IAA CIA Part 3 Simulation Tests, Certified Internal Auditor

Question #1

Using a telecommunications provider affects in-house networks. To prepare for changes resulting from enhanced external network services, management should

A. ptimize in-house networks to avoid bottlenecks that would limit the benefits offered by the telecommunications provider

B. lan for rapid implementation of new capabilities in anticipation of ready acceptance of the new technology

C. ownsize the company's disaster recovery plan to recognize the increasing role of the telecommunications provider

D. nhance the in-house network management to minimize dependence on the telecommunications provider for network management

View answer

Correct Answer: A

Question #2

Quality cost indices are often used to measure and analyze the cost of maintaining or improving the level of quality. Such indices are computed by dividing the total cost of quality over a given period by some measure of activity during that period for example, sales dollars). The following cost data are available for a company for the month of March. The company's quality cost index is calculated using total cost of quality divided by sales dollars.Sales US $400,000Direct materials cost 100,000Direct labor

A.

B.

C. 2

D.

View answer

Correct Answer: A

Question #3

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

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Correct Answer: A

Question #4

Which of the following security controls might prevent unauthorized access to sensitive data via an unattended workstation directly connected to a mainframe?

A. se of a screen saver

B. se of passwords to identify users

C. ncryption of data files

D. utomatic log-off of inactive users

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Correct Answer: D

Question #5

Effective internal control for application development should provide for which of the following?I). A project steering committee to initiate and oversee the systemII). A technical systems programmer to evaluate systems softwareIII). Feasibility studies to evaluate existing systemsIV). The establishment of standards for systems design and programming

A. and Ill only

B. , II, and IV only

C. , Ill, and IV only

D. I, Ill, and IV only

View answer

Correct Answer: C

Question #6

An entity has a high fixed-assets turnover ratio.What conclusion can a financial analyst draw from this?

A. he entity may be overcapitalized

B. he entity may have a problem with employees converting inventory to personal use

C. he entity may be undercapitalized

D. he entity has favorable profitability

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Correct Answer: C

Question #7

All of the following are alternative marketable securities suitable for investment except:

A.

B. urodollars

C. ommercial paper

D. onvertible bonds

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Correct Answer: D

Question #8

A learning curve of 80% assumes that the incremental unit time is reduced by 20% for each doubling of output. Also, direct labor cost is proportionate to time worked.What is the incremental direct labor cost of the 16th unit produced as an approximate percentage of the first unit produced?

A. 1%

B. 1%

C. 1%

D. 4%

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Correct Answer: A

Question #9

During the past few gears, Wilder Company has experienced the following average number of power outages:Each power outage results in out-of-pocket costs of U $300. For U $1,000 per month, At US$800 can lease 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. $ 15,200)

B. S $ 1,267)

C. $3,200

D. $7,200

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Correct Answer: C

Question #10

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

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Correct Answer: D

Question #11

Which of the following networks provides the least secure means of data transmission?

A. alue-added

B. ublic-switched

C. ocal area

D. rivate

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Correct Answer: B

Question #12

An employee in the receiving department keyed in a shipment to the accounts payable system and inadvertently omitted the purchase order number. The best systems control to detect this error is:

A. ompleteness test

B. equence check

C. easonableness test

D. ompatibility test

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Correct Answer: A

Question #13

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 #14

An internal auditor was performing an operational audit of the purchasing and accounts payable system. The audit objective was to identify changes in processes that would improve efficiency and effectiveness.Which of the following statements support the auditor's recommendation that electronic data interchange EDI) be implemented within a company?I). There is a small number of transactions.II). There is a time-sensitive just-in-time purchase environment.III). There is a large volume of custom purchases.IV).

A. only

B. I and IV only

C. and Ill

D. I, Ill, and IV

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Correct Answer: B

Question #15

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

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Correct Answer: C

Question #16

Data regarding four different products manufactured by an organization are presented as follows. Direct material and direct labor are readily available from the respective resource markets.However, the manufacturer is limited to a maximum of 3,000 machine hours per month.Units Produced per Machine Hour: A: 3 B: 4 C: 2 D: 3The product that is the most profitable for the manufacturer in this situation is

A. roduct A

B. roduct B

C. roduct C

D. roduct D

View answer

Correct Answer: B

Question #17

A contract dispute has arisen between an organization and a major supplier. To resolve the dispute, the most competent evidence is:

A. ral testimony of contracting parties

B. he original contract

C. ctions by parties to the contract

D. letter from the supplier's attorney

View answer

Correct Answer: B

Question #18

Which of the following are critical risk and control issues that an internal auditor must address?I). Rapid technology changesII). Maintenance of transaction integrityIII). Website content review and approvalIV). Changes to organizational structures

A. and II only

B. and III only

C. I and III only

D. , II, Ill, and IV

View answer

Correct Answer: D

Question #19

Quality cost indices are often used to measure and analyze the cost of maintaining or improving the level of quality. Such indices are computed by dividing the total cost of quality over a given period by some measure of activity during that period for example, sales dollars). The following cost data are available for a company for the month of March. The company's quality cost index is calculated using total cost of quality divided by sales dollars.Sales US $400,000Direct materials cost 100,000Direct labor

A.

B.

C. 2

D.

View answer

Correct Answer: A

Question #20

If the exchange rate has changed from 1 local currency unit LCU) to 5 foreign currency unitsFCUs) to a rate of 1 LCU to 5.5 FCUs,

A. he LCU has appreciated by 10%

B. he LCU has depreciated by 10%

C. he FCU has appreciated by 20%

D. he FCU has depreciated by 20%

View answer

Correct Answer: A

Question #21

A small company has changed from a system of recording time worked on clock cards to a computerized payroll system in which employees record time in and out with magnetic cards. The computer system automatically updates all payroll records. Because of this change,

A. generalized computer audit program must be used

B. art of the audit trail is altered

C. he potential for payroll-related fraud is diminished

View answer

Correct Answer: B

Question #22

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

View answer

Correct Answer: C

Question #23

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 #24

Which of the following is a major element of the ISO 9000:2008 quality management system standards?

A. he principle that improved employee satisfaction will lead to increased productivity

B. he attitude and actions of the board and management regarding the significance of control within the organization

C. he assessment of the risk that objectives are not achieved

D. requirement for organizations to monitor information on customer satisfaction as a measure of performance

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Correct Answer: D

Question #25

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 #26

Preventing someone with sufficient technical skill from circumventing security procedures and making changes to production programs is best accomplished by:

A. eviewing reports of jobs completed

B. omparing production programs with independently controlled copies

C. unning test data periodically

D. roviding suitable segregation of duties

View answer

Correct Answer: D

Question #27

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 #28

A major benefit of computer integrated manufacturing CIM) is:

A. ncreased amount of scrap available for resale

B. ncreased working capital

C. elivery of customized products with long lead times

D. ncreased flexibility

View answer

Correct Answer: D

Question #29

Quality cost indices are often used to measure and analyze the cost of maintaining or improving the level of quality. Such indices are computed by dividing the total cost of quality over a given period by some measure of activity during that period (for example, sales dollars). The following cost data are available for a company for the month of March. The company's quality cost index is calculated using total cost of quality divided by sales dollars.The quality cost index for March is:

A.

B.

C. 2

D.

View answer

Correct Answer: A

Question #30

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 #31

The four categories of costs associated with product quality costs are:

A. xternal failure, internal failure, prevention, and carrying

B. xternal failure, internal failure, prevention, and appraisal

C. xternal failure, internal failure, training, and appraisal

D. arranty, product liability, training, and appraisal

View answer

Correct Answer: B

Question #32

CORRECT TEXTSimulation, a widely used technique in decision modeling, is a(n):

A. rocess of modeling whereby real activities are represented in mathematical or other form

B. echnique used to pinpoint random deviations in industrial processes and other repetitive operations

C. echnique used to separate costs into fixed and variable portions

D. nventory management model that is used to calculate the optimum order quantity

View answer

Correct Answer: A

Question #33

A bank was considering its first use of computer-aided software engineering CASE) to develop an inquiry system for account representatives to access consolidated profiles of customers' accounts.A benefit of using CASE in this situation is that:

A. o new software development tools would be needed

B. o training of programmers would be required

C. anagement of the development process would be improved

D. he need for testing would be reduced

View answer

Correct Answer: C

Question #34

Using the information collected, the organization should focus on:

A. he total number of personal computer complaints that occurred

B. he number of computer complaints associated with CD-ROM problems and new software usage

C. he number of computer complaints associated with the lack of user knowledge and hardware problems

D. he cost to alleviate all computer complaints

View answer

Correct Answer: C

Question #35

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 #36

What would be the effect of a lower tax rate on the ending balance of ordinary shares and on dividends said for the year?

A. ption A

B. ption B

C. ption C

D. ption D

View answer

Correct Answer: C

Question #37

If a series of profit lines for X and Y are drawn on the graph, the mix of X 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 point on 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 #38

Buyer-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 #39

A decision not to participate in e-commerce should be carefully analyzed, documented, and approved by whom?

A. he chief audit executive

B. he chief executive officer

C. he governing board

D. he audit committee

View answer

Correct Answer: C

Question #40

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

View answer

Correct Answer: B

Question #41

Which of the following operating procedures increases an organization's exposure to computer viruses?

A. ncryption of data files

B. requent backup of files

C. ownloading public-domain software from websites

D. nstalling original copies of purchased software on hard disk drives

View answer

Correct Answer: C

Question #42

The most important component of quality control is:

A. nsuring goods and services conform to the design specifications

B. atisfying upper management

C. onforming with ISO-9000 specifications

D. etermining the appropriate timing of inspections

View answer

Correct Answer: A

Question #43

Which of the following questions is best associated with the safeguards and controls risk element?

A. hat could happen that would adversely affect the organization's ability to achieve its objectives and execute its strategies?

B. hat can be done to prevent and avoid, mitigate, and detect risks and provide notification?

C. hat is the potential financial impact of the occurrence of an uncertain event?

D. ow often might an uncertain event occur?

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Correct Answer: B

Question #44

The data below were gathered on two different machine centers and two products.Which item below would be part of a linear programming formulation of this problem?

A. aximize: Contribution 4A + 5B

B. ubject to: A 0

C. ubject to: 2

D. ubject to: 4A + 5B130

View answer

Correct Answer: C

Question #45

To ensure privacy in a public key encryption system, knowledge of which of the following keys would be required to decode the received message?I). PrivateII). Public

A.

B. I

C. oth l and ll

D. either I nor II

View answer

Correct Answer: A

Question #46

The graph depicts the domestic supply of and demand for a product that is also sold in the domestic market by foreign producers. The domestic producers are protected by a tariff of the amount Pt minus Pw. Bt is the domestic price including the tariff, and Rw is the world price for the product. The effect of the tariff is to:

A. educe the domestic price from ORw to ORt

B. educe foreign sales in the domestic market from ac to bc

C. ncrease domestic production from Ob to Cc

D. ncrease domestic production from Oa to Ob

View answer

Correct Answer: D

Question #47

Which of the follov5ring is used in determining the economic order quantity ECQ)?

A. egression analysis

B. alculus

C. arkov process

D. ueuing theory

View answer

Correct Answer: B

Question #48

If all else is equal, entities with higher profit margins require less additional financing for any sales growth rate. If the profit marlin of an entity increased, the funds-needed line would shift:

A. p and become less steep

B. p and become more steep

C. own and become less steep

D. own and become more steep

View answer

Correct Answer: C

Question #49

An entity has daily rash receipts of US $300,000 and is interested in acquiring a lockbox service in order to reduce collection time Bank 1's lockbox service cost US $3,000 per month and will reduces collection time by 3 days. Bank 2's lockbox service costs US $5000 per month and will reduce collection time by 4 days. Bank 3's lockbox service cost US $500 per month and will reduce collection time by 4 days. Bank 2's lockbox service costs US $500 per month and will reduce collection time by 4 days. Bank 3's

A. ank 1

B. ank 2

C. ank 3

D. ank 4

View answer

Correct Answer: D

Question #50

Which of the following is not one of the seven elements of risk?

A. requency

B. iming

C. OI analysis

D. ncertainty

View answer

Correct Answer: B

Question #51

The feasible solution region is bounded by the lines connecting points:

A. , 4, 6, and 7

B. , 5, 6, and 8

C. , 4, 5 6, and 8

D. , 5, 6, and 7

View answer

Correct Answer: A

Question #52

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 #53

Which of the following risks is more likely to be encountered in an end-user computing EUC) environment as compared with a centralized environment?

A. nability to afford adequate uninterruptible power supply systems

B. ser input screens without a graphical user interface GUI)

C. pplications that are difficult to integrate with other information systems

D. ack of adequate utility programs

View answer

Correct Answer: C

Question #54

The average collection period for an entity measures the number of days:

A. fter a typical credit sale is made until the entity receives the payment

B. or a typical check to "clear" through the banking system

C. eyond the end of the credit period before a typical customer payment is received

D. efore a typical account becomes delinquent

View answer

Correct Answer: A

Question #55

The four categories of costs associated with product quality costs are:

A. xternal failure, internal failure, prevention, and carrying

B. xternal failure, internal failure, prevention, and appraisal

C. xternal failure, internal failure, training, and appraisal

D. arranty, product liability, training, and appraisal

View answer

Correct Answer: B

Question #56

Managerial performance may be measured in many ways. For example, an internal nonfinancial measure is:

A. arket share

B. elivery performance

C. ustomer satisfaction

D. anufacturing lead time

View answer

Correct Answer: D

Question #57

One drawback of business process reengineenng (BPR), sometimes referred to as business process analysis, is:

A. mproved efficiency in the business processes analyzed

B. xcess of cost over the benefit

C. eduction of operational efficiency

D. mployee resistance to change

View answer

Correct Answer: D

Question #58

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 #59

The appropriate discount rate to use in valuing a business combination is the:

A. ombined entity's cost of debt

B. cquirer's weighted average cost of capital

C. cquirer's cost of equity

D. ombined entity's cost of equity

View answer

Correct Answer: D

Question #60

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

A. oining

B. erging

C. rojecting

D. ointing

View answer

Correct Answer: A

Question #61

Which of the following is not one of the seven elements of risk?

A. requency

B. iming

C. OI analysis

D. ncertainty

View answer

Correct Answer: B

Question #62

If a system does not have a mainframe computer or a file server but does processing within a series of personal computers, the network is a(n):

A. ffline processing system

B. xpert system

C. irect access system

D. eer-to-peer system

View answer

Correct Answer: D

Question #63

Systems development audit engagements include reviews at various points to ensure that development is properly controlled and managed. The reviews should include all of the following except:

A. onducting a technical feasibility study on the available hardware

B. xamining the level of user involvement at each stage of implementation

C. erifying the use of controls and quality assurance techniques for program development, conversion, and testing

D. etermining if system, user, and operations documentation conforms to formal standards

View answer

Correct Answer: A

Question #64

If RCF does not maintain a safety stock, the estimated total carrying costs for the computer chairs for the coming year based on their current schedule is:

A. S $4,000

B. S $5,000

C. S $6,250

D. S $12,500

View answer

Correct Answer: C

Question #65

The following information and diagram apply to a project:The earliest completion time for the project is:

A. 1 days

B. 4 days

C. 5 days

D. 0 days

View answer

Correct Answer: C

Question #66

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 #67

The costs of quality that are incurred in detecting units of product that do not conform to product specifications are referred to as:

A. reventive costs

B. ppraisal costs

C. nternal failure costs

D. xternal failure costs

View answer

Correct Answer: B

Question #68

An entity produces a country A and sells some of its output in country B. Selling prices are identical in the two countries. The corporate tax rates are 40% in country A and 20% in country B. Assuming that the entity does not increase or decrease production, it should sales in country B and set as a transfer price as possible, in order to minimize global taxes.

A. ption A

B. ption B

C. ption C

D. ption D

View answer

Correct Answer: B

Question #69

What would be the effect of a lower tax rate on the ending balance of ordinary shares and on dividends said for the year?

A. ption A

B. ption B

C. ption C

D. ption D

View answer

Correct Answer: C

Question #70

General sales taxes tend to be regressive with respect to income because:

A. larger portion of a lower income person's income is subject to the tax

B. smaller portion of a lower income person's income is subject to the tax

C. he tax rate is higher for person with lower income

D. he tax claims an increasing amount of income as income rises

View answer

Correct Answer: A

Question #71

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 #72

Why have many European Union countries not adopted ISO 14000 standards?

A. dhering to ISO 14000 standards will not reduce monitoring and inspection by regulatory agencies

B. ndividual European Union countries' standards are typically more strict than ISO 14000 standards

C. egulators are permitted to use voluntary audits as a basis for punitive action

D. SO 14000 standards will not make it easier to do business across borders

View answer

Correct Answer: B

Question #73

Questions about which of the following can legally be asked in recruiting interviews?

A. ge

B. umber of children

C. ind of military discharge

D. riminal record but only for security clearance purposes)

View answer

Correct Answer: D

Question #74

Which line segment represents the length of time to consume the total quantity of materials ordered?

A. E

B. C

C.

D. E

View answer

Correct Answer: C

Question #75

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 #76

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 #77

A short-term bank loan will have a higher effective financing cost if it has which combination of characteristics?

A. 10% compensating balance and regular interest

B. 10% compensating balance and discount interest

C. 20% compensating balance and regular interest

D. 20% compensating balance and discount interest

View answer

Correct Answer: D

Question #78

If RCF does not maintain a safety stock, the estimated total carrying costs for the computer chairs for the coming year based on their current schedule is:

A. S $4,000

B. S $5,000

C. S $6,250

D. S $12,500

View answer

Correct Answer: C

Question #79

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 #80

Why have many European Union countries not adopted ISO 14000 environmental standards?

A. ollowing ISO 14000 standards will not reduce monitoring and inspection by regulatory agencies

B. ndividual European Union countries' standards are typically more strict than ISO 14000 standards

C. egulators are permitted to use voluntary audits as a basis for punitive action

D. SO 14000 standards will not make it easier to do business across borders

View answer

Correct Answer: B

Question #81

An account executive has just designed a Monte Carlo model to estimate the costs of a particular type of project. Validating the model could include all except:

A. hecking for errors in the computer programming

B. hecking that assumed probability distributions are reasonable

C. omparing test results with previously validated models

D. pplying the model

View answer

Correct Answer: D

Question #82

The primary reason for adopting TOM was to achieve:

A. reater customer satisfaction

B. educed delivery time

C. educed delivery charges

D. reater employee participation

View answer

Correct Answer: A

Question #83

Your company' has decided to enter the European market with one of its products and is now considering three advertising strategies. This market currently belongs to Company X. Company X is mare that your company is entering the market and is itself considering steps to protect its market. An analyst for your company has identified three strategies Company X might develop and has shown the payoffs for each in the tables below.The analyst has formulated this:

A. ero-sum game

B. ooperative game

C. risoner's dilemma

D. ame against nature

View answer

Correct Answer: A

Question #84

Spoofing is one type of online activity used to launch malicious attacks. Spoofing is:

A. rying large numbers of letter and number combinations to access a network

B. aves dropping on information sent by a user to the host computer of a website

C. ccessing packets flowing through a network

D. dentity misrepresentation in cyberspace

View answer

Correct Answer: D

Question #85

According to eSAC, accountability is:

A. sually an issue with regard to trade secrets and other intellectual property

B. he control attribute that identifies the source of a transaction

C. he restriction of access to processing and storage devices

D. ost often applicable to personal information about employees and customers

View answer

Correct Answer: B

Question #86

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 #87

What are revenue tariffs designed to do?

A. evelop new export opportunities

B. rovide the government with tax revenues

C. estrict the amount of a commodity that can be imported in a given period

D. ncourage foreign companies to limit the amount of their exports to a particular country

View answer

Correct Answer: B

Question #88

Which line segment represents the reorder lead time?

A. B

B. E

C. F

D. C

View answer

Correct Answer: D

Question #89

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 #90

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

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Correct Answer: C

Question #91

How is the letter x in the standard regression equation best described?

A. ndependent variable

B. ependent variable

C. intercept

D. oefficient of determination

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Correct Answer: A

Question #92

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

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Correct Answer: A

Question #93

The best plan for responding to quickly changing information requirements is to foster:

A. reater online access to information systems

B. ompetitive pressures for enhanced functions in systems

C. loser linkage between organizational strategy and information

D. ore widespread use of automated controls

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Correct Answer: C

Question #94

Capital structure decisions involve determining the proportions of financing from:

A. hort-term or long-term debt

B. ebt or equity

C. hort-term or long-term assets

D. etained earnings or ordinary stock

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Correct Answer: B

Question #95

The internal auditor of a bank has developed a multiple regression model which has been used for a number of gears 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 okay.Which of the following conclusions is justified by the change?

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

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Correct Answer: C

Question #96

When faced with the problem of filling a newly created or recently vacated executive position, organizations must decide whether to promote from within or to hire an outsider.One of the disadvantages of promoting from within is that:

A. nternal promotions can have negative motivational effect on the employees of the firm

B. nternal promotions are more expensive to the organization than hiring an outsider

C. t is difficult to identify proven performers among internal candidates

D. iring an insider leads to the possibility of social inbreeding within the firm

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Correct Answer: D

Question #97

Which of the following controls most likely could prevent computer personnel from modifying programs to bypass programmed controls?

A. eriodic management review of computer utilization reports and systems documentation

B. egregation of duties within computer for computer programming and computer operations

C. articipation of user department personnel in designing and approving new systems

D. hysical security of computer facilities in limiting access to computer equipment

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Correct Answer: B

Question #98

Which of the following would not be appropriate to consider in the physical design of a data center?

A. valuation of potential risks from railroad lines and highways

B. se of biometric access systems

C. esign of authorization tables for operating system access

D. nclusion of an uninterruptible power supply system and surge protection

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Correct Answer: C

Question #99

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

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Correct Answer: D

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