Question 1

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?

Options :

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.

Answer: B

Question 2

Which of the following is a characteristic of just-in-time inventory management systems?

Options :

A : Users determine the optimal level of safety stocks.

B : They are applicable only to large organizations.

C : They do not really increase overall economic efficiency because they merely shift inventory levels further up the supply chain.

D : They rely heavily on high quality materials.

Answer: D

Question 3

Which of the following would be the most important consideration by the internal audit activity when selecting employees to perform an internal quality assessment?

Options :

A : Their understanding of auditing standards.

B : Previous experience working with the internal audit activity.

C : Their reporting line within the organization.

D : The nature of their regular duties and responsibilities.

Answer: A

Question 4

Which of the following controls could an internal auditor reasonably conclude is effective by observing the physical controls of a large server room?

Options :

A : Adequate signs are in place to assist in locating safety equipment.

B : Servers are secured individually to their racks by locks.

C : Foam fire extinguishers are operable to protect against electrical fires.

D : Swipe card access is required to gain access to the server room.

Answer: A

Question 5

Which of the following is an example of a physical security control that should be in place at an organization's data center?

Options :

A : Backup servers in the data center are stored in an environmentally controlled location

B : All users have a unique ID and password to access data

C : Swipe cards are used to access the data center

D : Firewalls and antivirus protection are in place to prevent unauthorized access to data.

Answer: C

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