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IIA Business Knowledge for Internal Auditing Sample Questions (Q199-Q204):

NEW QUESTION # 199
According to IIA guidance on IT, which of the following would be considered a primary control for a spreadsheet to help ensure accurate financial reporting?

A. Check-in and check-out software is used to control versions.
B. Formulas and static data are locked or protected.
C. The purpose and use of the spreadsheet are documented.
D. The spreadsheet is stored on a network server that is backed up daily.

Answer: B

NEW QUESTION # 200
Which of the following inventory items would be the most frequently reviewed in an ABC inventory control system?

A. Expensive, frequently used, high stockout cost items with short lead times.
B. Expensive, frequently used, low stockout cost items with long lead times.
C. Expensive, frequently used, high stockout cost items with long lead times.
D. Inexpensive, frequently used, high stockout cost items with long lead times.

Answer: C

Explanation:
The ABC system is a method for controlling inventories that divides inventory items into three groups: Group A - high-monetary-value items, which account for a small portion (perhaps 10%) of the total inventory usage Group B-- medium-monetary-value items, which may account for about 20% of the total inventory items Group C -- low-monetary-value items, which account for the remaining 70% of sales or usage The ABC system permits the proper degree of managerial control to be identified and exercised over each group. Group A items are reviewed on a regular basis. Group B items may not have to be reviewed as often as group A items, but more often than group C items. For group C, extensive use of models and records is not cost effective. It is cheaper to order large quantities infrequently. The ABC method therefore reduces the safety-stock investment because high-value items are frequently monitored and medium-value items are monitored more often than inexpensive items. Frequent review can prevent stockouts and decrease inventory levels, and the cost of such review is minimized if it is limited to high- or medium-value items.

NEW QUESTION # 201
The economic order quantity is the size of the order that minimizes total inventory costs which include ordering and holding carrying) costs. It can be calculated using the formula

If Q = order size in units, D = annual demand in units, p = cost per purchase order, s = carrying cost per year for one unit of inventory. If the annual demand decreases by 369/o the optimal order size will:

A. Increase by 6%. Decrease by 6%.
B. Increase by 20°!a.
C. Decrease by 20%.

Answer: C

Explanation:
D decreases by 36%, that is, from 100% to 64%. Because .64 is the square of .8, the EOQ for 64D Q~) equals 80° a of the EOQ for D (Q).

NEW QUESTION # 202
In a product's life cycle, the first symptom of the decline stage is a decline in the:

A. Product's sales.
B. Firm's inventory levels.
C. Product's prices.
D. Product's production cost.

Answer: A

Explanation:
The sales of most product types and brands eventually decrease permanently. This decline may be slow or rapid. This first symptom of the decline stage of a product's life cycle triggers such other effects as price cutting, narrowing of the product line, and reduction in promotion budgets.

NEW QUESTION # 203
Which of the following physical access control is most likely to be based on ''something you have" concept?

A. A P3M code reader
B. A card-key scanner
C. A fingerprint scanner
D. A retina characteristics reader

Answer: B

NEW QUESTION # 204
......

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USE REAL IIA IIA-CIA-PART3 EXAM QUESTIONS AND ACHIEVE BRILLIANT RESULTS

Use Real IIA IIA-CIA-Part3 Exam Questions And Achieve Brilliant Results