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IIA Business Knowledge for Internal Auditing Sample Questions (Q74-Q79):

NEW QUESTION # 74
Which of the following describes a typical desktop workstation used by most employees in their daily work?

A. Workstation contains software that manages user's access and processing of stored data on the organization's network.
B. Workstation contains software that controls information flow between the organization's network and the Internet.
C. Workstation contains software that enables the processing of transactions and is not shared among users of the organization's network.
D. Workstation contains software that prevents unauthorized transmission of information into and out of the organization's network.

Answer: C

NEW QUESTION # 75
What should the company focus on to achieve quality more economically?

A. Prevention costs.
B. External failure costs.
C. Internal failure costs.
D. Appraisal costs.

Answer: A

Explanation:
Prevention attempts to avoid defective output. Prevention costs include preventive maintenance, employee training, review of equipment design, and evaluation of suppliers. Prevention is less costly than detection and correction of defective output.

NEW QUESTION # 76
Refer to the exhibit.

If the profit margin of an organization decreases, and all else remains equal, which of the following describes how the "Funds Needed" line in the graph below will shift?

A. The "Funds Needed" line will point downward with a minimal slope.
B. The "Funds Needed" line will point downward with an extreme slope.
C. The "Funds Needed" line will remain pointed upward, but will become less steep.
D. The "Funds Needed" line will remain pointed upward, but will become more steep.

Answer: D

NEW QUESTION # 77
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?

A. Concurrency update controls are in place.
B. End-user applications are developed on personal computers before being implemented on the mainframe.
C. A hierarchical database model is adopted so that multiple users can be served at the same time.
D. End users have their read-only applications approved by the information systems department before accessing the database.

Answer: A

NEW QUESTION # 78
The following information is available for an entity for the quarter ended March 31 of the current year:

The gross profit margin is normally 200 of sales. What is the estimated cost of the merchandise inventory at March 31 of the current year?

A. US $60.000
B. US $40,000
C. US $180,000
D. US $20,000

Answer: A

Explanation:
The gross profit margin percentage is given as 20% of sales. Hence, cost of goods sold must have been US $160,000 [$:4110,000 sales x1_0 - 2)]. The estimated cost of the inventory at March 31 is computed as follows:

An entity had the following opening and closing inventory balances during the current

The following transactions and events occurred during the current year:
US $300,000 of raw materials were purchased, of which US $20,000 were returned
because of defects. US $600,000 of direct labor costs were incurred.
US $750,000 of production overhead costs were incurred.

NEW QUESTION # 79
......

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