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A restaurant deeded to expand its business to include delivery services rather than relying on third-party food delivery services. Which of the following best describes the restaurant ' s strategy?
Which of the following COSO internal control framework components encompasses establishing structures, reporting lines, authorities, and responsibilities?
Which of the following is always true regarding the use of encryption algorithms based on public key infrastructure (PKI)?
The following transactions and events occurred during the year:
- $300,000 of raw materials were purchased, of which $20,000 were returned because of defects
- $600,000 of direct labor costs were incurred.
- S750.000 of manufacturing overhead costs were incurred.
What is the organization ' s cost of goods sold for the year?
Which of the following is useful for forecasting the required level of inventory?
1) Statistical modeling.
2) Information about seasonal variations in demand.
3) Knowledge of the behavior of different business cycles.
4) Pricing models linked to seasonal demand.
Which of the following statements is most accurate with respect to various forms, elements, and characteristics of business contracts?
An organization is developing a new online collaboration tool for employees. The tool includes a homepage that is customized to each employee according to his department and job function Which of the following engagements should be conducted to ensure that the organization has included all departments and job functions in the system before it is implemented?
Which of the following options correctly defines a transmission control protocol/Internet protocol (TCP/IP)?
Which of the following is likely to occur when an organization decides to adopt a decentralized organizational structure?
When using data analytics during a review of the procurement process what is the first step in the analysis process?
The leadership of an organization encourages employees to form voluntary problem-solving groups whereby several employees from the same work area meet regularity during work hours to discuss improvements and creative ways to reduce costs. Which of the following best describes this approach?
Which of the following practices circumvents administrative restrictions on smart devices, thereby increasing data security risks?
An organization had a gross profit margin of 40 percent in year one and in year two. The net profit margin was 18 percent in year one and 13 percent in year two.
Which of the following could be the reason for the decline in the net profit margin for year two?
Which of the following stages of group development is associated with accepting team responsibilities?
Which of the following would provide the most relevant assurance that the application under development will provide maximum value to the organization?
An organization uses a database management system (DBMS) as a repository for data. The DBMS, in turn, supports a number of end-user developed applications which were created using fourth-generation programming languages. Some of the applications update the database. Which of the following is the most important control related to the integrity of the data in the database?
Which of the following are appropriate functions for an IT steering committee?
1) Assess the technical adequacy of standards for systems design and programming.
2) Continually monitor of the adequacy and accuracy of software and hardware in use.
3) Assess the effects of new technology on the organization`s IT operations.
4) Provide broad oversight of implementation, training, and operation of new systems.
For an engineering department with a total quality management program, important elements of quality management include all of the following except:
Which of the following performance measures would be appropriate for evaluating an investment center, which has responsibility for its revenues, costs, and investment base, but would not be appropriate for evaluating cost, revenue, or profit centers?
According to Porter ' s model of competitive strategy, which of the following is a generic strategy?
1 Differentiation.
2) Competitive advantage.
3) Focused differentiation.
4) Cost focus.
An organization is considering mirroring the customer data for one regional center at another center. A disadvantage of such an arrangement would be:
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 structures 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.
Which of the following statements is true regarding outsourced business processes?
The mobility of personal smart devices significantly increases which of the following risks?
A clothing company sells shirts for $8 per shirt. In order to break even, the company must sell 25,000 shirts. Actual sales total $300,000.
What is margin of safety sales for the company?
Which of the following principles is shared by both hierarchical and open organizational structures?
1) A superior can delegate the authority to make decisions but cannot delegate the ultimate responsibility for the results of those decisions
2) A supervisor ' s span of control should not exceed seven subordinates
3) Responsibility should be accompanied by adequate authority
4) Employees at all levels should be empowered to make decisions.
Which of the following IT-related activities is most commonly performed by the second line of defense?
An organization has an agreement with a third-party vendor to have a fully operational facility, duplicate of the original site and configured to the organization ' s needs, in order to quickly recover operational
capability in the event of a disaster.
Which of the following best describes this approach to disaster recovery planning?
During an audit of the organization ' s annual financial statements, the internal auditor notes that the current cost of goods sold percentage is substantially higher than in prior years. Which of the following is the most likely explanation for this increase?
Which of the following is a project planning methodology that involves a complex series ot required simulations to provide information about schedule risk?
Organization X owns a 38 percent equity stake in Organization Y. Which of the following statements is true regarding the financial treatment for this relationship?
Which of the following IT operational areas is responsible for the integrity of data flow within an
organization?
Which of the following IT controls includes protection for mainframe computers and workstations?
The board has requested that the internal audit activity be involved in all phases of the organization ' s outsourcing of its network management. During which of the following stages is the internal auditor most likely to verify that the organization ' s right-to-audit clause is drafted effectively?
According to IIA guidance, which of the following is a broad collection of integrated policies, standards, and procedures used to guide the planning and execution of a project?
Which of the following statements is true regarding the " management-by-objectives " method?
Which of the following factors is most responsible for the increasing risk that unauthorized parties may obtain or tamper with personal data?
What would be the effect if an organization paid one of its liabilities twice during the year in error?
An internal auditor is investigating a potential fraudulent activity. What is the first test the auditor should perform on the transaction data under scrutiny?
For employees, the primary value of implementing job enrichment is which of the following?
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?
An employee ' s mobile device used for work was stolen in a home burglary.
Which control, if already implemented by the organization, would best prevent unauthorized access to organizational data stored on the employee ' s device?
Which of the following is a security feature that involves the use of hardware and software to fitter or prevent specific information from moving between the outside network and the outside network?
An internal auditor reviews a data population and calculates the mean, median, and range.
What is the most likely purpose of performing this analytic technique?
Which of the following statements is true regarding an organization ' s inventory valuation1?
An organization has a complex systems infrastructure consisting of multiple internally developed, off the shelf, and purchased but significantly customized applications. Some of these applications share databases or process data that is used by another stand-alone application, and interfaces have been written to move data between these applications as needed through batch processing Which of the following situations presents the greatest risk exposure given this environment?
While conducting audit procedures at the organization ' s data center, an internal auditor noticed the following:
Backup media was located on data center shelves.
Backup media was organized by date.
Backup schedule was one week in duration.
The system administrator was able to present restore logs.
Which of the following is reasonable for the internal auditor to conclude?
Which of the following recognized competitive strategies focuses on gaining efficiencies?
An organization has a total asset turnover of 3.0 times and a total debt-to-total assets ratio of 80 percent. If the organization has total debt of $1 000 000 what is the organization ' s sales level?
A manager at a publishing company received an email that appeared to be from one of her vendors with an attachment that contained malware embedded in an Excel spreadsheet. When the spreadsheet was opened, the cybercriminal was able to attack the company ' s network and gain access to an unpublished and highly anticipated book.
Which of the following controls would be most effective to prevent such an attack?
When management uses the absorption costing approach, fixed manufacturing overhead costs are classified as which of the following types of costs?
Which of the following actions would senior management need to consider as pan of new IT guidelines regarding the organization ' s cybersecurity policies?
Which of the following security controls would be the most effective in preventing security breaches?
An internal audit manager is explaining to a newly hired staff auditor the various analytics techniques frequently used by the internal audit activity Which of the following statements is true regarding these analytics techniques?
In terms of international business strategy, which of the following is true regarding a multi-domestic strategy?
If a bank ' s activities are categorized under such departments as community banking, institutional banking, and agricultural banking, what kind of departmentalization is being utilized?
A capital investment project will have a higher net present value, everything else being equal, if it has:
Which of the following are appropriate reasons for internal auditors to document processes as part of an audit engagement?
1) To determine areas of primary concern.
2) To establish a standard format for process mapping.
3) To define areas of responsibility within the organization.
4) To assess the performance of employees.
Which of the following is the best reason for considering the acquisition of a nondomestic organization?
Which of the following is an example of a nonfinancial internal failure quality cost?
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?
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.
Which of the following describes the free trade zone in an e-commerce environment?
An internal audit activity is piloting a data analytics model, which aims to identify anomalies in payments to vendors and potential fraud indicators Which of the following would be the most appropriate criteria for assessing the success of the piloted model?
Which of the following cost of capital methods identifies the time period required to recover the cost of the capital investment from the annual inflow produced?
Which of the following is a cybersecurity monitoring activity that involves assessing the strength of an organization ' s IT protection?
During a review of the accounts payable process, an internal auditor gathered all of the vendor payment transactions for the past 24 months. The auditor then used an analytics tool to identify the top five vendors that received the highest sum of payments.
Which of the following analytics techniques did the auditor apply?
Which of the following statements is true regarding the risks associated with the increased use of smart devices at work?
Which of the following accounting methods is an investor organization likely to use when buying 40 percent of the stock of another organization?
An internal auditor reviewed Finance Department records to obtain a list of current vendor addresses The auditor then compared the vendor addresses to a record of employee addresses maintained by the Payroll Department Which of the following types of data analysis did the auditor perform?
Which of the following is the first step an internal audit activity should undertake when executing a data analytics process?
Which of the following devices best controls both physical and logical access to information systems?
According to IIA guidance, which of the following is the correct order to conduct a business impact analysis (BIA) for the potential loss of an organization ' s network services ' '
1. identify resources and partners to provide required recovery services
2. Identify the business processes supporting the network functionality
3. Obtain approval of the BIA from the operating managers relative to their areas of responsibility
4. Identify the business impact if the network services cannot be performed
According to IIA guidance, which of the following statements is true regarding analytical procedures?
The management of working capital is most crucial for which of the following aspects of business?
At what stage of project integration management would a project manager and project management team typically coordinate the various technical and organizational interfaces that exist in the project?
During which of the following phases of contracting does the organization analyze whether the market is aligned with organizational objectives?
A chief audit executive wants to implement an enterprisewide resource planning software.
Which of the following internal audit assessments could provide overall assurance on the likelihood of the software implementation ' s success?
An internal auditor for a pharmaceutical company is planning a cybersecurity audit and conducting a risk assessment.
Which of the following would be considered the most significant cyber threat to the organization?
Which of the following attributes of data is the most significantly impacted by the internet of things?
Which of the following examples demonstrates that the internal audit activity uses descriptive analytics in its engagements?
The critical path for any project is the path that exhibits which of the following characteristics?
Which of the following data analytics tools would be applied by an internal audit activity positioned at the lowest level of maturity?
Technological uncertainty, subsidy, and spin-offs are usually characteristics of:
An organization allows employees to use mobile devices for business purposes.
Which of the following could cause decreased employee productivity in case of data loss?
Which of the following statements best describes the frameworks set forth by the International Standards Organization?
Which of the following strategies is most appropriate for an industry that is in decline?
The percentage of sales method, rather than the percentage of receivables method, would be used to estimate uncollectible accounts if an organization seeks to:
According to the Standards, the internal audit activity must evaluate risk exposures relating to which of the following when examining an organization ' s risk management process?
1) Organizational governance.
2) Organizational operations.
3) Organizational information systems.
4) Organizational structure.
Which of the following application-based controls is an example of a programmed edit check?
According to IIA guidance, which of the following is a typical risk associated with the tender process and contracting stage of an organization ' s IT outsourcing life cycle?
During a review of a web-based application used by customers to check the status of their bank accounts, it would be most important for the internal auditor to ensure that:
An internal auditor has been asked to conduct an investigation involving allegations of independent contractor fraud. Which of the following controls would be least effective in detecting any potential fraudulent activity?
In an organization where enterprise risk management practices are mature, which of the following is a core internal audit role?
Which of the following would best prevent unauthorized external changes to an organization ' s data?
The decision to implement enhanced failure detection and back-up systems to improve data integrity is an example of which risk response?
Which of the following conflict resolution methods should be applied when the intention of the parties is to solve the problem by clarifying differences and attaining everyone ' s objectives?
During the last year, an organization had an opening inventory of $300,000, purchases of $980,000, sales of $1,850,000, and a gross margin of 40 percent. What is the closing inventory if the periodic inventory system is used?
Which of the following statements is true regarding the use of public key encryption to secure data while it is being transmitted across a network?
When developing an effective risk-based plan to determine audit priorities, an internal audit activity should start by:
For a multinational organization, which of the following is a disadvantage of an ethnocentric staffing policy?
1) It significantly raises compensation and staffing costs.
2) It produces resentment among the organization ' s employees in host countries.
3) It limits career mobility for parent-country nationals.
4) It can lead to cultural myopia.
Which of the following statements regarding organizational governance is not correct?
Which of the following is a characteristic of just-in-time inventory management systems?
Which of the following is not a method for implementing a new application system?
According to IIA guidance, which of the following corporate social responsibility (CSR) evaluation activities may be performed by the internal audit activity?
1) Consult on CSR program design and implementation.
2) Serve as an advisor on CSR governance and risk management.
3) Review third parties for contractual compliance with CSR terms.
4) Identify and mitigate risks to help meet the CSR program objectives.
Which of the following purchasing scenarios would gain the greatest benefit from implementing electronic data interchange?
Which of the following is a type of network in which an organization permits specific users (such as existing customers) to have access to its internal network through the Internet by building a virtual private network?
During which phase of disaster recovery planning should an organization identify the business units, assets, and systems that are critical to continuing an acceptable level of operations?
Which of the following distinguishes the added-value negotiation method from traditional negotiating methods?
Which of the following is true regarding an organization ' s relationship with external stakeholders?
Which stage of group development is characterized by a decrease in conflict and hostility among group members and an increase in cohesiveness?
Which of the following roles would be least appropriate for the internal audit activity to undertake with regard to an organization ' s corporate social responsibility (CSR) program?
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?
Organizational activities that complement each other and create a competitive advantage are called a:
Which of the following techniques would be least effective in resolving the conflict created by an internal audit client ' s perception of the audit report as a personal attack on his management performance?
A department purchased one copy of a software program for internal use. The manager of the department installed the program on an office computer and then made two complete copies of the original software.
Copy 1 was solely for backup purposes.
Copy 2 was for use by another member of the department.
In terms of software licenses and copyright law, which of the following is correct?
Providing knowledge, motivating organizational members, controlling and coordinating individual efforts, and expressing feelings and emotions are all functions of:
An internal auditor is trying to assess control risk and the effectiveness of an organization ' s internal controls. Which of the following audit procedures would not provide assurance to the auditor on this matter?
Which of the following statements regarding database management systems is not correct?
TESTED 07 May 2026