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IIA Business Knowledge for Internal Auditing Sample Questions (Q140-Q145):

NEW QUESTION # 140
Assume that the average collection period is 25 days. After the credit policy is well established, what is the expected average accounts receivable balance for the entity at any moment in time, assuming a 365-day year?

  • A. US $684.93
  • B. US $1,808.22
  • C. US $27,123.30
  • D. US $45,205.48

Answer: D

Explanation:
The expected average accounts receivable balance equals the average collection period times the credit sales per day. Thus, the average accounts receivable balance is US $45.205.48 {[(10,000 units sold on credit x $66 price) - 365 days] x 25 days}. The foregoing calculation assumes that receivables are recorded at their gross amounts.


NEW QUESTION # 141
In terms of international business strategy, which of the following is true regarding a multi-domestic strategy?

  • A. It uses the same products in all countries.
  • B. It is an effective strategy when large differences exist between countries.
  • C. It provides cost advantages, improves coordinated activities, and speeds product development.
  • D. It centralizes control with little decision-making authority given to the local level.

Answer: B


NEW QUESTION # 142
According to IIA guidance, which of the following is an IT project success factor?

  • A. Inclusion of critical features, rather than inclusion of an array of supplementary features.
  • B. Focus on flexibility and adaptability, rather than use of a formal methodology.
  • C. Streamlined decision-making, rather than building consensus among users.
  • D. Consideration of the facts, rather than consideration of the emotions displayed by project stakeholders.

Answer: D


NEW QUESTION # 143
A bank was considering its first use of computer-aided software engineering CASE) to develop an inquiry system for account representatives to access consolidated profiles of customers' accounts. A benefit of using CASE in this situation is that:

  • A. No training of programmers would be required.
  • B. Management of the development process would be improved.
  • C. No new software development tools would be needed.
  • D. The need for testing would be reduced.

Answer: B

Explanation:
CASE applies computers to software design and development. It permits creation and maintenance of systems documentation on the computer and the automation of a part of the programming effort. Using CASE would improve management of the development process because the CASE software maintains the links between the different components,
provides built-in project management tools, and supplies automated testing aids.


NEW QUESTION # 144
The system requiring the most extensive backup and recovery procedures is a(n):

  • A. Indexed sequential access method file system for fixed asset accounting.
  • B. Batch system for payroll processing.
  • C. Database system for online order entry.
  • D. File-oriented system for billing clients.

Answer: C

Explanation:
Database systems require a more elaborate backup procedure than other systems. A database system for online entry would require almost continuous backup if data loss is to be minimized as transactions are processed on a continuous basis, and without tangible source documentation. Backup procedures that could be employed for online order entry include dual logging and rollback and recovery.


NEW QUESTION # 145
......

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