[Free] Download New Updated (October 2016) IIA IIA-CIA-Part3 Real Exam 121-130

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QUESTION 121

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?

 

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.

 

Correct Answer: A

 

 

QUESTION 122

Which of the following is the most likely reason an organization may decide to undertake a stock split?

 

A.

To keep stock price constant.

B.

To keep shareholders’ equity constant.

C.

To increase shareholders’ equity.

D.

To enhance the stock liquidity.

 

Correct Answer: D

 

 

QUESTION 123

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?

 

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.

 

Correct Answer: D

 

QUESTION 124

Which of the following is not a potential area of concern when an internal auditor places reliance on spreadsheets developed by users?

 

A.

Increasing complexity over time.

B.

Interface with corporate systems.

C.

Ability to meet user needs.

D.

Hidden data columns or worksheets.

 

Correct Answer: C

 

 

QUESTION 125

Which of the following budgets must be prepared first?

 

A.

Cash budget.

B.

Production budget.

C.

Sales budget.

D.

Selling and administrative expenses budget.

 

Correct Answer: C

 

 

QUESTION 126

According to the International Professional Practices Framework, which of the following statements is true regarding a corporate social responsibility (CSR) program?

 

1. Every employee generally has a responsibility for ensuring the success of CSR objectives.

 

2. The board has overall responsibility for the effectiveness of internal control processes associated with CSR.

 

3. Public reporting on the CSR governance process is expected.

 


4. Organizations generally have flexibility regarding what is included in a CSR program.

 

A.

1, 2, and 3 only

B.

1, 2, and 4 only

C.

1, 3, and 4 only

D.

2, 3, and 4 only

 

Correct Answer: B

 

 

QUESTION 127

An organization is considering the outsourcing of its business processes related to payroll and information technology functions. Which of the following is the most significant area of concern for management regarding this proposed agreement?

 

A.

Ensuring that payments to the vendor are appropriate and timely for the services delivered.

B.

Ensuring that the vendor has complete management control of the outsourced process.

C.

Ensuring that there are means of monitoring the efficiency of the outsourced process.

D.

Ensuring that there are means of monitoring the effectiveness of the outsourced process.

Correct Answer: D

 

 

QUESTION 128

Within an enterprise, IT governance relates to the:

 

1. Alignment between the enterprise’s IT long term plan and the organization’s objectives.

 

2. Organizational stru
ctures of the company that are designed to ensure that IT supports the organization’s strategies and objectives.

 

3. Operational plans established to support the IT strategies and objectives.

 

4. Role of the company’s leadership in ensuring IT supports the organization’s strategies and objectives.

 

A.

1 and 2 only

B.

3 and 4 only

C.

1, 2, and 4 only

D.

2, 3, and 4 only

 

Correct Answer: C

 

 

QUESTION 129

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?

 

A.

Electronic funds transfer.

B.

Knowledge-based systems.

C.

Biometrics.

D.

Standardized graphical user interface.

 

Correct Answer: A

 

 

QUESTION 130

Which of the following phases of a business cycle are marked by an underuse of resources?

 

1. The trough.

 

2. The peak.

 

3. The recovery.

 

4. The recession.

 

A.

1 and 3 only

B.

1 and 4 only

C.

2 and 3 only

D.

2 and 4 only

 

Correct Answer: B

 

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