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IIA Business Knowledge for Internal Auditing Sample Questions (Q492-Q497):

NEW QUESTION # 492
The chief audit executive (CAE) has been asked to evaluate the chief technology officer's proposal to outsource several key functions in the organization's IT department. Which of the following would be the most appropriate action for the CAE to determine whether the proposal aligns with the organization's strategy?

A. Understand strategic context and evaluate whether supporting information is reliable and complete.
B. Perform a due diligence review or asses management's review of provider operations.
C. Identify key performance measures and data sources.
D. Ascertain whether governance and approval processes are transparent, documented, and completed.

Answer: B

NEW QUESTION # 493
The relationship between the present value of a future sum and the future value of a present sum can be expressed in terms of their respective interest factors the present value of US $200,000 due at the end of 8 years at 10% is US $93,300 what is the approximate future value of US $200,000 invested for the same length of time and at the same rate?

A. US $93,300
B. US $293,300
C. US $200,000
D. US $428,724

Answer: D

Explanation:
The interest factor for the future value of a present sum is equal to the reciprocal of the interest factor for the present value of a future sum. Thus, the future value is US $428,724 [($200,000 $93,300) x $200,000].

NEW QUESTION # 494
An entity changes its method of accounting for depreciation during the current year because it believes that the result will be reliable and more relevant information. In its financial statements for the year, how should the entity report the adjustment resulting from the change in accounting policy if the practicability criterion is met?

A. Reported as an adjustment to beginning retained earnings of the earliest period presented.
B. Included in the determination of profit or loss for the current period as a cumulative effect adjustment.
C. Not disclosed in the financial statements.
D. Disclosed as a separate type of depreciation expense, directly following depreciation expense for the current year.

Answer: A

Explanation:
Under IAS 8, Accounting Policies, Changes in Estimates and Accounting Errors, a voluntary change in accounting policy should be applied retrospectively unless any resulting adjustment that relates to prior periods is not reasonably determinable. Thus, if it is not impracticable to apply the new policy retroactively, the policy should be applied to comparative information as far back as practicable. The entity should determine the cumulative effect on the opening and closing balance sheets for the earliest period for which it is practicable to do so.

NEW QUESTION # 495
Which is the least effective form of risk management?

A. Systems-based preventive control.
B. Systems-based detective control.
C. People-based preventive control.
D. People-based detective control.

Answer: D

NEW QUESTION # 496
In regression analysis, which of the following correlation coefficients represents the strongest relationship between the independent and dependent variables?

A. -.02
B. 1.03
C. -.89
D. .75

Answer: C

Explanation:
Because the range of values is between-1 and 1.-89 suggests a very strong inverse relationship between the independent and dependent variables. A value of -1 signifies a
perfect inverse relationship, and a value of 1 signifies a perfect direct relationship.

NEW QUESTION # 497
......

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