IIA Certified Internal Auditor Part 3, Business Analysis and Information Technology Set 4

1.

Which of the following statements is true regarding the relationship between an individual's average tax rate and marginal tax rate?

In a regressive personal tax system, an individual's marginal tax rate is normally greater than his average tax rate. In a regressive personal tax system, an individual's marginal tax rate is normally equal to his average tax rate. In a progressive personal tax system, an individual's marginal tax rate is normally equal to his average tax rate. In a progressive personal tax system, an individual's marginal tax rate is normally greater than his average tax rate.

2.

An organization needs to borrow a large amount of cash to fund its expansion plan. Which of the following annual interest rates is least expensive?

7 percent simple interest with a 10 percent compensating balance. 7 percent simple interest paid at the end of each year. 7 percent discount interest. 7 percent compounding interest.

3.

Which of the following statements accurately describes one of the characteristics that distinguishes a multinational company from a domestic company?

A multinational company has stockholders in other countries. A multinational company exports its products to other countries. A multinational company operates outside of its country of origin. A multinational company uses raw materials and components from more than one country.

4.

Which of the following best describes an objective for an audit of an environmental management system?

To assess whether an annual control review is necessary. To determine conformance with requirements and agreements. To evaluate executive management oversight. To promote environmental awareness.

5.

Which of the following statements is true regarding the roles and responsibilities associated with a corporate social responsibility (CSR) program?

The board has overall responsibility for the internal control processes associated with the CSR program. Management has overall responsibility for the effectiveness of governance, risk management, and internal control processes associated with the CSR program. The internal audit activity is responsible for ensuring that CSR principles are integrated into the organization's policies and procedures. Every employee has a responsibility for ensuring the success of the organization's CSR objectives.

6.

Which of the following descriptions of the internal control system are indicators that risks are managed effectively?
1. Existing controls promote compliance with applicable laws and regulations.
2. The control environment is designed to address all identified risks to the organization.
3. Key controls for significant risks to the organization remain consistent over time.
4. Monitoring systems are in place to alert management to unexpected events.

1 and 3. 1 and 4. 2 and 3. 2 and 4.

7.

Which of the following is true regarding the COSO enterprise risk management framework?

The framework categorizes an organization's objectives to distinct, non overlapping objectives. Control environment is one of the framework's eight components. The framework facilitates effective risk management, even if objectives have not been established. The framework integrates with, but is not dependent upon, the corresponding internal control framework.

8.

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

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

9.

The economic order quantity can be calculated using the following formula: Which of the following describes how the optimal order size will change if the annual demand increases by 36 percent?

Decrease by about 17 percent. Decrease by about 7 percent. Increase by about 7 percent. Increase by about 17 percent.

10.

Which of the following statements best describes the frameworks set forth by the International Standards Organization?

Globally accepted standards for industries and processes. Bridging the gaps among control requirements, technical issues, and business risks. Practical guidance and benchmarks for all organizations that use information systems. Frameworks and guidance on enterprise risk management, internal control, and fraud deterrence.

IIA Certified Internal Auditor Part 3, Business Analysis and Information Technology Set 4

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IIA Certified Internal Auditor Part 3, Business Analysis and Information Technology Set 4

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