Question 1

What is the primary purpose of data and systems backup?

Accepted Answer

A)  To restore all data and systems immediately after the occurrence of an incident. 
B)  To set the maximum allowable downtime to restore systems and data after the occurrence of an incident. 
C)  To set the point in time to which systems and data must be recovered after the occurrence of an incident. 
D)  To restore data and systems to a previous point in time after the occurrence of an incident. 
A)  To restore all data and systems immediately after the occurrence of an incident. 
B)  To set the maximum allowable downtime to restore systems and data after the occurrence of an incident. 
C)  To set the point in time to which systems and data must be recovered after the occurrence of an incident. 
D)  To restore data and systems to a previous point in time after the occurrence of an incident.

Question 2

Under a value-added taxing system:

Accepted Answer

A)  Businesses must pay a tax only if they make a profit. 
B)  The consumer ultimately bears the cost of the tax through higher prices. 
C)  Consumer savings are discouraged. 
D)  The amount of value added is the difference between an organization's sales and its cost of goods sold. 
A)  Businesses must pay a tax only if they make a profit. 
B)  The consumer ultimately bears the cost of the tax through higher prices. 
C)  Consumer savings are discouraged. 
D)  The amount of value added is the difference between an organization's sales and its cost of goods sold.

Question 3

When an organization is choosing a new external auditor, which of the following is the most appropriate role for the chief audit executive to undertake?

Accepted Answer

A)  Review and acquire the external audit service. 
B)  Assess the appraisal and actuarial services. 
C)  Determine the selection criteria. 
D)  Identify regulatory requirements to be considered. 
A)  Review and acquire the external audit service. 
B)  Assess the appraisal and actuarial services. 
C)  Determine the selection criteria. 
D)  Identify regulatory requirements to be considered.

Question 4

What must be monitored in order to manage risk of consumer product inventory obsolescence? 1. Inventory balances. 2. Market share forecasts. 3. Sales returns. 4. Sales trends.

Accepted Answer

A)  1 only 
B)  4 only 
C)  1 and 4 only 
D)  1, 2, and 3 only 
A)  1 only 
B)  4 only 
C)  1 and 4 only 
D)  1, 2, and 3 only

Question 5

Which of the following is the best example of a compliance risk that is likely to arise when adopting a bring-your-own-device (BYOD) policy?

Accepted Answer

A)  The risk that users try to bypass controls and do not install required software updates. 
B)  The risk that smart devices can be lost or stolen due to their mobile nature. 
C)  The risk that an organization intrusively monitors personal information stored on smart devices. 
D)  The risk that proprietary information is not deleted from the device when an employee leaves. 
A)  The risk that users try to bypass controls and do not install required software updates. 
B)  The risk that smart devices can be lost or stolen due to their mobile nature. 
C)  The risk that an organization intrusively monitors personal information stored on smart devices. 
D)  The risk that proprietary information is not deleted from the device when an employee leaves.

Question 6

When auditing an application change control process, which of the following procedures should be included in the scope of the audit? 1. Ensure system change requests are formally initiated, documented, and approved. 2. Ensure processes are in place to prevent emergency changes from taking place. 3. Ensure changes are adequately tested before being placed into the production environment. 4. Evaluate whether the procedures for program change management are adequate.

Accepted Answer

A)  1 only 
B)  1 and 3 only 
C)  2 and 4 only 
D)  1, 3, and 4 only 
A)  1 only 
B)  1 and 3 only 
C)  2 and 4 only 
D)  1, 3, and 4 only

Question 7

An investor has acquired an organization that has a dominant position in a mature, slow-growth industry and consistently creates positive financial income. Which of the following terms would the investor most likely label this investment in her portfolio?

Accepted Answer

A)  A star. 
B)  A cash cow. 
C)  A question mark. 
D)  A dog. 
A)  A star. 
B)  A cash cow. 
C)  A question mark. 
D)  A dog.

Question 8

Which of the following describes the most effective control that restricts access to secure areas?

Accepted Answer

A)  Employee security policy. 
B)  Access log reviews. 
C)  Biometric authorization. 
D)  Security cameras. 
A)  Employee security policy. 
B)  Access log reviews. 
C)  Biometric authorization. 
D)  Security cameras.

Question 9

A brand manager in a consumer food products organization suspected that several days of the point-of-sale data on the spreadsheet from one grocery chain were missing. The best approach for detecting missing rows in spreadsheet data would be to:

Accepted Answer

A)  Sort on product identification code and identify missing product identification codes. 
B)  Review store identification code and identify missing product identification codes. 
C)  Compare product identification codes for consecutive periods. 
D)  Compare product identification codes by store for consecutive periods. 
A)  Sort on product identification code and identify missing product identification codes. 
B)  Review store identification code and identify missing product identification codes. 
C)  Compare product identification codes for consecutive periods. 
D)  Compare product identification codes by store for consecutive periods.

Question 10

An organization has recorded the following profit and expenses: Profit before interest and tax $200,000 Sales $2,300,000 Purchases of materials $700,000 Interest expenses $30,000 If the value-added tax (VAT) rate is 20 percent and the corporate tax rate is 30 percent, which of the following is the amount of VAT that the organization has to pay?

Accepted Answer

A)  $34,000 
B)  $51,000 
C)  $60,000 
D)  $320,000 
A)  $34,000 
B)  $51,000 
C)  $60,000 
D)  $320,000

Question 11

An organization requires an average of 58 days to convert raw materials into finished products to sell. An average of 42 additional days is required to collect receivables. If the organization takes an average of 10 days to pay for the raw materials, how long is its total cash conversion cycle?

Accepted Answer

A)  26 days. 
B)  90 days. 
C)  100 days. 
D)  110 days. 
A)  26 days. 
B)  90 days. 
C)  100 days. 
D)  110 days.

Question 12

In an analysis of alternative credit-management policies, which of the following components will cause the net present value of receivables on credit sales to increase, if everything else remains constant?

Accepted Answer

A)  A tougher collections policy that reduces the bad debt loss ratio. 
B)  A higher cost per unit sold. 
C)  A longer average collection period. 
D)  An increase in the cost of capital. 
A)  A tougher collections policy that reduces the bad debt loss ratio. 
B)  A higher cost per unit sold. 
C)  A longer average collection period. 
D)  An increase in the cost of capital.

Question 13

Which of the following is an example of a key systems development control typically found in the in-house development of an application system?

Accepted Answer

A)  Logical access controls monitor application usage and generate audit trails. 
B)  The development process is designed to prevent, detect, and correct errors that may occur. 
C)  A record is maintained to track the process of data from input, to output, to storage. 
D)  Business users' requirements are documented, and their achievement is monitored. 
A)  Logical access controls monitor application usage and generate audit trails. 
B)  The development process is designed to prevent, detect, and correct errors that may occur. 
C)  A record is maintained to track the process of data from input, to output, to storage. 
D)  Business users' requirements are documented, and their achievement is monitored.

Question 14

A technology developer has entered a two-year contract with another organization to design new software. According to IIA guidance, which of the following provisions of this agreement would be the most effective to protect the developer's product knowledge and expertise?

Accepted Answer

A)  The right to audit. 
B)  A performance measurement system. 
C)  Defined roles and responsibilities. 
D)  Intellectual property rights. 
A)  The right to audit. 
B)  A performance measurement system. 
C)  Defined roles and responsibilities. 
D)  Intellectual property rights.

Question 15

Which of the following strategies would most likely prevent an organization from adjusting to evolving industry market conditions?

Accepted Answer

A)  Specializing in proven manufacturing techniques that have made the organization profitable in the past. 
B)  Substituting its own production technology with advanced techniques used by its competitors. 
C)  Forgoing profits over a period of time to gain market share from its competitors. 
D)  Using the same branding to sell its products through new sales channels to target new markets. 
A)  Specializing in proven manufacturing techniques that have made the organization profitable in the past. 
B)  Substituting its own production technology with advanced techniques used by its competitors. 
C)  Forgoing profits over a period of time to gain market share from its competitors. 
D)  Using the same branding to sell its products through new sales channels to target new markets.

Question 16

An organization decided to install a motion detection system in its warehouse to protect against after-hours theft. According to the COSO enterprise risk management framework, which of the following best describes this risk management strategy?

Accepted Answer

A)  Avoidance. 
B)  Reduction. 
C)  Elimination. 
D)  Sharing. 
A)  Avoidance. 
B)  Reduction. 
C)  Elimination. 
D)  Sharing.

Question 17

With regard to disaster recovery planning, which of the following would most likely involve stakeholders from several departments?

Accepted Answer

A)  Determining the frequency with which backups will be performed. 
B)  Prioritizing the order in which business systems would be restored. 
C)  Assigning who in the IT department would be involved in the recovery procedures. 
D)  Assessing the resources needed to meet the data recovery objectives. 
A)  Determining the frequency with which backups will be performed. 
B)  Prioritizing the order in which business systems would be restored. 
C)  Assigning who in the IT department would be involved in the recovery procedures. 
D)  Assessing the resources needed to meet the data recovery objectives.

Question 18

In creating a risk-based plan, which of the following best describes a top-down approach to understanding business processes?

Accepted Answer

A)  Identifying the processes at the activity level. 
B)  Analyzing the organization's strategic plan where the business processes are defined. 
C)  Analyzing the organization's objectives and identifying the processes needed to achieve the objectives. 
D)  Identifying the risks affecting the organization, the objectives, and then the processes concerned. 
A)  Identifying the processes at the activity level. 
B)  Analyzing the organization's strategic plan where the business processes are defined. 
C)  Analyzing the organization's objectives and identifying the processes needed to achieve the objectives. 
D)  Identifying the risks affecting the organization, the objectives, and then the processes concerned.

Question 19

Where complex problems need to be addressed, which of the following communication networks would be most appropriate?

Accepted Answer

A)  Chain. 
B)  All-channel. 
C)  Circle. 
D)  Wheel. 
A)  Chain. 
B)  All-channel. 
C)  Circle. 
D)  Wheel.

Question 20

Which of the following is a major advantage of decentralized organizations, compared to centralized organizations?

Accepted Answer

A)  Decentralized organizations are more focused on organizational goals. 
B)  Decentralized organizations streamline organizational structure. 
C)  Decentralized organizations tend to be less expensive to operate. 
D)  Decentralized organizations tend to be more responsive to market changes. 
A)  Decentralized organizations are more focused on organizational goals. 
B)  Decentralized organizations streamline organizational structure. 
C)  Decentralized organizations tend to be less expensive to operate. 
D)  Decentralized organizations tend to be more responsive to market changes.

What is the primary purpose of data and systems backup?

Under a value-added taxing system:

When an organization is choosing a new external auditor, which of the following is the most appropriate role for the chief audit executive to undertake?

What must be monitored in order to manage risk of consumer product inventory obsolescence? 1. Inventory balances. 2. Market share forecasts. 3. Sales returns. 4. Sales trends.

Which of the following is the best example of a compliance risk that is likely to arise when adopting a bring-your-own-device (BYOD) policy?

An investor has acquired an organization that has a dominant position in a mature, slow-growth industry and consistently creates positive financial income. Which of the following terms would the investor most likely label this investment in her portfolio?

Which of the following describes the most effective control that restricts access to secure areas?

A brand manager in a consumer food products organization suspected that several days of the point-of-sale data on the spreadsheet from one grocery chain were missing. The best approach for detecting missing rows in spreadsheet data would be to:

An organization requires an average of 58 days to convert raw materials into finished products to sell. An average of 42 additional days is required to collect receivables. If the organization takes an average of 10 days to pay for the raw materials, how long is its total cash conversion cycle?

In an analysis of alternative credit-management policies, which of the following components will cause the net present value of receivables on credit sales to increase, if everything else remains constant?

Which of the following is an example of a key systems development control typically found in the in-house development of an application system?

A technology developer has entered a two-year contract with another organization to design new software. According to IIA guidance, which of the following provisions of this agreement would be the most effective to protect the developer's product knowledge and expertise?

Which of the following strategies would most likely prevent an organization from adjusting to evolving industry market conditions?

An organization decided to install a motion detection system in its warehouse to protect against after-hours theft. According to the COSO enterprise risk management framework, which of the following best describes this risk management strategy?

With regard to disaster recovery planning, which of the following would most likely involve stakeholders from several departments?

In creating a risk-based plan, which of the following best describes a top-down approach to understanding business processes?

Where complex problems need to be addressed, which of the following communication networks would be most appropriate?

Which of the following is a major advantage of decentralized organizations, compared to centralized organizations?

Certified Financial Services Auditor

Certified Government Auditing Professional

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

Conducting the Internal Audit Engagement

Filters

Exam 5: Business Analysis and Information Technology

What is the primary purpose of data and systems backup?

Under a value-added taxing system:

When an organization is choosing a new external auditor, which of the following is the most appropriate role for the chief audit executive to undertake?

What must be monitored in order to manage risk of consumer product inventory obsolescence? 1. Inventory balances. 2. Market share forecasts. 3. Sales returns. 4. Sales trends.

Which of the following is the best example of a compliance risk that is likely to arise when adopting a bring-your-own-device (BYOD) policy?

An investor has acquired an organization that has a dominant position in a mature, slow-growth industry and consistently creates positive financial income. Which of the following terms would the investor most likely label this investment in her portfolio?

Which of the following describes the most effective control that restricts access to secure areas?

A brand manager in a consumer food products organization suspected that several days of the point-of-sale data on the spreadsheet from one grocery chain were missing. The best approach for detecting missing rows in spreadsheet data would be to:

An organization requires an average of 58 days to convert raw materials into finished products to sell. An average of 42 additional days is required to collect receivables. If the organization takes an average of 10 days to pay for the raw materials, how long is its total cash conversion cycle?

In an analysis of alternative credit-management policies, which of the following components will cause the net present value of receivables on credit sales to increase, if everything else remains constant?

Which of the following is an example of a key systems development control typically found in the in-house development of an application system?

A technology developer has entered a two-year contract with another organization to design new software. According to IIA guidance, which of the following provisions of this agreement would be the most effective to protect the developer's product knowledge and expertise?

Which of the following strategies would most likely prevent an organization from adjusting to evolving industry market conditions?

An organization decided to install a motion detection system in its warehouse to protect against after-hours theft. According to the COSO enterprise risk management framework, which of the following best describes this risk management strategy?

With regard to disaster recovery planning, which of the following would most likely involve stakeholders from several departments?

In creating a risk-based plan, which of the following best describes a top-down approach to understanding business processes?

Where complex problems need to be addressed, which of the following communication networks would be most appropriate?

Which of the following is a major advantage of decentralized organizations, compared to centralized organizations?

Certified Financial Services Auditor

Certified Government Auditing Professional

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

Conducting the Internal Audit Engagement

Filters