Question 1

According to the ISO 14001 standard, which of the following is not included in the requirements for a quality management system?

Accepted Answer

A)  Key processes across the entity which impact quality must be identified and included. 
B)  The quality management system must be documented in the articles of incorporation, quality manual, procedures, work instructions, and records. 
C)  Management must review the quality policy, analyze data about quality management system performance, and assess opportunities for improvement and the need for change. 
D)  The entity must have processes for inspections, testing, measurement, analysis, and improvement. 
A)  Key processes across the entity which impact quality must be identified and included. 
B)  The quality management system must be documented in the articles of incorporation, quality manual, procedures, work instructions, and records. 
C)  Management must review the quality policy, analyze data about quality management system performance, and assess opportunities for improvement and the need for change. 
D)  The entity must have processes for inspections, testing, measurement, analysis, and improvement.

Question 2

Technological uncertainty, subsidy, and spin-offs are usually characteristics of:

Accepted Answer

A)  Fragmented industries. 
B)  Declining industries. 
C)  Mature industries. 
D)  Emerging industries. 
A)  Fragmented industries. 
B)  Declining industries. 
C)  Mature industries. 
D)  Emerging industries.

Question 3

Which of the following is a primary driver behind the creation and prioritization of new strategic initiatives established by an organization?

Accepted Answer

A)  Risk tolerance. 
B)  Performance. 
C)  Threats and opportunities. 
D)  Governance. 
A)  Risk tolerance. 
B)  Performance. 
C)  Threats and opportunities. 
D)  Governance.

Question 4

Which of the following statements is correct regarding corporate compensation systems and related bonuses? 1. A bonus system should be considered part of the control environment of an organization and should be considered in formulating a report on internal control. 2. Compensation systems are not part of an organization's control system and should not be reported as such. 3. An audit of an organization's compensation system should be performed independently of an audit of the control system over other functions that impact corporate bonuses.

Accepted Answer

A)  1 only 
B)  2 only 
C)  3 only 
D)  2 and 3 only 
A)  1 only 
B)  2 only 
C)  3 only 
D)  2 and 3 only

Question 5

Which of the following is a characteristic of just-in-time inventory management systems?

Accepted Answer

A)  Users determine the optimal level of safety stocks. 
B)  They are applicable only to large organizations. 
C)  They do not really increase overall economic efficiency because they merely shift inventory levels further up the supply chain. 
D)  They rely heavily on high quality materials. 
A)  Users determine the optimal level of safety stocks. 
B)  They are applicable only to large organizations. 
C)  They do not really increase overall economic efficiency because they merely shift inventory levels further up the supply chain. 
D)  They rely heavily on high quality materials.

Question 6

Which of the following is false with regard to Internet connection firewalls?

Accepted Answer

A)  Firewalls can protect against computer viruses. 
B)  Firewalls monitor attacks from the Internet. 
C)  Firewalls provide network administrators tools to retaliate against hackers. 
D)  Firewalls may be software-based or hardware-based. 
A)  Firewalls can protect against computer viruses. 
B)  Firewalls monitor attacks from the Internet. 
C)  Firewalls provide network administrators tools to retaliate against hackers. 
D)  Firewalls may be software-based or hardware-based.

Question 7

Which of the following statements about COBIT is not true?

Accepted Answer

A)  COBIT helps management understand and manage the risks associated with information technology (IT) processes. 
B)  Management needs to determine the cost-benefit ratio of adopting COBIT control objectives. 
C)  COBIT control objectives are specific to various IT platforms and help determine minimum controls. 
D)  COBIT provides management with the capability to conduct self-assessments against industry best practices. 
A)  COBIT helps management understand and manage the risks associated with information technology (IT) processes. 
B)  Management needs to determine the cost-benefit ratio of adopting COBIT control objectives. 
C)  COBIT control objectives are specific to various IT platforms and help determine minimum controls. 
D)  COBIT provides management with the capability to conduct self-assessments against industry best practices.

Question 8

The first step in determining product price is:

Accepted Answer

A)  Determining the cost of the product. 
B)  Developing pricing objectives. 
C)  Evaluating prices set by the competitors. 
D)  Selecting a pricing method. 
A)  Determining the cost of the product. 
B)  Developing pricing objectives. 
C)  Evaluating prices set by the competitors. 
D)  Selecting a pricing method.

Question 9

Which of the following borrowing options is an unsecured loan?

Accepted Answer

A)  Second-mortgage financing from a bank. 
B)  An issue of commercial paper. 
C)  Pledged accounts receivable. 
D)  Asset-based financing. 
A)  Second-mortgage financing from a bank. 
B)  An issue of commercial paper. 
C)  Pledged accounts receivable. 
D)  Asset-based financing.

Question 10

An organization's balance sheet indicates that the total asset amount and the total capital stock amount remained unchanged from one year to the next, and no dividends were declared or paid. However, the organization reported a loss of $200,000. Which of the following describes the most likely year-over-year change to the organization's total liabilities and total stockholder equity?

Accepted Answer

A)  The total liabilities and total stockholder equity both increased. 
B)  The total liabilities and total stockholder equity both decreased. 
C)  The total liabilities decreased, and the total stockholder equity increased. 
D)  The total liabilities increased, and the total stockholder equity decreased. 
A)  The total liabilities and total stockholder equity both increased. 
B)  The total liabilities and total stockholder equity both decreased. 
C)  The total liabilities decreased, and the total stockholder equity increased. 
D)  The total liabilities increased, and the total stockholder equity decreased.

Question 11

Which of the following methods, if used in conjunction with electronic data interchange (EDI), will improve the organization's cash management program, reduce transaction data input time and errors, and allow the organization to negotiate discounts with EDI vendors based on prompt payment?

Accepted Answer

A)  Electronic funds transfer. 
B)  Knowledge-based systems. 
C)  Biometrics. 
D)  Standardized graphical user interface. 
A)  Electronic funds transfer. 
B)  Knowledge-based systems. 
C)  Biometrics. 
D)  Standardized graphical user interface.

Question 12

According to IIA guidance on IT, which of the following best describes a situation where data backup plans exist to ensure that critical data can be restored at some point in the future, but recovery and restore processes have not been defined?

Accepted Answer

A)  Hot recovery plan. 
B)  Warm recovery plan. 
C)  Cold recovery plan. 
D)  Absence of recovery plan. 
A)  Hot recovery plan. 
B)  Warm recovery plan. 
C)  Cold recovery plan. 
D)  Absence of recovery plan.

Question 13

Which of the following is an element of effective negotiating?

Accepted Answer

A)  Ensuring that the other party has a personal stake in the agreement. 
B)  Focusing on interests rather than on obtaining a winning position. 
C)  Considering a few select choices during the settlement phase. 
D)  Basing the agreement on negotiating power and positioning leverage. 
A)  Ensuring that the other party has a personal stake in the agreement. 
B)  Focusing on interests rather than on obtaining a winning position. 
C)  Considering a few select choices during the settlement phase. 
D)  Basing the agreement on negotiating power and positioning leverage.

Question 14

The internal audit activity completed an initial risk analysis of the organization's data storage center and found several areas of concern. Which of the following is the most appropriate next step?

Accepted Answer

A)  Risk response. 
B)  Risk identification. 
C)  Identification of context. 
D)  Risk assessment. 
A)  Risk response. 
B)  Risk identification. 
C)  Identification of context. 
D)  Risk assessment.

Question 15

Which of the following authentication device credentials is the most difficult to revoke when an employee's access rights need to be removed?

Accepted Answer

A)  A traditional key lock. 
B)  A biometric device. 
C)  A card-key system. 
D)  A proximity device. 
A)  A traditional key lock. 
B)  A biometric device. 
C)  A card-key system. 
D)  A proximity device.

Question 16

Which of the following situations best applies to an organization that uses a project, rather than a process, to accomplish its business activities?

Accepted Answer

A)  A clothing company designs, makes, and sells a new item. 
B)  A commercial construction company is hired to build a warehouse. 
C)  A city department sets up a new firefighter training program. 
D)  A manufacturing organization acquires component parts from a contracted vendor. 
A)  A clothing company designs, makes, and sells a new item. 
B)  A commercial construction company is hired to build a warehouse. 
C)  A city department sets up a new firefighter training program. 
D)  A manufacturing organization acquires component parts from a contracted vendor.

Question 17

Which of the following is a limiting factor for capacity expansion?

Accepted Answer

A)  Government pressure on organizations to increase or maintain employment. 
B)  Production orientation of management. 
C)  Lack of credible market leader in the industry. 
D)  Company diversification. 
A)  Government pressure on organizations to increase or maintain employment. 
B)  Production orientation of management. 
C)  Lack of credible market leader in the industry. 
D)  Company diversification.

Question 18

Which of the following is the most appropriate way to record each partner's initial investment in a partnership?

Accepted Answer

A)  At the value agreed upon by the partners. 
B)  At book value. 
C)  At fair value. 
D)  At the original cost. 
A)  At the value agreed upon by the partners. 
B)  At book value. 
C)  At fair value. 
D)  At the original cost.

Question 19

A holding company set up a centralized group technology department, using a local area network with a mainframe computer to process accounting information for all companies within the group. An internal auditor would expect to find all of the following controls within the technology department except:

Accepted Answer

A)  Adequate segregation of duties between data processing controls and file security controls. 
B)  Documented procedures for remote job entry and for local data file retention. 
C)  Emergency and disaster recovery procedures and maintenance agreements in place to ensure continuity of operations. 
D)  Established procedures to prevent and detect unauthorized changes to data files. 
A)  Adequate segregation of duties between data processing controls and file security controls. 
B)  Documented procedures for remote job entry and for local data file retention. 
C)  Emergency and disaster recovery procedures and maintenance agreements in place to ensure continuity of operations. 
D)  Established procedures to prevent and detect unauthorized changes to data files.

Question 20

Which of the following is the most appropriate test to assess the privacy risks associated with an organization's workstations?

Accepted Answer

A)  Penetration test. 
B)  Social engineering test. 
C)  Vulnerability test. 
D)  Physical control test. 
A)  Penetration test. 
B)  Social engineering test. 
C)  Vulnerability test. 
D)  Physical control test.

According to the ISO 14001 standard, which of the following is not included in the requirements for a quality management system?

Technological uncertainty, subsidy, and spin-offs are usually characteristics of:

Which of the following is a primary driver behind the creation and prioritization of new strategic initiatives established by an organization?

Which of the following is a characteristic of just-in-time inventory management systems?

Which of the following is false with regard to Internet connection firewalls?

Which of the following statements about COBIT is not true?

The first step in determining product price is:

Which of the following borrowing options is an unsecured loan?

Which of the following methods, if used in conjunction with electronic data interchange (EDI), will improve the organization's cash management program, reduce transaction data input time and errors, and allow the organization to negotiate discounts with EDI vendors based on prompt payment?

According to IIA guidance on IT, which of the following best describes a situation where data backup plans exist to ensure that critical data can be restored at some point in the future, but recovery and restore processes have not been defined?

Which of the following is an element of effective negotiating?

The internal audit activity completed an initial risk analysis of the organization's data storage center and found several areas of concern. Which of the following is the most appropriate next step?

Which of the following authentication device credentials is the most difficult to revoke when an employee's access rights need to be removed?

Which of the following situations best applies to an organization that uses a project, rather than a process, to accomplish its business activities?

Which of the following is a limiting factor for capacity expansion?

Which of the following is the most appropriate way to record each partner's initial investment in a partnership?

Which of the following is the most appropriate test to assess the privacy risks associated with an organization's workstations?

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Exam 5: Business Analysis and Information Technology

According to the ISO 14001 standard, which of the following is not included in the requirements for a quality management system?

Technological uncertainty, subsidy, and spin-offs are usually characteristics of:

Which of the following is a primary driver behind the creation and prioritization of new strategic initiatives established by an organization?

Which of the following is a characteristic of just-in-time inventory management systems?

Which of the following is false with regard to Internet connection firewalls?

Which of the following statements about COBIT is not true?

The first step in determining product price is:

Which of the following borrowing options is an unsecured loan?

Which of the following methods, if used in conjunction with electronic data interchange (EDI), will improve the organization's cash management program, reduce transaction data input time and errors, and allow the organization to negotiate discounts with EDI vendors based on prompt payment?

According to IIA guidance on IT, which of the following best describes a situation where data backup plans exist to ensure that critical data can be restored at some point in the future, but recovery and restore processes have not been defined?

Which of the following is an element of effective negotiating?

The internal audit activity completed an initial risk analysis of the organization's data storage center and found several areas of concern. Which of the following is the most appropriate next step?

Which of the following authentication device credentials is the most difficult to revoke when an employee's access rights need to be removed?

Which of the following situations best applies to an organization that uses a project, rather than a process, to accomplish its business activities?

Which of the following is a limiting factor for capacity expansion?

Which of the following is the most appropriate way to record each partner's initial investment in a partnership?

Which of the following is the most appropriate test to assess the privacy risks associated with an organization's workstations?

Certified Financial Services Auditor

Certified Government Auditing Professional

The Internal Audit Activity Role in Governance, Risk, and Control

Conducting the Internal Audit Engagement

Filters