Free IIA CIA Part 3 Exam Questions & Practice Test

Question #1

In general, mainframe or server production programs and data are adequately protected against unauthorized access. Certain utility software may, however, have privileged access to software and data. To compensate for the risk of unauthorized use of privileged software, IT management can:

A. revent privileged sotto are from being installed on the mainframe

B. estrict privileged access to test versions of applications

C. imit the use of privileged software

D. eep sensitive programs and data on an isolated machine

View answer

Correct Answer: C

Question #2

Which of the following is true about the impact of price inflation on financial ratio analysis?

A. nflation has no impact on financial ratio analysis

B. nflation affects financial ratio analysis for one entity over time but not comparative analysis of entities of different ages

C. nflation affects financial ratio analysis for one entity over time, as well as comparative analysis of entities of different ages

D. nflation affects comparative analysis of entities of different ages but not financial ratio analysis for one entity over time

View answer

Correct Answer: C

Question #3

Security of monetary transactions is one example of an audit objective for an e-commerce engagement.Which of the following is not an audit objective for an e-commerce engagement?

A. ffective use and control of digital signatures

B. dequacy and timeliness of operating data and information

C. ffectiveness of customer authentication process

D. ppropriateness of reporting lines

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Correct Answer: D

Question #4

The operating condition that car-or-mot 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

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Correct Answer: C

Question #5

The use of teams in total quality management TOM) is important because:

A. ell-managed teams can be highly creative and are able to address complex problems better than individuals can

B. eams are quicker to make decisions, thereby helping to reduce cycle time

C. mployee motivation is higher for team members than for individual contributors

D. he use of teams eliminates the need for supervision, thereby alloying a company to become leaner and more profitable

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Correct Answer: A

Question #6

In an economic order quantity EOQ) model, both the costs per order and the holding costs are estimates. If those estimates are varied to determine how much the changes affect the optimal EOQ, such an analysis would be called a:

A. orecasting model

B. ensitivity analysis

C. ritical path method analysis

D. ecision analysis

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Correct Answer: B

Question #7

The most difficult aspect of using Internet resources is:

A. aking a physical connection

B. btaining the equipment required

C. etting authorization for access

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Correct Answer: B

Question #8

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

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Correct Answer: C

Question #9

Minimizing the likelihood of unauthorized editing of production programs, job control language, and operating system software best be accomplished by:

A. atabase access reviews

B. ompliance reviews

C. hange control procedures

D. etwork security audits

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Correct Answer: C

Question #10

Which of the following should not be the responsibility of a database administrator?

A. esign the content and organization of the database

B. evelop applications to access the database

C. rotect the database and its software

D. onitor and improve the efficiency of the database

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Correct Answer: B

Question #11

What is RST's current ratio at the end of Year 6?

A.

B.

C.

D.

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Correct Answer: A

Question #12

Which of the following is a key to successful total quality management (TQM)?

A. raining quality inspectors

B. ocusing intensely on the customer

C. reating appropriate hierarchies to increase efficiency

D. stablishing a well-defined quality standard, then focusing on meeting it

View answer

Correct Answer: B

Question #13

The company has considered several alternatives for replacing the hardware required for a regional center's processing. An advantage of using a third-party cold site is that:

A. ersonnel employed at the site would be familiar with company operations

B. ravel expenses would be minimized for company personnel

C. o additional equipment would be required at the regional centers

D. he replacement site could be up and running in a few hours

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Correct Answer: C

Question #14

The auditor wishes to determine if the change in investment income during the current year was due to a) changes in investment strategy, b) changes in portfolio mix, or c) other factors.Which of the following analytical review procedures should the auditor use?

A. imple linear regression that compares investment income changes over the past 5 years to determine the nature of the changes

B. atio analysis that compares changes in the investment portfolio on a monthly basis

C. rend analysis that compares the changes in investment income as a percentage of total assets and of investment assets over the past 5 years

D. ultiple regression analysis that includes independent variables related to the nature of the investment portfolio and market conditions

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Correct Answer: D

Question #15

The marginal cost of debt for an entity is defined as the interest rate on debt minus

A. ption A

B. ption B

C. ption C

D. ption D

View answer

Correct Answer: C

Question #16

Activity scheduling information for the installation of a new computer system is given below.For this project, the critical path is:

A. -C

B. -E

C. -D-E

D. -D-C

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Correct Answer: C

Question #17

At the introduction stage of an innovative product, the profit growth is normally slow due to:

A. xpensive sales promotion

B. igh competition

C. vailable alternatives

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Correct Answer: A

Question #18

The encryption technique that requires two keys, a public key that is available to anyone for encrypting messages and a private key that is known only to the recipient for decrypting messages, is:

A. ivest, Shamir, and Adelman RSA)

B. ata encryption standard DES)

C. odulator-demodulator

D. cypher lock

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Correct Answer: A

Question #19

Assuming that the real rate of interest is the same in both countries, if Country A has a higher nominal interest rate than Country B, the currency of Country A will likely be selling at a:

A. orward discount relative to the currency of Country B

B. orward premium relative to the currency of Country

C. pot discount relative to the currency of Country B

D. pot premium relative to the currency of Country B

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Correct Answer: A

Question #20

The activity of trading futures with the objective of reducing or controlling risk is called:

A. nsuring

B. edging

C. hort-selling

D. actoring

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Correct Answer: B

Question #21

If a central bank wishes to implement an expansionary monetary policy, which one of the following actions would it take?

A. aise the reserve requirement and the rate at which member banks may borrow from the central bank

B. urchase additional government securities and lower the rate at which member banks may borrow from the central bank

C. educe the reserve requirement and raise the rate at which member banks may borrow from the central bank

D. aise the rate at which member banks may borrow from the central bank and sell government securities

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Correct Answer: B

Question #22

Which of the following is not an appropriate time series forecasting technique?

A. east squares

B. xponential smoothing

C. he Delphi technique

D. oving averages

View answer

Correct Answer: C

Question #23

Which of the following statements about voice communications is true?

A. odern voice recognition input devices have large vocabularies and short training periods

B. voice output device converts speech into digital data

C. ell phones and PCS services use the same frequency radio waves

D. agers can alert users to the receipt of messages but cannot transmit text

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Correct Answer: A

Question #24

Which of the following is an example of an efficiency measure?

A. he rate of absenteeism

B. he goal of becoming a leading manufacturer

C. he number of insurance claims processed per day

D. he goal of increasing market share

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Correct Answer: C

Question #25

Auditors making database queries often need to combine several tables to get the information they want. One approach to combining tables is known as:

A. xtraction

B. oining

C. orting

D. ummarization

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Correct Answer: B

Question #26

If a country uses trade quotas to overcome chronic trade deficits, what would the most likely outcome be?

A. nemployment and productivity rates will rise

B. nemployment rates will rise and productivity rates will decline

C. nemployment rates will decline and productivity rates will rise

D. nemployment and productivity rates will decline

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Correct Answer: D

Question #27

The company uses a planning system that focuses first on the amount and timing of finished goods demanded and then determines the derived demand for raw material, components, and subassemblies at each of the prior stages of production. This system is referred to as:

A. conomic order quantity

B. aterial requirements planning

C. inear programming

D. ust-in-time purchasing

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Correct Answer: B

Question #28

Management of a bookkeeping company observed that the average time spent to perform identical tasks using a new software package decreases as the number of tasks performed increases. The following information on the use of the new software was collected.If this learning effect continues, what is the average time to perform each of the first eight tasks?

A.

B.

C.

D.

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Correct Answer: A

Question #29

A client communicates sensitive data across the Internet.Which of the following controls would be most effective to prevent the use of the information if it were intercepted by an unauthorized part?

A. firewall

B. n access log

C. asswords

D. ncryption

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Correct Answer: D

Question #30

An analysis of inventory turnover in a store's clothing department indicated extremely low turnover.Which of the following would most likely increase the turnover rate?

A. ncrease inventories

B. ncrease sales incentives

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Correct Answer: B

Question #31

A situation in which companies conspire to restrict output and set artificially high prices is known as:

A. ollusive pricing

B. redatory pricing

C. rice discrimination

D. arket-based pricing

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Correct Answer: A

Question #32

A chief executive officer (CEO) believes that a major competitor may be planning a new campaign. The CEO sends a questionnaire to key personnel asking for original thinking concerning what the new campaign may be. The CEO selects the best possibilities and then sends another questionnaire asking for the most likely option. The process employed by the CEO is called the:

A. east squares technique

B. elphi technique

C. aximum likelihood technique

D. ptimizing of expected payoffs

View answer

Correct Answer: B

Question #33

Two major retail companies, both publicly traded and operating in the same geographic area, have recently merged. The companies are approximately the same size and have audit departments. Company A has little EDI experience. Company B has invested heavily in information technology and has EDI connections with its major vendors.Which of the following is the least important risk factor considering the ability to integrate the two companies' computer systems?

A. he number of programmers and systems analysts employed by each company

B. he extent of EDI connections with vendors

C. he compatibility of existing operating systems and database structures

D. he size of company databases and the number of database servers used

View answer

Correct Answer: A

Question #34

Electronic data interchange EDI) offers significant benefits to organizations, but it is not without certain major obstacles. Successful EDI implementation begins with which of the following?

A. apping the work processes and flows that support the organization's goals

B. urchasing new hardware for the EDI system

C. electing reliable vendors for translation and communication software

D. tandardizing transaction formats and data

View answer

Correct Answer: A

Question #35

A company} is formulating its plans for the coming year, including the preparation of its cash budget. Historically, 30% of the company's sales are cash sales. The remaining 70% are credit sales with the following collection pattern.For the month of April, the total cash receipts from sales and collections on account would be:

A. S $3,729,968

B. S $3,781,600

C. S $4,025,200

D. S $4,408,000

View answer

Correct Answer: B

Question #36

An organization has collected data on the complaints made by personal computer users and has categorized the complaints.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

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Correct Answer: D

Question #37

Monitoring is an important component of internal control.Which of the following is not an example of monitoring?

A. anagement regularly compares divisional performance with budgets for the division

B. ata processing management regularly generates exception reports for unusual transactions or volumes of transactions and follows up with investigation as to causes

C. ata processing management regularly reconciles batch control totals for items processed with batch controls for items submitted

D. anagement has asked internal auditing to perform regular audits of the controls over cash processing

View answer

Correct Answer: C

Question #38

One of the elements included in the economic order quantity EOQ) formula is:

A. afety stock

B. early demand

C. elling price of item

D. ead time for delivery

View answer

Correct Answer: B

Question #39

The College Honor Society sells hot pretzels at the home football games. The pretzels are sold for $1.00 each, and the cost per pretzel is $.30. Any unsold pretzels are discarded because they will be stale before the next home game.The frequency distribution of the demand for pretzels per game is presented as follows:Unit Sales Volume Probability2,000 pretzels .103,000 pretzels .154,000 pretzels .205.000 pretzels .356.000 pretzels .20The estimated demand for pretzels at the next home football game using a d

A. ,000 pretzels

B. ,400 pretzels

C.

D. ,000 pretzels

View answer

Correct Answer: C

Question #40

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. t is expensive to do the inspections at the end of the process

B. t is not possible to rework defective items

C. t is not 100% effective

D. t does not focus on improving the entire production process

View answer

Correct Answer: D

Question #41

An increase in excise taxes will generate elastic.

A. ption A

B. ption B

C. ption C

D. ption D

View answer

Correct Answer: B

Question #42

A benefit of using computer-aided software engineering CASE) technology is that it can ensure that:

A. o obsolete data fields occur in files

B. sers become committed to new systems

C. ll programs are optimized for efficiency

D. ata integrity rules are applied consistently

View answer

Correct Answer: D

Question #43

Rejection of unauthorized modifications to application systems could be accomplished through the use of:

A. rogrammed checks

B. atch controls

C. mplementation controls

D. ne-for-one checking

View answer

Correct Answer: C

Question #44

Assume that the average collection period is 25 days. After the credit policy is well established, what is the expected average accounts receivable balance for the entity at any moment in time, assuming a 365-day year?

A. S $684

B. S $1,808

C. S $27,123

D. S $45,205

View answer

Correct Answer: D

Question #45

Which of the following are intermediaries between sellers and buyers?I). AgentII). BrokerIII). ConsigneeIV). Consumer

A. and II only

B. and III only

C. , II, and III only

D. , II, III, and Isl

View answer

Correct Answer: C

Question #46

What does the following scatter gram suggest?

A. ales revenue is inversely related to training costs

B. he training program is not effective

C. raining costs do not affect sales revenue

D. everal data points are incorrectly plotted

View answer

Correct Answer: C

Question #47

The value of retaining employees is determined by:

A. uman asset accounting

B. inancial accounting

C. ost accounting

D. uman resource planning

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Correct Answer: A

Question #48

Which of the following is a false statement about cost-based pricing?

A. ast-based price should cover casts and provide the desired return an investment

B. commonly used cost-plus pricing formula is to all a markup percentage to the total cost

C. ariable casts may not be used as the basis for casts

D. cost-plus price equals the cost plus a markup

View answer

Correct Answer: C

Question #49

Philip enterprises, distributor of compact disks(CDS),is developing its budgeted cost of goods sold for 1998.Philip has developed the following range of sales estimates and associated probabilities for the year:Philip's cost of goods sold averages 80% of sales. t hat is the expected value of Philip's 1998 budgeted cost of goods sold?

A. S $85,000

B. S $84,000

C. S $68,000

D. S $67,200

View answer

Correct Answer: D

Question #50

The estimated demand for pretzels at the next home football game using a deterministic approach based on the most likely outcome is:

A. ,000 pretzels

B. ,400 pretzels

C. ,000 pretzels

D. ,000 pretzels

View answer

Correct Answer: C

Question #51

Which of the following is a direct effect of imposing a protective tariff on an imported product?

A. ower domestic prices on the imported item

B. ower domestic consumption of the item

C. educed domestic production of the item

D. igher sales revenues for foreign producers of the item

View answer

Correct Answer: B

Question #52

The decision rule that selects the strategy with the highest utility payoff if the worst state of nature occurs is the

A. inimize regret rule

B. aximize utility rule

C. aximin rule

D. axi max rule

View answer

Correct Answer: C

Question #53

Correlation is a term frequently used in conjunction with regression analysis and is measured by the value of the coefficient of correlation, r. The best explanation of the value r is that it:

A. s always positive

B. nterprets variances in terms of the independent variable

C. anges in size from negative infinity to positive infinity

D. s a measure of the relative relationship between two variables

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Correct Answer: D

Question #54

Which of the following is an accepted example of electronic data interchange?

A. equest for an airline reservation by a travel agent

B. ithdrawal of cash from an automated teller by a bank's customer

C. ransfer of summary data from a local area network to a centralized mainframe

D. lacement of order entry transactions from a customer to its supplier

View answer

Correct Answer: D

Question #55

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 #56

An organization installed antivirus software on all its personal computers. The software was designed to prevent initial infections, stop replication attempts, detect infections after their occurrence, mark affected system components, and remove viruses from infected components. The major risk in relying on antivirus software is that antivirus software may:

A. ot detect certain viruses

B. ake software installation overly complex

C. nterfere with system operations

D. onsume too many system resources

View answer

Correct Answer: A

Question #57

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 #58

A manager discovers by chance that a newly hired employee has strong beliefs that are very different from the manager's and from those of most of the other employees. The manager's best course of action would be to:

A. acilitate the reassignment of the new hire as quickly as possible before this situation becomes disruptive

B. sk the rest of the team for their reaction and act according to the group consensus

C. ake no action unless the new hire's behavior is likely to cause harm to the organization

D. ry to counsel the new hire into more reasonable beliefs

View answer

Correct Answer: C

Question #59

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 #60

Sales representatives for a manufacturing company are reimbursed for 100 percent of their cellular telephone bills. Cellular telephone costs vary significantly from representative to representative and from month to month, complicating the budgeting and forecasting processes. Management has requested that the internal auditors develop a method for controlling these costs.Which of the following would most appropriately be included in the scope of the consulting project?

A. ontrol self-assessment involving sales representatives

B. enchmarking with other cellular telephone users

C. usiness process review of procurement and payables routines

D. erformance measurement and design of the budgeting and forecasting processes

View answer

Correct Answer: C

Question #61

Which of the following statements is false regarding the efficient and economical achievement of the organization's objectives?

A. conomical performance accomplishes objectives with minimal use of resources with no regard to risk exposure

B. fficient performance accomplishes objectives in a timely manner

C. conomical performance accomplishes objectives with minimal use of resources commensurate with the risk exposure

D. fficient performance accomplishes objectives in an accurate and economical manner

View answer

Correct Answer: A

Question #62

Governments most likely restrict trade in the long run to:I). Help foster new industries.II). Protect declining industries.III). Increase tax revenues.IV). Foster national security.

A. only

B. and II only

C. I and III only

D. , II, and IV only

View answer

Correct Answer: B

Question #63

The internal auditor of a bank has developed a multiple regression model that has been used for a number of years to estimate the amount of interest income from commercial loans. During the current year, the auditor applies the model and discovers that the r2 value has decreased dramatically, but the model otherwise seems to be working.Which of the following conclusions is justified by the change?

A. hanging to a cross-sectional regression analysis should cause r2to increase

B. egression analysis is no longer an appropriate technique to estimate interest income

C. ome new factors not included in the model are causing interest income to change

D. linear regression analysis would increase the model's reliability

View answer

Correct Answer: C

Question #64

Assume that nominal interest rates just increased substantially but that the expected future dividends for an entity over the long run were not affected. As a result of the increase in nominal interest rates, the entity's share price should

A. ncrease

B. ecrease

C. tay constant

D. hange, but in no obvious direction_

View answer

Correct Answer: B

Question #65

The following steps make up the stages of a theory of constraints (TOC) analysis.I). Determine the most profitable product mix given the constraint.II). Increase capacity at the constraint.Ill). Identify the constraint.IV). Redesign the manufacturing process.V). Maximize the flow through the constraint.If executed in the correct order, the sequence is

A. II)

B. II)

C. II)

D. II)

View answer

Correct Answer: D

Question #66

The marketing department of a company is deciding on the price to charge for a key product. In setting this price, marketing needs to consider the price that a major competitor will charge for a similar product because the competitor's price will affect the demand for the company's product. Similarly, in setting its price, the competitor will consider what the company will charge.What is an appropriate mathematical technique for analyzing such a decision?

A. ame theory

B. robability theory

C. inear programming

D. ensitivity analysis

View answer

Correct Answer: A

Question #67

What is the annual carrying cost, stated as a percentage of investment in inventory, that would be used in model?

A. 2%

B. 7%

C. 4%

D. 2%

View answer

Correct Answer: A

Question #68

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 #69

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 #70

During the recessionary phase of a business cycle,

A. he purchasing power of money is likely to decline rapidly

B. he natural rate of unemployment will increase dramatically

C. otential national income will e-

D. ctual national income will e- 'c l potential national income

View answer

Correct Answer: C

Question #71

Because the VAN did not provide the internal auditor with access to its system, that portion of the engagement work program was not completed.Which one of the following should not be done by the internal auditor?

A. nclude the scope limitation in the final engagement communication

B. ewrite the work program to eliminate the step

C. btain the approval of the chief audit executive

D. ocument the VAN's actions in the working papers

View answer

Correct Answer: B

Question #72

If A has 60 ordinary shares outstanding, it has a book value per share of approximately.

A. S $1

B. S $2

C. S $4

D. S $5

View answer

Correct Answer: C

Question #73

Total quality management (TQM) in a manufacturing environment is best exemplified by:

A. dentifying and reworking production defects before sale

B. esigning the product to minimize defects

C. erforming inspections to isolate defects as early as possible

D. aking machine adjustments periodically to reduce defects

View answer

Correct Answer: B

Question #74

What is the incremental cost of placing an order that would be used in the EOO model?

A. S $48

B. S $35

C. S $24

D. S $19

View answer

Correct Answer: D

Question #75

A company has several departments that conduct technical studies and prepare reports for clients. Recently, there have been long delays in having these reports copied at the company's centralized copy center because of the dramatic increase in business. Management is considering decentralizing copy services to reduce the turnaround and provide clients with timely reports. An appropriate technique for minimizing turnaround time and the cost of providing copy services is:

A. ueuing theory

B. inear programming

C. egression analysis

D. ame theory

View answer

Correct Answer: A

Question #76

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 #77

In which of the following organizational structures does total quality management TOM) work best?

A. ierarchal

B. eams of people from the same specialty

C. eams of people from different specialties

D. pecialists working individually

View answer

Correct Answer: C

Question #78

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 #79

During disaster recovery planning, the organization established a recovery point objective. Which ofthe following best describes this concept?

A. he maximum tolerable downtime after the occurrence of an incident

B. he maximum tolerable data loss after the occurrence of an incident

C. he maximum tolerable risk related to the occurrence of an incident

D. he minimum recovery resources needed after the occurrence of an incident

View answer

Correct Answer: B

Question #80

A disadvantage of separating performance evaluations from compensation-increase decisions is that:

A. ot enough emphasis is placed on short-run performance

B. inancial rewards may lose their motivational effect

C. mployees may not be motivated by good appraisals

D. he employee's performance evaluation does not consider the financial status of the company overall

View answer

Correct Answer: C

Question #81

A control feature designed to negate the use of utility programs to read files that contain all authorized access user codes for the network is:

A. nternally encrypted passwords

B. password hierarchy

C. ogon passwords

D. peer-to-peer network

View answer

Correct Answer: A

Question #82

An enterprise-wide resource planning ERP) system integrates the organization's computerized subsystems and may also provide links to external parties. An advantage of ERP is that:

A. he reengineering needed for its implementation should improve business processes

B. ustomizing the software to suit the unique needs of the organization will facilitate upgrades

C. t can be installed by organizations of all sizes

D. he comprehensiveness of the system reduces resistance to change

View answer

Correct Answer: A

Question #83

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 #84

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 #85

A principal advantage of an ERP system is:

A. rogram-data dependence

B. ata redundancy

C. eparate data updating for different functions

D. entralization of data

View answer

Correct Answer: D

Question #86

If an entity has outstanding bonds with a sinking fund provision and if interest rates have since the bonds were issued, the entity would realize a savings in meeting its sinking fund obligations by .

A. ption A

B. ption B

C. ption C

D. ption D

View answer

Correct Answer: A

Question #87

If a high percentage of an entity's total costs is fixed, the entity's operating leverage will be:

A. igh

B. ow

C. nchangedD Unable to be determined

View answer

Correct Answer: A

Question #88

An entity obtaining short-term financing with trade credit will pay a higher percentage financing cost, everything else being equal, when the:

A. iscount percentage is lower

B. tems purchased have a higher price

C. tems purchased have a lower price

D. upplier offers a longer discount period

View answer

Correct Answer: D

Question #89

Assume that each day an entity writes and receives checks totaling US $10,000. If it takes5 days for the checks to clear and be deducted from the entity's account and only 4 days for the deposits to clear, what is the float?

A. S $10,000

B. S TO

C. S $(10,000)

D. S $50,000

View answer

Correct Answer: A

Question #90

Assigning passwords to computer users is a control to prevent unauthorized access. Because a password does not conclusively identify a specific individual, it must be safeguarded from theft. A method used to protect passwords is to

A. equire that they be displayed on computer screens but not printed on hard copy output

B. et maximum character lengths

C. equire passwords to be changed periodically

D. liminate all records of old passwords

View answer

Correct Answer: C

Question #91

Heniser Pet Foods manufactures two products. X and Y. The unit contribution margins for Products X and Y are US $30 and US $50, respectively. Each product uses Materials A and B. Product X uses 6 pounds of Material A and 12 pounds of Material B. Product Y uses 12 pounds of Material A and 8 pounds of Material B. The company can purchase only 1,200 pounds of Material A and 1,760 pounds of Material B. The optimal mix of products to manufacture is:

A. 46 units of X and 0 units of Y

B. units of X and 100 units of Y

C. 20 units of X and 40 units of Y

D. 0 units of X and 120 units of Y

View answer

Correct Answer: C

Question #92

Which of the following is a false statement about XBRL?

A. BRL is freely licensed

B. BRL facilitates the automatic exchange of information

C. BRL is used primarily in the U

D. BRL is designed to work with a variety of software applications

View answer

Correct Answer: C

Question #93

In computing the loss per share of ordinary shares, cumulative preference dividends not earned should be:

A. educted from the loss for the year

B. dded to the loss for the year

C. educted from income in the year paid

D. dded to income in the year paid

View answer

Correct Answer: B

Question #94

What ensures that an entity is complying with the documented quality management system (QMS) procedures and ISO 9000 standards?

A. n internal audit system

B. he registrar

C. nsite inspections by an external auditor

D. anagement commitment

View answer

Correct Answer: A

Question #95

For the year just ended, the entity had a rate of return on equity, rounded to two decimals, of:

A. 1

B. 8

C. 7

D. 1

View answer

Correct Answer: A

Question #96

In a review of an EDI application using a third-party service provider, the auditor should:I). Ensure encryption keys meet ISO standardsII). Determine whether an independent review of the service provider's operation has been conducted.III). Verify that only public-switched data networks are used by the service providerIV). Verify that the service provider's contracts include necessary clauses, such as the right to audit

A. and ll

B. and IV

C. I and III

D. I and IV

View answer

Correct Answer: D

Question #97

In general, mainframe or server production programs and data are adequately protected against unauthorized access. Certain utility software may, however, have privileged access to software and data. To compensate for the risk of unauthorized use of privileged software, IT management can:

A. revent privileged sotto are from being installed on the mainframe

B. estrict privileged access to test versions of applications

C. imit the use of privileged software

D. eep sensitive programs and data on an isolated machine

View answer

Correct Answer: C

Question #98

Which of the following provides the best justification for reducing trade barriers among nations?

A. he military self-sufficiency argument

B. iversification for stability argument

C. he infant industry argument

D. ncreased total world output argument

View answer

Correct Answer: D

Question #99

Which of the following would Batchelder most likely use as a record count?

A.

B.

C. 10

D. 00

View answer

Correct Answer: B

Question #100

Which of the following is the best program for the protection of a company's vital information resources from computer viruses?

A. tringent corporate hiring policies for staff working with computerized functions_

B. xistence of a software program for virus prevention

C. rudent management policies and procedures instituted in conjunction with technological safeguards

D. hysical protection devices in use for hardware, software, and library facilities

View answer

Correct Answer: C

Question #101

Which of the following is an indication that a computer virus is present?

A. requent power surges that harm computer equipment

B. nexplainable losses of or changes to data

C. nadequate backup, recovery, and contingency plans

D. umerous copyright violations due to unauthorized use of purchased software

View answer

Correct Answer: B

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