EMT Practice Test

1. Question Content...

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Question1: According to IIA guidance, which of the following would be the best first step to manage risk when a third party is overseeing the organization's network and data?

Question2: Which of the following factors is most responsible for the increasing risk that unauthorized parties may obtain or tamper with personal data?

Question3: Which of the following is not a common feature of cumulative preferred stock?

Question4: Which audit approach should be employed to test the accuracy of information housed in a database on an un-networked computer?

Question5: Providing knowledge, motivating organizational members, controlling and coordinating individual efforts, and expressing feelings and emotions are all functions of:

Question6: When using data analytics during a review of the procurement process what is the first step in the analysis process?

Question7: Which of the following methods is most closely associated to year over year trends?

Question8: When attempting to devise creative solutions to problems, team members initially should do which of the following?

Question9: According to IIA guidance, which of the following statements is true regarding analytical procedures?

Question10: Which of the following purchasing scenarios would gain the greatest benefit from implementing electronic data interchange?

Question11: A large hospital has an existing contract with a vendor in another country to provide software support and maintenance of the hospital's patient records information system. From the hospital management's perspective, which of the following controls would be most effective to address privacy risks related to this outsourcing arrangement?

Question12: An organization decided to install a motion detection system in its warehouse to protect against after-hours theft. According to the COSO enterprise risk management framework, which of the following best describes this risk management strategy?

Question13: Which of the following factors is considered a disadvantage of vertical integration?

Question14: During a review of a web-based application used by customers to check the status of their bank accounts, it would be most important for the internal auditor to ensure that:

Question15: Which of the following is a logical access control designed to enhance the security of a computer-based application system?

Question16: When developing an effective risk-based plan to determine audit priorities, an internal audit activity should start by:

Question17: Organizational activities that complement each other and create a competitive advantage are called a:

Question18: Which of the following budgets must be prepared first?

Question19: According to the waterfall cycle approach to systems development, which of the following sequence of events is correct?

Question20: Which of the following statements is true regarding cybersecurity risk?

Question21: Which of the following is an element of effective negotiating?

Question22: According to IIA guidance, which of the following would be a primary reason for an internal auditor to test the organization's IT contingency plan?

Question23: An organization invests excess snort-term cash in trading securities. When of the following actions should an internal auditor take to test the valuation of those securities?

Question24: Which of the following standards would be most useful in evaluating the performance of a customer-service group?

Question25: Which of the following is a characteristic of using a hierarchical control structure?

Question26: The main reason to establish internal controls in an organization is to:

Question27: The greatest advantage of functional departmentalization is that it:

Question28: An internal auditor has been asked to conduct an investigation involving allegations of independent contractor fraud. Which of the following controls would be least effective in detecting any potential fraudulent activity?

Question29: According to IIA guidance, which of the following steps are most important for an internal auditor to perform when evaluating an organization's social and environmental impact on the local community?
1) Determine whether previous incidents have been reported, managed, and resolved.
2) Determine whether a business contingency plan exists.
3) Determine the extent of transparency in reporting.
4) Determine whether a cost/benefit analysis was performed for all related projects.

Question30: According to Porter's model of competitive strategy, which of the following is a generic strategy?
1 Differentiation.
2) Competitive advantage.
3) Focused differentiation.
4) Cost focus.

Question31: Which of me following storage options would give the organization the best chance of recovering data?

Question32: Which of the following is most important for an internal auditor to check with regard to the database version?

Question33: Which of the following factors would reduce dissatisfaction for a management trainee but would not particularly motivate the trainee?

Question34: Which of the following security controls focuses most on prevention of unauthorized access to the power plant?

Question35: Which of the following would best prevent unauthorized external changes to an organization's data?

Question36: The board has requested that the internal audit activity be involved in all phases of the organization's outsourcing of its network management. During which of the following stages is the internal auditor most likely to verify that the organization's right-to-audit clause is drafted effectively?

Question37: When auditing an application change control process, which of the following procedures should be included in the scope of the audit?
1) Ensure system change requests are formally initiated, documented, and approved.
2) Ensure processes are in place to prevent emergency changes from taking place.
3) Ensure changes are adequately tested before being placed into the production environment.
4) Evaluate whether the procedures for program change management are adequate.

Question38: A multinational organization has multiple divisions that sell their products internally to other divisions. When selling internally, which of the following transfer prices would lead to the best decisions for the organization?

Question39: An internal auditor is reviewing results from software development integration testing. What is the purpose of integration testing?

Question40: Which of the following is a major advantage of decentralized organizations, compared to centralized organizations?

Question41: What are the objectives of governance as defined by the Standards?

Question42: When applied to international economics, the theory of comparative advantage proposes that total worldwide output will be greatest when:

Question43: Which of the following is the best reason for considering the acquisition of a nondomestic organization?

Question44: Which of the following techniques would be least effective in resolving the conflict created by an internal audit client's perception of the audit report as a personal attack on his management performance?

Question45: The economic order quantity can be calculated using the following formula:
Which of the following describes how the optimal order size will change if the annual demand increases by 36 percent?

Question46: Which of the following types of data analytics would be used by a hospital to determine which patients are likely to require readmittance for additional treatment?

Question47: Under a value-added taxing system:

Question48: According to IIA guidance on IT auditing, which of the following would not be an area examined by the internal audit activity?

Question49: Which of the following is a primary objective of the theory of constraints?

Question50: Which of me following is applicable to both a job order cost system and a process cost system?

Question51: An organization with an annual demand of 25.000 units correctly computes its economic order quantity to be
1,000 units Its safety stock is 300 units and the lead time is two days If there are 250 production days in a year what is the reorder point1?

Question52: According to the Standards, which of the following is based on the assertion that the quality of an organization's risk management process should improve with time?

Question53: Which of the following price adjustment strategies encourages prompt payment?

Question54: In which type of business environment are price cutting strategies and franchising strategies most appropriate?

Question55: Which of the following statements is true regarding the capital budgeting procedure known as discounted payback period?

Question56: Which of the following is true regarding the COSO enterprise risk management framework?

Question57: Which of the following statements regarding program change management is not correct?

Question58: Which of the following is not a barrier to effective communication?

Question59: The activity that involves a trial run of a product in a typical segment of the market before proceeding to a national launch is referred to as:

Question60: In the current year, a merchandising organization had an inventory turnover ratio of 3.0, which was less than the industry average of 6.5. Which of the following offers the most likely explanation for this difference?

Question61: Which of the following types of analytics would be used by an organization to examine metrics by business units and identity the most profitable business units?

Question62: The following transactions and events occurred during the year:
- $300,000 of raw materials were purchased, of which $20,000 were returned because of defects
- $600,000 of direct labor costs were incurred.
- S750.000 of manufacturing overhead costs were incurred.
What is the organization's cost of goods sold for the year?

Question63: Which of the following is a characteristic of just-in-time inventory management systems?

Question64: All of the following are true with regard to the first-in, first-out inventory valuation method except:

Question65: At what point during the systems development process should an internal auditor verify that the new application's connectivity to the organization's other systems has been established correctly?

Question66: Technological uncertainty, subsidy, and spin-offs are usually characteristics of:

Question67: Which is the least effective form of risk management?

Question68: Which of the following is an example of a physical control?

Question69: Which of the following statements accurately describes the responsibility of the internal audit activity (IAA) regarding IT governance?
1) The IAA does not have any responsibility because IT governance is the responsibility of the board and senior management of the organization.
2) The IAA must assess whether the IT governance of the organization supports the organization's strategies and objectives.
3) The IAA may assess whether the IT governance of the organization supports the organization's strategies and objectives.
4) The IAA may accept requests from management to perform advisory services regarding how the IT governance of the organization supports the organization's strategies and objectives.

Question70: Which of the following best demonstrates an organization's ability to recover from a disaster?

Question71: Which of the following application controls checks the integrity of data entered into a business application?

Question72: Which of the following is classified as a product cost using the variable costing method?
1) Direct labor costs
2) Insurance on a factory.
3) Manufacturing supplies.
4) Packaging and shipping costs

Question73: A retail organization is considering acquiring a composite textile company. The retailer's due diligence team determined the value of the textile company to be $50 million. The financial experts forecasted net present value of future cash flows to be $60 million. Experts at the textile company determined their company's market value to be $55 million if purchased by another entity. However, the textile company could earn more than $70 million from the retail organization due to synergies. Therefore, the textile company is motivated to make the negotiation successful. Which of the following approaches is most likely to result in a successful negotiation?

Question74: According to MA guidance on IT. which of the following best describes a logical access control?

Question75: The leadership of an organization encourages employees to form voluntary problem-solving groups whereby several employees from the same work area meet regularity during work hours to discuss improvements and creative ways to reduce costs. Which of the following best describes this approach?

Question76: An organization requires an average of 58 days to convert raw materials into finished products to sell. An average of 42 additional days is required to collect receivables. If the organization takes an average of 10 days to pay for the raw materials, how long is its total cash conversion cycle?

Question77: Management has established a performance measurement focused on the accuracy of disbursements The disbursement statistics, provided daily to all accounts payable and audit staff, include details of payments stratified by amount and frequency Which of the following is likely to be the greatest concern regarding this performance measurement?

Question78: Which of the following network types should an organization choose if it wants to allow access only to its own personnel?

Question79: Which of me following responsibilities would ordinary fall under the help desk function of an organization?

Question80: Which of the following is an example of a physical security control that should be in place at an organization's data center?

Question81: Which of the following costs would be incurred in an inventory stockout?

Question82: Which of the following statements is true regarding the "management-by-objectives" method?

Question83: Which stage in the industry life cycle is characterized by many different product variations?

Question84: Based on lest results an IT auditor concluded that the organization would suffer unacceptable toss of data if there was a disaster at its data center. Which of the following test results would likely lead the auditor to this conclusion?

Question85: In mergers and acquisitions, which of the following is an example of a horizontal combination?

Question86: Which of the following accounting methods is an investor organization likely to use when buying 40 percent of the stock of another organization?

Question87: Which of the following is an example of a key systems development control typically found in the in-house development of an application system?

Question88: Senior management has decided to implement the Three Lines of Defense model for risk management. Which of the following best describes senior management's duties with regard to this model?

Question89: Unsecured loans are loans:

Question90: A company's financial balance sheet is presented below:
The company has net working capital of:

Question91: A chief audit executive (CAE) was asked to participate in the selection of an external auditor. Which of the following would not be a typical responsibility for the CAE?

Question92: 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.

Question93: Which of the following factors is most likely to lead to a lack of cohesiveness in a project team?

Question94: Which of the following statements about matrix organizations is false?

Question95: Which of the following risks is best addressed by encryption?

Question96: Which of the following are appropriate functions for an IT steering committee?
1) Assess the technical adequacy of standards for systems design and programming.
2) Continually monitor of the adequacy and accuracy of software and hardware in use.
3) Assess the effects of new technology on the organization`s IT operations.
4) Provide broad oversight of implementation, training, and operation of new systems.

Question97: Which of the following best describes the purpose of disaster recovery planning?

Question98: An internal auditor is evaluating an organization's business continuity management program According to the guidance on IT. which of the following tests would best demonstrate the ability to perform Key processes without significant problems?

Question99: Which of the following is improved by the use of smart devices?

Question100: In the years after the mind-service point of a depreciable asset which of the following depreciation methods will result in the highest depreciation expense?

Question101: Which of the following corporate social responsibility strategies is likely to be most effective in minimizing confrontations with influential activists and lobbyists?

Question102: Which of the following are included in ISO 31000 risk principles and guidelines?

Question103: Presented below are partial year-end financial statement data (000 omitted from dollar amounts) for companies A and B:
If company A has a quick ratio of 2:1, then it has an accounts receivable balance of:

Question104: According to MA guidance, which of the following best describes an adequate management (audit) trail application control for the general ledger?

Question105: Which of the following phases of a business cycle are marked by an underuse of resources?
1) The trough.
2) The peak.
3) The recovery.
4) The recession.

Question106: An organization recently documented its procedures for recovering systems and data after a disaster How are these documented procedures most likely to be used during a disaster simulation exercise?

Question107: A manager has allowed a subordinate employee to have greater control and responsibility over the tasks that he performs. This is an example of which of the following?

Question108: A multinational organization involved in online business has planned to set up a help desk service. Which of the following best describes the role performed by the help desk?

Question109: New data privacy laws require an organization to use collected customer information for me sole purpose of meeting the organization's business requirements. Which of the following best addresses the risk of the organization not complying with this objective?

Question110: The economic order quantity for inventory is higher for an organization that has:

Question111: Which of the following statements is true regarding partnership liquidation?

Question112: Which of the following is a primary driver behind the creation and prioritization of new strategic initiatives established by an organization?

Question113: The percentage of sales method, rather than the percentage of receivables method, would be used to estimate uncollectible accounts if an organization seeks to:

Question114: An organization's balance sheet indicates that the total asset amount and the total capital stock amount remained unchanged from one year to the next, and no dividends were declared or paid. However, the organization reported a loss of $200,000. Which of the following describes the most likely year-over-year change to the organization's total liabilities and total stockholder equity?

Question115: Which of the following strategies is most appropriate for an industry that is in decline?

Question116: Which of the following should be established by management during implementation of big data systems to enable ongoing production monitoring?

Question117: Organization X owns a 38 percent equity stake in Organization Y.
Which of the following statements is true regarding the financial treatment for this relationship?

Question118: Which of the following must be adjusted to index a progressive tax system to inflation?

Question119: Which of the following is true regarding an organization's relationship with external stakeholders?

Question120: Which of the following is an example of an application control?

Question121: According to IIA guidance, which of the following is the correct order to conduct a business impact analysis (BIA) for the potential loss of an organization's network services''
1. identify resources and partners to provide required recovery services
2. Identify the business processes supporting the network functionality
3. Obtain approval of the BIA from the operating managers relative to their areas of responsibility
4. Identify the business impact if the network services cannot be performed

Question122: During an audit of the organization's annual financial statements, the internal auditor notes that the current cost of goods sold percentage is substantially higher than in prior years. Which of the following is the most likely explanation for this increase?

Question123: While auditing an organization's customer call center, an internal auditor notices that key performance indicators show a positive trend despite the fact that there have been increasing customer complaints over the same period Which of the following audit recommendations would most likely correct the cause of this inconsistency?

Question124: Which of the following steps should an internal auditor take during an audit of an organization's business continuity plans?
1) Evaluate the business continuity plans for adequacy and currency.
2) Prepare a business impact analysis regarding the loss of critical business.
3) Identify key personnel who will be required to implement the plans.
4) Identify and prioritize the resources required to support critical business processes.

Question125: Which of the following describes a typical desktop workstation used by most employees in their daily work?

Question126: Which of the following application controls can be defined as controls that monitor data Being processed and in storage to ensure it remains consistent and correct?

Question127: According to the ISO 14001 standard, which of the following is not included in the requirements for a quality management system?

Question128: A restaurant deeded to expand its business to include delivery services rather than relying on third-party food delivery services. Which of the following best describes the restaurant's strategy?

Question129: Which of the following re a result of implementing an e-commerce system, which relies heavily on electronic data interchange and electronic funds transfer, for purchasing and billing?

Question130: Which of the following statements is correct regarding corporate compensation systems and related bonuses?
1) A bonus system should be considered part of the control environment of an organization and should be considered in formulating a report on internal control.
2) Compensation systems are not part of an organization's control system and should not be reported as such.
3) An audit of an organization's compensation system should be performed independently of an audit of the control system over other functions that impact corporate bonuses.

Question131: A small furniture-manufacturing firm with 100 employees is located in a two-story building and does not plan to expand. The furniture manufactured is not special-ordered or custom-made. The most likely structure for this organization would be:

Question132: Which of the following is an example of a risk avoidance response?

Question133: The mobility of personal smart devices significantly increases which of the following risks?

Question134: Which of the following should an organization consider when developing strategic objectives for its business processes?
1) Contribution to the success of the organization.
2) Reliability of operational information.
3) Behaviors and actions expected of employees.
4) How inputs combine with outputs to generate activities.

Question135: What is the most significant potential problem introduced by just-in-time inventory systems?

Question136: An organization uses the management-by-objectives method, whereby employee performance is based on defined goals Which of the following statements is true regarding this approach?

Question137: The audit committee of a global corporation has mandated a change in the organization's business ethics policy. Which of the following approaches describes the best way to accomplish the policy's diffusion worldwide?

Question138: Which of the following does not provide operational assurance that a computer system is operating properly?

Question139: An internal auditor performed a review of IT outsourcing and found that the service provider was failing to meet the terms of the service level agreement. Which of the following approaches is most appropriate to address this concern?

Question140: Which of the following IT operational areas is responsible for the integrity of data flow within an organization?

Question141: An organization uses a database management system (DBMS) as a repository for data. The DBMS, in turn, supports a number of end-user developed applications which were created using fourth-generation programming languages. Some of the applications update the database. Which of the following is the most important control related to the integrity of the data in the database?

Question142: Multinational organizations generally spend more time and effort to identify and evaluate:

Question143: Which of the following statements is false regarding the internal audit approach when a set of standards other than The IIA's Standards is applicable to a specific engagement?

Question144: Which of the following application controls verifies the accuracy of transaction results in a system?

Question145: An organization facing rapid growth decides to employ a third party service provider to manage its customer relationship management function. Which of the following is true regarding the supporting application software used by that provider compared to an in-house developed system?
1) Updating documentation is always a priority.
2) System availability is usually more reliable.
3) Data security risks are lower.
4) Overall system costs are lower.

Question146: Which of the following is a key characteristic of a zero-based budget?

Question147: According to the International Professional Practices Framework, internal auditors who are assessing the adequacy of organizational risk management processes should not:

Question148: What would be the effect if an organization paid one of its liabilities twice during the year in error?

Question149: An organization has a total asset turnover of 3.0 times and a total debt-to-total assets ratio of 80 percent. If the organization has total debt of $1 000 000 what is the organization's sales level?

Question150: When using cost-volume-profit analysts which of the following will increase operating income once the break-even point has been reached?

Question151: An internal auditor discovered that several unauthorized modifications were made to the production version of an organization's accounting application. Which of the following best describes this deficiency?