of US dollars). The results show a regression coefficient for the independent variable equal to 0.8. This coefficient value indicates that:
A. he average monthly advertising expenditure in the sample is US $800,000
B. hen monthly advertising is at its average level, product sales will be US $800,000
C. n average, every additional dollar of advertising results in US $
D. dvertising is not a good predictor of sales because the coefficient is so small
View answer
Correct Answer: C
Question #151
The process model used in a theory of constraints (TOC) analysis is called:
A. ust-in-time
B. rum-buffer-rope
C. aterials requirements planning
D. ean production
View answer
Correct Answer: B
Question #152
As organizations become more computer integrated, management is becoming increasingly concerned with the quality of access controls to the computer system.Which of the following provides the most accountability?
A. ption I
B. ption II
C. ption III
D. ption IV
View answer
Correct Answer: A
Question #153
Which of the following is usually a benefit of transmitting transactions in an electronic data interchange (EDI) environment?
A. compressed business cycle with lower year-end receivables balances
B. reduced need to test computer controls related to sales and collections transactions
C. n increased opportunity to apply statistical sampling techniques to account balances
D. o need to rely on third-parry service providers to ensure security
View answer
Correct Answer: A
Question #154
If a just-in-time purchasing policy is successful in reducing the total inventory costs of a manufacturing company, which of the following combinations of cost changes would be most likely to occur?
A. n increase in purchasing costs and a decrease in stockout costs
B. n increase in purchasing costs and a decrease in quality costs
C. n increase in quality costs and a decrease in ordering costs
D. n increase in stockout costs and a decrease in carrying costs
View answer
Correct Answer: D
Question #155
When an entity finances each asset with a financial instrument of the same approximate maturity as the life of the asset, it is applying:
A. orking capital management
B. eturn maximization
C. inancial leverage
D. hedging approach
View answer
Correct Answer: D
Question #156
The marketing department's proposal was finally accepted, and the marketing employees attended a class in using the report writer. Soon, the marketing analysts found that it was easier to download the data and manipulate it on their own desktop computers in spreadsheets than to perform all the data manipulation on the server. One analyst became highly skilled at downloading and wrote downloading command sequences for the other employees.When the analyst left the company for a better job, the department had
A. ocumentation
B. ata backup
C. rogram testing
D. nti-virus software
View answer
Correct Answer: A
Question #157
While auditing a marketing department, the internal auditor discovered that the product life cycle model was used to structure the marketing mix Under such a philosophy, the price charged on a consistent basis for a specific product would probably be lowest during which life cycle stage?
A. ntroduction stage
B. rowth stage
C. aturity stage
D. ecline stage
View answer
Correct Answer: C
Question #158
Which of the following is a tool of monetary policy that a nation's central bank could use to stabilize the economy during an inflationary period?
A. elling government securities
B. owering bank reserve requirements
C. owering bank discount rates
D. ncouraging higher tax rates
View answer
Correct Answer: A
Question #159
Under a value-added taxing system:
A. usinesses must pay a tax only if they make a profit
B. he consumer ultimately bears the incidence of the tax through higher prices
C. onsumer savings are discouraged
D. he amount of value added is the difference between an entity's sales and its cost of goods sold
View answer
Correct Answer: B
Question #160
Which one of the following input validation routines is not likely to be appropriate in a real-time operation?
A. ign check
B. easonableness check
C. equence check
D. edundant data check
View answer
Correct Answer: C
Question #161
In a product's life cycle, the first symptom of the decline stage is a decline in the:
A. ntity's inventory levels
B. roduct's sales
C. roduct's production cost
D. roduct's prices
View answer
Correct Answer: B
Question #162
Which of the following is not a component of physical distribution?
A. ransportation
B. ricing
C. ocation of retail outlets
D. arehousing
View answer
Correct Answer: B
Question #163
Which of the following are essential elements of the audit trail in an electronic data interchange EDI) system?
A. etwork and sender/recipient acknowledgments
B. essage directories and header segments
C. ontingency and disaster recovery plans
D. rading partner security and mailbox codes
View answer
Correct Answer: A
Question #164
The operating condition that cannot be identified by using a queuing model is the:
A. verage percentage of time that a service facility is idle
B. robability of a specified number of units in the queue
C. ctual amount of time each unit spends in the queue
D. verage number of units in the system and the mean length of the queue
View answer
Correct Answer: C
Question #165
A validation check used to determine if a quantity ordered field contains only numbers is an example of a(n):
A. nput control
B. udit trail control
C. rocessing control
D. ata security control
View answer
Correct Answer: A
Question #166
Which new issues, associated with rapidly advancing computer technology, create new risk exposures for organizations?
A. hanges in organizational reporting requirements and controls over computer abuse
B. ontrols over library tape procedures
C. omplexity of operating systems and controls over privacy of data
D. hanges in organizational behavior
View answer
Correct Answer: C
Question #167
A bank has two drive-in lanes to serve customers:The technique used in analyzing the problem is best described as:
A. imulation theory
B. ntegrated autoregressive-moving average (ARIMA) modeling
C. inear programming
D. ifferential calculus
View answer
Correct Answer: A
Question #168
Before sending or receiving EDI messages, a company should:
A. xecute a trading partner agreement with each of its customers and suppliers
B. educe inventory levels in anticipation of receiving shipments
C. emand that all its suppliers implement EDI capabilities
D. valuate the effectiveness of its use of EDI transmissions
View answer
Correct Answer: A
Question #169
An entity has daily cash receipts of US $300,000. A bank has offered to provide a lockbox service that will reduce the collection time by 3 days. The bank requires a monthly fee of US $2,000 for providing this service. If money market rates are expected to average 6% during the year, the additional annual income loss) of using the lockbox service is:
A. S $(24,000)
B. S $12,000
C. S $30,000
D. S $54,000
View answer
Correct Answer: C
Question #170
While auditing a marketing department, the internal auditor discovered that the product life cycle model was used to structure the marketing mix. Under such a philosophy, the price charged on a consistent basis for a specific product would probably be lowest during which life cycle stage?
A. ntroduction stage
B. rowth stage
C. aturity stage
D. ecline stage
View answer
Correct Answer: C
Question #171
Because of the large number of factors that could affect the demand for its new product, interactions among these factors, and the probabilities associated with different values of these factors, the marketing department would like to develop a computerized model for projecting demand for this product. By using a random-number procedure to generate values for the different factors .it will be able to estimate the distribution of demand for this new product. This method of estimating the distribution of dema
A. onte Carlo simulation
B. inear programming
C. orrelation analysis
D. ifferential analysis
View answer
Correct Answer: A
Question #172
The market value of an entity's outstanding ordinary shares will be higher, everything else equal, if investors:
A. ave a lower required return on equity
B. xpect lower dividend growth
C. ave longer expected holding periods
D. ave shorter expected holding periods
View answer
Correct Answer: A
Question #173
The techniques used in analyzing the problem is best described as:
A. imultaneously theory
B. ntegrated auto aggressive-moving average ARIMA) modeling
C. inear programming
D. ifferential calculus
View answer
Correct Answer: A
Question #174
If a corporation holds a forward contract for the delivery of government bonds in 6 months and, during those 6 months, interest rates decline, at the end of the 6 months the value of the forward contract will have:
A. ecreased
B. ncreased
C. emained constant
View answer
Correct Answer: B
Question #175
When an entity reports amounts for basic and diluted earnings per share,
A. he entity should be presented with equal prominence on the face of the income statement
B. he entity need not be shown on the face of the income statement but must be disclosed in the notes to the financial statements
C. he entity need to be reported for profit or loss only
D. EPS should be presented on the face of the income statement
View answer
Correct Answer: A
Question #176
During the past few years, Wilder Company has experienced the following average number of power outages:Each power outage results in out-of-pocket costs of US $800. For US $1,000 per month, Wilder can lease a generator to provide power during outages. If Wilder leases a generator in the coming year, the estimated savings (or additional expense) for the year will be
A. S $(15,200)
B. S $(1,267)
C. S$3,200
D. S$7,200
View answer
Correct Answer: C
Question #177
Which of the following is not true about the advantages of adopting ISO 9000 standards?
A. doption of ISO 9000 standards may allow the company to sell products in foreign markets
B. SO registration makes customers more comfortable with the supplier's products and services
C. SO 9000 allows companies to understand who internal customers and users are without sharing private information
D. SO registration may help companies discover internal process and quality improvements
View answer
Correct Answer: C
Question #178
Which of the following is not a major component of an audit of e-commerce activities?
A. ake certain that goals and objectives can be achieved
B. ssess the internal control structure
C. eview the interface issues
D. valuate the business continuity and disaster recovery plans
View answer
Correct Answer: A
Question #179
A seller's price is below an appropriate measure of casts. Moreover, the seller has a reasonable prospect of recovering the resulting loss in the future through higher prices or a greater market share. Accordingly, the seller has engaged in:
A. ollusive pricing
B. umping
C. redatory pricing
D. rice discrimination
View answer
Correct Answer: C
Question #180
Before authorizing payment of an EDI invoice, the computer automatically compares the invoice with the purchase order and receiving report data.When the system was being developed, the auditor reviewed the payment authorization program and made recommendations.Which one of the following was most likely recommended by the auditor for the situation in which the quantity invoiced is greater than the quantity received?
A. repare an exception report
B. ay the amount billed and adjust the inventory for the difference
C. eturn the invoice to the vendor
D. uthorize payment of the full invoice, but maintain an open purchase order record for the missing goods
View answer
Correct Answer: A
Question #181
The entity has a fixed assets balance of:
A. S $0
B. S $16
C. S $58
D. S $64
View answer
Correct Answer: C
Question #182
Contingency plans for information systems should include appropriate backup agreements.Which of the following arrangements would be considered too vendor dependent when vital operations require almost immediate availability of computer resources?
A. "hot site" arrangement
B. "cold site" arrangement
C. "cold and hot site" combination arrangement
D. sing excess capacity at another data center within the organization
View answer
Correct Answer: B
Question #183
A change in credit policy has caused an increase in sales, an increase in discounts taken, a decrease in the amount of bad debts, and a decrease in the investment in accounts receivable.Based upon this information, the entity's:
A. verage collection period has decreased
B. ercentage discount offered has decreased
C. ccounts receivable turnover has decreased
D. orking capital has increased
View answer
Correct Answer: A
Question #184
A company updates its accounts receivable master file weekly and retains the master files and corresponding update transactions for the most recent 2-week period.The purpose of this practice is to
A. erify run-to-run control totals for receivables
B. atch internal labels to avoid writing on the wrong volume
C. ermit reconstruction of the master file if needed
D. alidate groups of update transactions for each version
View answer
Correct Answer: C
Question #185
A taxpayer who earns US $50,000 during the year and pays a 15% tax rate on the first US$30,000 of income and a 30% tax rate on all earnings over US $30,000 has a(n):
A. arginal tax rate of 15%
B. arginal tax rate of 21%
C. verage tax rate of 21%
D. verage tax rate of 22
View answer
Correct Answer: C
Question #186
Price skimming involves:
A. etting a low introductory price
B. etting a high introductory price
C. etting different freight charges for customers in different zones
D. sing markups tied closely to the price paid for a product
View answer
Correct Answer: B
Question #187
All else being equal, an entity with a higher dividend-payout ratio will have a debt-to- assets ratio and a
A. ption A
B. ption B
C. ption C
D. ption D
View answer
Correct Answer: B
Question #188
Companies that adapt just-in-time purchasing systems often experience
A. n increase in carrying costs
B. reduction in the number of suppliers
C. greater need for inspection of goods as the goods arrive
D. ess need for linkage with a vendor's computerized order entry system
View answer
Correct Answer: B
Question #189
The use of derivatives to either hedge or speculate results in:
A. ncreased risk regardless of motive
B. ecreased risk regardless of motive
C. ffset risk when hedging and increased risk when speculating
D. ffset risk when speculating and increased risk when hedging
View answer
Correct Answer: C
Question #190
Image processing systems have the potential to reduce the volume of paper circulated throughout an organization. To reduce the likelihood of users relying on the wrong images, management should ensure that appropriate controls exist to maintain the:
A. egibility of image data
B. ccessibility of image data
C. ntegrity of index data
D. nitial sequence of index data
View answer
Correct Answer: C
Question #191
Assume that the value of a share of QQ Company ordinary stock at the expiration date is either US $30 or US $45.What is the difference in the net payoff on the portfolio because of a difference in the stock price at the maturity date?
A. S $10
B. S $7
C. S $5
D. S $0
View answer
Correct Answer: D
Question #192
The entity has return on assets of:
A. 1
B. 9
C. 2
D. 5
View answer
Correct Answer: A
Question #193
The value of retaining employees is determined by:
A. uman asset accounting
B. inancial accounting
C. ost accounting
D. uman resource planning
View answer
Correct Answer: A
Question #194
Quality control programs employ many tools for problem definition and analysis. A scatter diagram is one of these tools. The objective of a scatter diagram is to:
A. isplay a population of items for analysis
B. how frequency distribution in graphic form
C. ivide a universe of data into homogeneous groups
D. how the vital trend and separate trivial items
View answer
Correct Answer: A
Question #195
In the standard regression equation y- a + bx, how is the letter £> best described?
A. ndependent variable
B. ependent variable
C. intercept
D. lope of the regression line
View answer
Correct Answer: D
Question #196
The entity has return on assets of:
A. 1
B. 9
C. 2
D. 5
View answer
Correct Answer: A
Question #197
The channel structure in which producers, wholesalers, and retailers act as a unified system is a:
A. orizontal distribution system
B. ertical distribution system
C. nilateral distribution system
D. ultichannel system
View answer
Correct Answer: B
Question #198
An example of an internal nonfinancial benchmark is:
A. he labor rate of comparably skilled employees at a major competitor's plant
B. he average actual cost per pound of a specific product at the company's most efficient plant
C. US $50,000 limit on the cost of employee training programs at each of the company's plants
D. he percentage of customer orders delivered on time at the company's most efficient plant
View answer
Correct Answer: D
Question #199
Response time on a local area network LAN) was so slow that programmers working on applications kept their code on their own workstations rather than on the server. As a result, daily backups of the server did not contain the current source code. The best approach to detect deteriorating response time is:
A. arallel testing
B. ntegrated test facility
C. erformance monitoring
D. rogram code comparison software
View answer
Correct Answer: C
Question #200
Should CyberAge use trade credit and continue paying at the end of the credit period?
A. es, if the cost of alternative short-term financing is less
B. es, if the entity's weighted-average cost of capital is equal to its weighted-average cost of trade credit
C. o, if the cost of alternative long-term financing is greater
D. es, if the cost of alternative short-term financing is greater
View answer
Correct Answer: D
Question #201
An entity average of inventory US $4,000 in sales per day and is paid on an average within 30 days of the sale. After they receive their invoke, 55% of the customers pay by check, while the remaining 45% pay by credit card. Approximately how much would the entity show in accounts receivable on its balance sheet on any given date?
A. S $4,000
B. S $120,000
C. S $48,000
D. S $54,000
View answer
Correct Answer: B

View Answers after Submission

Please submit your email and WhatsApp to get the answers of questions.

Note: Please make sure your email ID and Whatsapp are valid so that you can get the correct exam results.

Email:
Whatsapp/phone number:


Copyright © 2024. Designer by SPOTO Official Website. All Rights Reserved.