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1:20 pm 29 January 2020

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Question No. 1

Which of the following are typical audit considerations for a review of authentication?

1. Authentication policies and evaluation of controls transactions.

2. Management of passwords, independent reconciliation, and audit trail.

3. Control self-assessment tools used by management.

4. Independent verification of data integrity and accuracy.

A. 1, 2, and 3
B. 1, 2, and 4
C. 1, 3, and 4
D. 2, 3, and 4

Answer: A

Question No. 2

Which of the following conditions could lead an organization to enter into a new business through internal development rather than through acquisition?

A. It is expected that there will be slow retaliation from incumbents.
B. The acquiring organization has information that the selling organization is weak.
C. The number of bidders to acquire the organization for sale is low.
D. The condition of the economy is poor.

Answer: A

Question No. 3

Which of the following factors is considered a disadvantage of vertical integration?

A. It may reduce the flexibility to change partners.
B. It may not reduce the bargaining power of suppliers.
C. It may limit the organization's ability to differentiate the product.
D. It may lead to limited control of proprietary knowledge.

Answer: A

Question No. 4

Which of the following is a key characteristic of a zero-based budget?

A. A zero-based budget provides estimates of costs that would be incurred under different levels of activity.
B. A zero-based budget maintains focus on the budgeting process.
C. A zero-based budget is prepared each year and requires each item of expenditure to be justified.
D. A zero-based budget uses input from lower-level and middle-level managers to formulate budget plans.

Answer: C

Question No. 5

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?

A. Review and acquire the external audit service.
B. Assess the appraisal and actuarial services.
C. Determine the selection criteria.
D. Identify regulatory requirements to be considered.

Answer: D

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