An organization accumulated the following data for the prior fiscal year: Value of Percentage of Quarter Output Produced Cost X $4,750,000
2.9
$4,700,000
3.0
$4,350,000
3.2 $4,000,000
3.5
Based on this data, which of the following describes the value of Cost X in relation to the value of Output Produced?
A. Cost X is a variable cost.
B. Cost X is a fixed cost.
C. Cost X is a semi-fixed cost.
D. Cost X and the value of Output Produced are unrelated.
An organization's balance sheet indicates that the total asset amount and the total capital stock amount remained unchanged from one year to the next, and no dividends were declared or paid. However, the organization reported a loss of $200,000. Which of the following describes the most likely year-over-year change to the organization's total liabilities and total stockholder equity?
A. The total liabilities and total stockholder equity both increased.
B. The total liabilities and total stockholder equity both decreased.
C. The total liabilities decreased, and the total stockholder equity increased.
D. The total liabilities increased, and the total stockholder equity decreased.
Which of the following describes the result if an organization records merchandise as a purchase, but fails to include it in the closing inventory count?
A. The cost of goods sold for the period will be understated.
B. The cost of goods sold for the period will be overstated.
C. The net income for the period will be understated.
D. There will be no effect on the cost of goods sold or the net income for the period.
Which of the following application-based controls is an example of a programmed edit check?
A. Reasonableness check.
B. Transaction log.
C. Input error correction.
D. Authorization for access.
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.
Assesstheeffectsofnewtechnologyontheorganization'sIToperations.
4.
Provide broad oversight of implementation, training, and operation of new systems.
A. 1, 2, and 3
B. 1, 2, and 4
C. 1, 3, and 4
D. 2, 3, and 4
Which of the following is always true regarding the use of encryption algorithms based on public key infrastructure (PKI)?
A. PKI uses an independent administrator to manage the public key.
B. The public key is authenticated against reliable third-party identification.
C. PKI's public accessibility allows it to be used readily for e-commerce.
D. The private key uniquely authenticates each party to a transaction.
Which of the following most accurately describes the purpose of application authentication controls?
A. To ensure that data input into business applications is valid, complete, and accurate.
B. To prevent or detect errors in data processed using business applications.
C. To ensure that business applications are protected from unauthorized logical access.
D. To ensure the validity, accuracy, and completeness of outputs from business applications.
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. The auditor should focus on the audit client as a person and understand him, rather than just concentrating on the problem.
B. The auditor should make recommendations based on objective criteria, rather than based on a subjective assessment.
C. The auditor should explore alternative solutions to address the audit problem, so the audit client has options.
D. The auditor should take a flexible position on the recommendations and focus on resolving the issue by addressing the interests of the people concerned.
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. Toincrease shareholders' equity.
D. To enhance the stock liquidity.
Which of the following is the best approach to overcome entry barriers into a new business?
A. Offer a standard product that is targeted in the recognized market.
B. Invest in commodity or commodity-like product businesses.
C. Enter into a slow-growing market.
D. Use an established distribution relationship.
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