IIA CIA Part 3 Exam Sample Questions, Certified Internal Auditor

Question #1

The best source of evidence to determine if ex-employees continue to have access to a company's computer systems is:

A. iscussing the password removal process with the information security officer

B. eviewing computer logs of access attempts

C. econciling current payroll lists with database access lists

D. eviewing access control software to determine whether the most current version is implemented

View answer

Correct Answer: C

Question #2

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 #3

As of week 8, the Gantt chart shows that the project is:

A. omplete

B. head of schedule

C. n schedule

D. ehind schedule

View answer

Correct Answer: B

Question #4

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

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Correct Answer: C

Question #5

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

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Correct Answer: A

Question #6

Setting the introductory price of a new product relatively high is:

A. arket-based pricing

B. rice skimming

C. enetration pricing

D. ricing by intermediaries

View answer

Correct Answer: B

Question #7

An entity in a 40% tax bracket needs of operating income to pay 1 of interest and of pretax income to pay 1 of dividends.

A. ption A

B. ption B

C. ption C

D. ption D

View answer

Correct Answer: C

Question #8

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 #9

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 #10

Which of the following is the method of adding a standard markup to the cast of the product?

A. enetration pricing

B. oing-rate pricing

C. ost-based pricing

D. rice skimming

View answer

Correct Answer: C

Question #11

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 #12

Setting the introductory price of a new product relatively high is:

A. arket-based pricing

B. rice skimming

C. enetration pricing

D. ricing by intermediaries

View answer

Correct Answer: B

Question #13

If the bank uses the minimax regret criterion for selecting the location of the branch, it will select.

A. 1

B. 2

C. 3

D. 4

View answer

Correct Answer: B

Question #14

A bank is designing an on-the-job training program for its branch managers. The bank would like to design the program so that participants can complete it as quickly as possible. The training program requires that certain activities be completed before others. For example, a participant cannot make credit loan decisions without first having obtained experience in the loan department. An appropriate scheduling technique for this training program is:

A. ERT/CPM

B. inear programming

C. ueuing theory

D. ensitivity analysis

View answer

Correct Answer: A

Question #15

A total interruption of processing throughout a distributed information technology system can be minimized through the use of:

A. xception reporting

B. ault tolerant

C. ackup and recovery

D. ata file security

View answer

Correct Answer: B

Question #16

The US dollar amount of the costs of quality classified as preventive costs for the manufacturing firm would be:

A. S $643,000

B. S $701,000

C. S $736,000

D. S $768,000

View answer

Correct Answer: B

Question #17

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.

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Correct Answer: A

Question #18

CORRECT TEXTA has a times-interest-earned ratio of:

A. our times

B. ive times

C. 0 times

D. 5 times

View answer

Correct Answer: B

Question #19

An advantage of using bar codes rather than other means of identification of parts used by a manufacturer is that:

A. he movement of all parts is controlled

B. he movement of parts is easily and quickly recorded

C. endors can use the same part numbers

D. endors use the same identification methods

View answer

Correct Answer: B

Question #20

An entity has daily cash receipts of US $100,000 and collection time of 2 days. A bank has offered to reduce the collection time on the entity's deposits by 2 days for a monthly fee of US $500. If money market rates are expected to average 6% during the year, the net annual benefit loss) from having this service is:

A. S $3,000

B. S $12,000

C. S $0

D. S $6,000

View answer

Correct Answer: D

Question #21

The moving-average method of forecasting:

A. s a cross-sectional forecasting method

B. egresses the variable of interest on a related variable to develop a forecast

C. erives final forecasts by adjusting the initial forecast based on the smoothing constant

D. ncludes each new observation in the average as it becomes available and discards the oldest observation

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Correct Answer: D

Question #22

One of the main reasons that implementation of a total quality management program works better through the use of teams is:

A. eams are more efficient and help an organization reduce its staffing

B. mployee motivation is always higher for team members than for individual contributors

C. eams are a natural vehicle for sharing ideas, which leads to process improvement

D. he use of teams eliminates the need for supervision, thereby allowing a company to reduce staffing

View answer

Correct Answer: C

Question #23

In the Gantt chart below, shaded bars represent completed portions of activities, bars depicted with broken lines represent uncompleted portions, and blank bars represent activities notyet begun.As of week 8, the Gantt chart shows that the project is:

A. omplete

B. head of schedule

C. n schedule

D. ehind schedule

View answer

Correct Answer: C

Question #24

Which of the following financial instruments can be traded in international money markets?

A. ortgages

B. reference shares

C.

D.

View answer

Correct Answer: C

Question #25

Which of the following financial instruments can be traded in international money markets?

A. ortgages

B. reference shares

C.

D.

View answer

Correct Answer: C

Question #26

A company that wishes to improve its rate of retention of its experienced employees might:

A. bolish its hire-from-within policy

B. mprove its fringe benefit package

C. nitiate job simplification programs

D. et a mandatory retirement age

View answer

Correct Answer: B

Question #27

An automobile and personal property insurer has decentralized its information processing to the extent that headquarters has less processing capacity than any of its regional processing centers. These centers are responsible for initiating policies, communicating with policyholders, and adjusting claims. The company uses leased lines from a national telecommunications company. Initially, the company thought there would be little need for interregional communication, but that has not been the case. The compa

A. ack of awareness at headquarters of the state of processing

B. ncreased cost and complexity of network traffic

C. nterference of the mirrored data with original source data

D. onfusion on the part of insurance agents about where customer data are stored

View answer

Correct Answer: B

Question #28

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

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Correct Answer: D

Question #29

What risk element is management seeking to identify by asking the following question:What could happen that would adversely affect the organization's ability to achieve its objectives and execute its strategies?

A. ingle loss exposure value

B. afeguards and controls

C. hreat events

D. requency

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Correct Answer: C

Question #30

The effect of just-in-time production approaches:

A. educes the dependency on suppliers

B. educes the cost of implementing strategies

C. ecreases production facility flexibility

D. ncreases the need for a dependable workforce

View answer

Correct Answer: B

Question #31

Company A is a retailer operating in several cities. The individual store managers deposit daily collections at a local bank in a non-interest bearing checking account. Twice per week, the local bank issues a depository transfer check DTC) to the central bank at headquarters. The controller of the company is considering using a wire transfer instead.The additional cost of each transfer would be US $25. collections would be accelerated by 2 days, and the annual interest rate paid by the central bank is 7.2%

A. t would never be economically feasible

B. S $125,000 or above

C. ny amount greater than US $173

D. ny amount greater than US $62,500

View answer

Correct Answer: D

Question #32

An appropriate technique for planning and controlling manufacturing inventories, such as raw materials, components, and subassemblies whose demand depends on the level of production is:

A. aterials requirements planning

B. egression analysis

C. apital budgeting

D. inear programming

View answer

Correct Answer: A

Question #33

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 #34

A distribution channel moves goods from producers to customers. Suppose a channel has four producers, each serving the same four customers, and no middlemen. If a distributor is introduced, the number of contacts among producers, customers, and the distributor) in the channel will:

A. e unaffected

B. ecrease from 8 to 4

C. ncrease from 8 to 16

D. ecrease from 16 to 8

View answer

Correct Answer: D

Question #35

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 #36

Which of the following statements about desktop computers, servers, and mainframe computers is true?

A. esktop computers usually more than servers but less than mainframes

B. ecause of the increase, desktop computers, there will be little need for mainframes in the near future

C. ervers must be programmed directly in machine language while mainframes use higher-level language

D. he cost per transaction to process on each type of computer has decreased in recent years

View answer

Correct Answer: D

Question #37

To be more responsive to its customers, a bank wants a system that will permit account representatives to consolidate information about all the a-r-punts belonging to individual customers. Bank management is willing to experiment with different approach approaches because the requirements are evolving rapidly. The best development approach for this system is:

A. rototyping

B. ystem development life cycle model

C. tructured analysis and design technique

D. ierarchy-input-process-output

View answer

Correct Answer: A

Question #38

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 #39

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 #40

What is the percentage of the total variance that can be explained by the regression?

A. 9

B. 9

C. 0

D. 9

View answer

Correct Answer: A

Question #41

Listed below are selected line items from the cost-of-quality report for Company B for last month Category:What is Company B's total prevention and appraisal cost for last month?

A. S$786

B. S$1,154

C. S$1,940

D. S$2,665

View answer

Correct Answer: C

Question #42

When using PERT Program Evaluation Review Technique), the expected time for an activity when given an optimistic time A), a pessimistic time B), and a most likely time m) is calculated by which one of the following formulas?

A. \xad a) =2

B. + b) =2

C. + 4m +b) =6

D. abm) =6

View answer

Correct Answer: C

Question #43

An entity uses the following formula in determining its optimal level of cash.This formula is a modification of the economic order quantity EOQ formula used for inventory management. Assume that the set of selling marketable securities is US $10 per transaction and the interest rate on marketable securities is 6% per year. The entity estimates that it will make cash payments of US $12.000 over a one-month period.What is the average cash balance rounded to the nearest dollar)?

A. S $1,000

B. S $2,000

C. S $3,464

D. S $6,928

View answer

Correct Answer: C

Question #44

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 #45

If a company is customer-centered, its customers are defined as:

A. nly people external to the company who have purchased something from the company

B. nly people internal to the company who directly use its product

C. nyone external to the company and those internal who rely an its product to get their jab done

D. verybody external to the company who is currently doing, or may in the future do, business with the company

View answer

Correct Answer: C

Question #46

Which of the following costs of quality is a failure cost?

A. ystems development costs

B. osts of inspecting in-process items

C. ontract penalty for delivery of nonconforming goods

D. osts of quality circles

View answer

Correct Answer: C

Question #47

The auditor determined that the risks associated with the EDI purchases were less than the risks associated with the purchases made through the traditional system.Which one of the following factors best supports this prioritization of risks?

A. here are three vendors connected through EDI

B. bout half of the materials are purchased through EDI

C. he internal auditors were involved with systems development and testing of the EDI software

D. he external auditor did not examine EDI purchase controls during the annual financial audit

View answer

Correct Answer: C

Question #48

Which of the following creates a valid contract between the parties?

A. reward was posted for the capture of Tom Jones_ Maypole Burden, the county sheriff, captured Jones and claimed the reward

B. lim Polestone promised to give Mabel Abbot a wedding present

C. nxious Father promised to pay Albert Niceguy US $4,000 to take his daughter to the annual Mulestone Dance

D. estival Fanny was drowning in her hot tub

View answer

Correct Answer: C

Question #49

What is the best course of action to take if a program takes longer than usual to load or execute?

A. est the system by running a different application program

B. eboot the system

C. un antivirus software

D. ack up the hard disk files to floppies

View answer

Correct Answer: C

Question #50

The cost of statistical quality control in a product quality cost system is categorized as a(n):

A. nternal failure cost

B. raining cost

C. xternal failure cost

D. ppraisal cost

View answer

Correct Answer: D

Question #51

Data access security related to applications may be enforced through all of the following except:

A. ser identification and authentication functions incorporated in the application

B. tility software functions

C. ser identification and authentication functions in access control software

D. ecurity functions provided by a database management system

View answer

Correct Answer: B

Question #52

A customer intended to order 100 units of product 296014, but incorrectly ordered nonexistent product 296015.Which of the following controls most likely would detect this error?

A. heck digit verification

B. ecord count

C. ash total

D. edundant data check

View answer

Correct Answer: A

Question #53

In a diluted earnings-per-share computation, outstanding options issued by the reporting entity are assumed to be exercised. If the exercise price of these options exceeds the average market price, the computation would:

A. airly present diluted earnings per share on a prospective basis

B. airly present the maximum potential dilution of diluted earnings per share on a prospective basis

C. eflect the excess of the number of shares assumed issued at the average market price over the number of shares assumed issued at the exercise price

D. e anti dilutive

View answer

Correct Answer: D

Question #54

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 #55

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

View answer

Correct Answer: D

Question #56

Many companies recognize three major categories of costs of manufacturing a product. These are direct materials, direct labor, and overhead.Which of the following is an overhead cost in the production of an automobile?

A. he cost of small tools used in mounting tires on each automobile

B. he cost of the tires on each automobile

C. he cost of the laborers who place tires on each automobile

D. he delivery costs for the tires on each automobile

View answer

Correct Answer: A

Question #57

Which statement best describes total quality management TOM)?

A. OM emphasizes reducing the cast of inspection

B. OM emphasizes better statistical quality control techniques

C. OM emphasizes doing each job right the first time

D. OM emphasizes encouraging crass-functional teamwork

View answer

Correct Answer: C

Question #58

The gross domestic product GDP) will fall following an increase in:

A. onsumption expenditures

B. mports

C. xports

D. nflation

View answer

Correct Answer: B

Question #59

Using the balanced scorecard approach, an organization evaluates managerial performance based on

A. single ultimate measure of operating results, such as residual income

B. ultiple financial and nonfinancial measures

C. ultiple nonfinancial measures only

D. ultiple financial measures only

View answer

Correct Answer: B

Question #60

All of the following are useful for forecasting the needed level of inventory except:

A. nowledge of the behavior of business cycles

B. nternal accounting allocations of costs to different segments of the company

C. nformation about seasonal variations in demand

D. conometric modeling

View answer

Correct Answer: B

Question #61

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 #62

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

Question #63

Which of the following observations concerning quality control is most accurate?

A. rocess quality control is used when examining the quality of goads or services that already exist

B. rocess quality control is used to prevent defects, and product quality control is used primarily to identify defects after the fact

C. roduct quality control is designed to balance the marketability of higher quality against the cast of attaining higher quality

D. roduct quality control is more important than process quality control

View answer

Correct Answer: B

Question #64

Which one of the following is least likely to be recommended by the auditor when an EDI-EFT system is being designed?

A. he identity of the individual approving an electronic document should be stored as a data field

B. isaster recovery plans should be established

C. ata security procedures should be written to prevent changes to data by unauthorized individuals

D. emote access to electronic data should be denied

View answer

Correct Answer: D

Question #65

Which of the following measures create the most restrictive barrier to exporting to a country?

A. ariffs

B. uotas

C. mbargoes

D. xchange controls

View answer

Correct Answer: C

Question #66

The order costs associated with inventory management include:

A. nsurance costs, purchasing costs, shipping costs, and obsolescence

B. bsolescence, setup costs, quantity discounts lost, and storage costs

C. uantity discounts lost, storage costs, handling costs, and interest on capital invested

D. urchasing costs, shipping costs, setup costs, and quantity discounts lost

View answer

Correct Answer: D

Question #67

In a personal tax system, an individual's marginal tax rate is normally the average tax rate.

A. ption A

B. ption B

C. ption C

D. ption D

View answer

Correct Answer: A

Question #68

How much must the steel: to worth at expiration for a call holder to break even if the exercise price is US $60 and the call premium was U` $ 3?

A. S $57

B. S $60

C. S $61

D. S $63

View answer

Correct Answer: D

Question #69

An electronic meeting conducted between several parties at remote sites is referred to as:

A. eleprocessing

B. nteractive processing

C. elecommunicating

D. eleconferencing

View answer

Correct Answer: D

Question #70

Electronic commerce e-commerce) is generally defined as "conducting commercial activities over the Internet." These commercial activities can be all but which of the following?

A. usiness-to-business

B. usiness-to-consumer

C. usiness-to-employee

D. onsumer-to-business

View answer

Correct Answer: D

Question #71

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

View answer

Correct Answer: D

Question #72

An entity has made the decision to finance next year's capital projects through debt rather than additional equity. The benchmark cost of capital for these projects should be the:

A. efore-tax cost of new-debt financing

B. fter-tax cost of new-debt financing

C. ost of equity financing

D. eighted-average cost of capital

View answer

Correct Answer: D

Question #73

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.

View answer

Correct Answer: A

Question #74

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 #75

Assuming a 360-day year and that CyberAge continues paying on the last day of the credit period, the entity's weighted-average annual interest rate for trade credit ignoring the effects of compounding) for these two vendors is:

A. 7

B. 5

C. 8

D. 0

View answer

Correct Answer: B

Question #76

A company uses a target pricing and costing approach. The following is its costs and revenues for the current year:The company intends to increase unit sales to 120,000 in the next year by reducing the unit price to US $8. If the company is to achieve a unit target operating income of 15%, by what amount must it reduce the full cost per unit?

A. S $0

B. S $1

C. S $I

D. S $1

View answer

Correct Answer: D

Question #77

Short-term, unsecured promissory notes issued by large entities are known as:

A. gency securities

B. ankers acceptances

C. ommercial paper

D. epurchase agreements

View answer

Correct Answer: C

Question #78

A manufacturer can sell its single product for US $660. Below are the cost data for the product:Direct materials US$170Direct labor 225Manufacturing overhead 90The relevant margin amount when beginning a theory of constraints (TOC) analysis is:

A. S$490

B. S$345

C. S$265

D. S$175

View answer

Correct Answer: A

Question #79

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 #80

Some economic indicators lead the economy into a recovery or recession, and some lag it.An example of a lag variable is:

A. hronic unemployment

B. rders for consumer and producer goods

C. ousing starts

D. onsumer expectations

View answer

Correct Answer: A

Question #81

The investment opportunity schedule IOS) shows, in rank order, how much money the entity would invest at different rates of return. Such schedules can be drawn only for a set of projects that:

A. ave the same investment cost

B. re mutually exclusive

C. ave the same net present value

D. re independent

View answer

Correct Answer: D

Question #82

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

A. mproved efficiency in the business processes analyzed

B. xcess of cast over the benefit

C. eduction of operational efficiency

D. mployee resistance to change

View answer

Correct Answer: D

Question #83

The entity should invest in Project(s) and has an optimal capital budget of million.

A. ption A

B. ption B

C. ption C

D. ption D

View answer

Correct Answer: B

Question #84

When performing an e-commerce engagement, the greatest two concerns about the internal audit activity are:

A. ndependence and competency

B. apacity and objectivity

C. ompetency and objectivity

D. apacity and competency

View answer

Correct Answer: D

Question #85

The total exports of Vietnam are US $20,000,000 worth of rice to Greece, and the total exports of Greece are US $18, 11,111100 worth of olives to Vietnam. The terms of trade are:

A. ption A

B. ption B

C. ption C

D. ption D

View answer

Correct Answer: A

Question #86

An international nonprofit organization finances medical research. The majority of its revenue and support comes from fundraising activities, investments, and specific grants from an initial sponsoring corporation. The organization has been in operation over 15 years and has a small internal audit department. The organization has just finished a major fundraising drive that raised US $500 million for the current fiscal period.The following are selected data from recent financial statements (US dollar figure

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

View answer

Correct Answer: D

Question #87

To keep costs at a minimum and decrease the completion time by 1-1/2 days, Networks, Inc.should crash activity)

A. D and AB

B. E

C. D

D. B and CE

View answer

Correct Answer: A

Question #88

A bank is developing a computer system to help evaluate loan applications. The information systems IS staff interview the bank's mortgage underwriters to extract their knowledge and decision processes for input into the computer system. The completed system should be able to process information the same as do the underwriters and make final recommendations regarding loan decisions. This approach is called:

A. n expert system

B. neural network

C. n intelligent agent

D. uzzy logic

View answer

Correct Answer: A

Question #89

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

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Correct Answer: C

Question #90

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

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Correct Answer: C

Question #91

Attacks on computer networks may take many forms.Which of the following uses the computers of innocent parties infected with Trojan horse programs?

A. distributed denial-of-service attack

B. man-in-the-middle attack

C. brute-force attack

D. password-cracking attack

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Correct Answer: A

Question #92

The arrival times in a waiting-line (queuing) model follow which probability distribution?

A. inomial

B. hi-square

C. oisson

D. xponential

View answer

Correct Answer: C

Question #93

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 #94

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 #95

Which of the following procedures would an entity most likely include in its disaster recovery plan?

A. onvert all data from EDI format to an internal company format

B. aintain a Trojan horse program to prevent illicit activity

C. evelop an auxiliary power supply to provide uninterrupted electricity

D. tore duplicate copies of files in a location away from the computer center

View answer

Correct Answer: D

Question #96

The efficient markets theory implies that securities prices are:

A. ot a good estimate of future cash flows

B. air and a reflection of all publicly available information

C. ot the best benchmark for corporate financial decisions

D. lways less than their fair value

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Correct Answer: B

Question #97

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 #98

In a critical path analysis, if slack time in an activity exists, the activity:

A. s not essential to the overall project

B. s a backup activity to replace a main activity should it fail

C. ould be delayed without delaying the overall project

D. nvolves essentially no time to complete

View answer

Correct Answer: C

Question #99

What ensures that a company is complying with the documented quality management systemQMS: procedures and ISO 9000 standards?

A. he internal audit

B. he registrar

C. n-site inspections by an external auditor

D. anagement commitment

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Correct Answer: A

Question #100

Earnings-per-share data must be reported on the face of the income statement for:

A. ption A

B. ption B

C. ption C

D. ption D

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Correct Answer: B

Question #101

Most large-scale computer systems maintain at least three program libraries: production library for running programs); source code library maintains original source coding); and test library for programs which are being changed).Which of the following statements is correct regarding the implementation of sound controls over computer program libraries?

A. nly programmers should have access to the production library

B. sers should have access to the test library to determine whether all changes are properly made

C. nly the program librarian should be allowed to make changes to the production library

D. he computer operator should have access to both the production library and the source code library to assist in diagnosing computer crashes

View answer

Correct Answer: C

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