EMT Practice Test

1. Question Content...

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Question1: An organization's board of directors is particularly focused on positioning the organization as a leader in the industry and beating the competition.
Which of the following strategies offers the greatest alignment with the board's focus?

Question2: Which of the following are the most appropriate measures for evaluating the change in an organization's liquidity position?

Question3: An employee's mobile device used for work was stolen in a home burglary.
Which control, if already implemented by the organization, would best prevent unauthorized access to organizational data stored on the employee's device?

Question4: 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?

Question5: 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?

Question6: According to the waterfall cycle approach to systems development, which of the following sequence of events is correct?

Question7: Which of the following borrowing options is an unsecured loan?

Question8: Which of following best demonstrates the application of the cost principle?

Question9: An organization suffered significant damage to its local file and application servers as a result of a hurricane. Fortunately, the organization was able to recover all information backed up by its overseas third-party contractor.
Which of the following approaches has been used by the organization?

Question10: Which of the following statements is true regarding a bring-your-own-device (BYOD) environment?

Question11: An organization had three large centralized divisions: one that received customer orders for service work; one that scheduled the service work at customer locations; and one that answered customer calls about service problems. These three divisions were restructured into seven regional groups, each of which performed all three functions. One advantage of this restructuring would be:

Question12: Which of the following IT-related activities is most commonly performed by the second line of defense?

Question13: Which of the following data security policies is most likely to be the result of a data privacy law?

Question14: Which of the following types of analytics focuses less on analysis and more on condensing data into mote meaningful pieces of information?

Question15: The most important reason to use risk assessment in audit planning is to:

Question16: Which of the following cost of capital methods identifies the time period required to recover the cost of the capital investment from the annual inflow produced?

Question17: Which of the following is a security feature that involves the use of hardware and software to fitter or prevent specific information from moving between the outside network and the outside network?

Question18: Which of the following performance measures disincentivizes engaging in earnings management?

Question19: Which of the following analytical techniques would an internal auditor use to verify that none of an organization's employees are receiving fraudulent invoice payments?

Question20: Which of the following best describes the primary objective of cybersecurity?

Question21: 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?

Question22: Which of the following best describes the concept of relevant cost?

Question23: 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?

Question24: 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?

Question25: A clothing company sells shirts for $8 per shirt. In order to break even, the company must sell 25,000 shirts. Actual sales total $300,000.
What is margin of safety sales for the company?

Question26: Which of the following is a strategy that organizations can use to stimulate innovation?
1) Source from the most advanced suppliers.
2) Establish employee programs that reward initiative.
3) Identify best practice competitors as motivators.
4) Ensure that performance targets are always achieved.

Question27: Which of the following techniques is the most relevant when an internal auditor conducts a valuation of an organization's physical assets?

Question28: Data encryption is an example of which of the following controls?

Question29: Which of the following would provide the most relevant assurance that the application under development will provide maximum value to the organization?

Question30: Which of the following statements are true regarding the use of heat maps as risk assessment tools?
1. They focus primarily on known risks, limiting the ability to identify new risks.
2. They rely heavily on objective assessments and related risk tolerances.
3. They are too complex to provide an easily understandable view of key risks.
4. They are helpful but limited in value in a rapidly changing environment.

Question31: The head of the research and development department at a manufacturing organization believes that his team lacks expertise in some areas, and he decides to hire more experienced researchers to assist in the development of a new product. Which of the following variances are likely to occur as the result of this decision?
1) Favorable labor efficiency variance.
2) Adverse labor rate variance.
3) Adverse labor efficiency variance.
4) Favorable labor rate variance.

Question32: A bank uses customer departmentalization to categorize its departments. Which of the following groups best exemplifies this method of categorization?

Question33: An internal audit activity is piloting a data analytics model, which aims to identify anomalies in payments to vendors and potential fraud indicators Which of the following would be the most appropriate criteria for assessing the success of the piloted model?

Question34: What must be monitored in order to manage risk of consumer product inventory obsolescence?
1) Inventory balances.
2) Market share forecasts.
3) Sales returns.
4) Sales trends.

Question35: 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.

Question36: Multinational organizations generally spend more time and effort to identify and evaluate:

Question37: Which of the following are included in ISO 31000 risk principles and guidelines?

Question38: When attempting to devise creative solutions to problems, team members initially should do which of the following?

Question39: Providing knowledge, motivating organizational members, controlling and coordinating individual efforts, and expressing feelings and emotions are all functions of:

Question40: Which of the following COSO internal control framework components encompasses establishing structures, reporting lines, authorities, and responsibilities?

Question41: Which mindset promotes the most comprehensive risk management strategy?

Question42: A manager at a publishing company received an email that appeared to be from one of her vendors with an attachment that contained malware embedded in an Excel spreadsheet. When the spreadsheet was opened, the cybercriminal was able to attack the company's network and gain access to an unpublished and highly anticipated book.
Which of the following controls would be most effective to prevent such an attack?

Question43: Which of the following security controls focuses most on prevention of unauthorized access to the power plant?

Question44: Which of the following is not a potential area of concern when an internal auditor places reliance on spreadsheets developed by users?

Question45: At a manufacturing plant, how would using Internet of Things during the production process benefit the organization?

Question46: Which stage of group development is characterized by a decrease in conflict and hostility among group members and an increase in cohesiveness?

Question47: When is an organic organizational structure likely to be more successful than a mechanistic organizational structure?

Question48: Which of the following is an element of effective negotiating?

Question49: What is the most significant potential problem introduced by just-in-time inventory systems?

Question50: Which of the following purchasing scenarios would gain the greatest benefit from implementing electronic data interchange?

Question51: An organization has an agreement with a third-party vendor to have a fully operational facility, duplicate of the original site and configured to the organization's needs, in order to quickly recover operational capability in the event of a disaster.
Which of the following best describes this approach to disaster recovery planning?

Question52: Which of the following distinguishes the added-value negotiation method from traditional negotiating methods?

Question53: Which of the following statements about market signaling is correct?
1) The organization releases information about a new product generation.
2) The organization limits a challenger's access to the best source of raw materials or labor.
3) The organization announces that it is fighting a new process technology.
4) The organization makes exclusive arrangements with the channels.

Question54: Which of the following is a logical access control designed to enhance the security of a computer-based application system?

Question55: A brand manager in a consumer food products organization suspected that several days of the point-of-sale data on the spreadsheet from one grocery chain were missing. The best approach for detecting missing rows in spreadsheet data would be to:

Question56: In an organization where enterprise risk management practices are mature, which of the following is a core internal audit role?

Question57: With regard to disaster recovery planning, which of the following would most likely involve stakeholders from several departments?

Question58: When would a contract be closed out?

Question59: With regard to project management when of the following statements about prefect crashing is true?

Question60: An organization accomplishes its goal to obtain a 40 percent share of the domestic market, but is unable to get the desired return on investment and output per hour of labor. Based on this information the organization is most likely focused on which of the following?

Question61: Which of the following is true of bond financing, compared to common stock, when all other variables are equal?

Question62: Which of the following characteristics applies to an organization that adopts a flat structure?

Question63: An internal auditor was asked to review an equal equity partnership In one sampled transaction Partner A transferred equipment into the partnership with a self-declared value of $10,000 and Partner B contributed equipment with a self-declared value of $15 000 The capital accounts of each partner were subsequently credited with S12,500. Which of the following statements is true regarding this transaction?

Question64: Which of the following is improved by the use of smart devices?

Question65: In an organization's established accounts payable department employees perform highly structured activities follow clearly defined procedures and have strict deadlines for performing their tasks The head of the department recently retired, and a new department head was hired To achieve the greatest benefit for this department and avoid redundancy the new leader should adopt which of the following leadership styles?

Question66: According to Maslow's hierarchy of needs theory, which of the Mowing best describes a strategy where a manager offers an assignment to a subordinate specifically to support his professional growth and future advancement?

Question67: 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?

Question68: 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?

Question69: According to the International Professional Practices Framework, internal auditors who are assessing the adequacy of organizational risk management processes should not:

Question70: Which of the following application controls verifies the accuracy of transaction results in a system?

Question71: Which of the following roles would be least appropriate for the internal audit activity to undertake with regard to an organization's corporate social responsibility (CSR) program?

Question72: Which of the following statements is true concerning the basic accounting treatment of a partnership?

Question73: Which of the following risks would involve individuals attacking an oil company's IT system as a sign of solidarity against drilling in a focal area?

Question74: Which of the following statements is true regarding change management?

Question75: An organization's headquarters is centrally located and the organization runs numerous computer applications in multiple sites. Which of the following would be the most appropriate approach for conducting an audit of the mainframe computer?

Question76: Which of the following network types should an organization choose if it wants to allow access only to its own personnel?

Question77: Which of the following is a disadvantage of selecting a commercial software package rather than developing an application internally?

Question78: Which of the following should be established by management during implementation of big data systems to enable ongoing production monitoring?

Question79: Within an enterprise, IT governance relates to the:
1) Alignment between the enterprise's IT long term plan and the organization's objectives.
2) Organizational structures of the company that are designed to ensure that IT supports the organization's strategies and objectives.
3) Operational plans established to support the IT strategies and objectives.
4) Role of the company's leadership in ensuring IT supports the organization's strategies and objectives.

Question80: According to the ISO 14001 standard, which of the following is not included in the requirements for a quality management system?

Question81: 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.

Question82: In terms of international business strategy, which of the following is true regarding a multi-domestic strategy?

Question83: Which of the following factors would reduce dissatisfaction for a management trainee but would not particularly motivate the trainee?

Question84: Which of the following financial instruments should be recorded at fair market value on the financial statements?

Question85: Which of the following best describes a market signal?

Question86: In accounting, which of the following statements is true regarding the terms debit and credit?

Question87: Senior management is trying to decide whether to use the direct write-off or allowance method for recording bad debt on accounts receivables.
Which of the following would be the best argument for using the direct write-off method?

Question88: 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?

Question89: Which of the following devices best controls both physical and logical access to information systems?

Question90: 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?

Question91: An internal auditor is assigned to perform data analytics. Which of the following is the next step the auditor should undertake after she has ascertained the value expected from the review?

Question92: Which type of bond sells at a discount from face value, then increases in value annually until it reaches maturity and provides the owner with the total payoff?

Question93: When management uses the absorption costing approach, fixed manufacturing overhead costs are classified as which of the following types of costs?

Question94: in which of the following technical infrastructure audits should attention be turned to physical security and environmental controls?

Question95: The chief audit executive (CAE) has embraced a total quality management approach to improving the internal audit activity's (IAA's) processes. He would like to reduce the time to complete audits and improve client ratings of the IAA.
Which of the following staffing approaches is the CAE most likely to select?

Question96: According to IIA guidance on IT. which of the following plans would pair the identification of critical business processes with recovery time objectives?

Question97: Which of the following conditions could lead an organization to enter into a new business through internal development rather than through acquisition?

Question98: The balanced scorecard approach differs from traditional performance measurement approaches because it adds which of the following measures?
1) Financial measures
2) Internal business process measures.
3) Client satisfaction measures
4) Innovation and learning measures

Question99: What would be the effect if an organization paid one of its liabilities twice during the year in error?

Question100: Which of the following IT controls includes protection for mainframe computers and workstations?

Question101: Which of the following statements about mentoring is true?
1) Mentoring can be used effectively for increasing employee retention
2) Mentoring can be used effectively in reducing employees frustration.
3) Mentoring can be used effectively for increasing organization communication.
4) Mentoring can be used effectively as a short term activity consisting of instruction and training

Question102: An organization is considering the outsourcing of its business processes related to payroll and information technology functions. Which of the following is the most significant area of concern for management regarding this proposed agreement?

Question103: All of the following are true with regard to the first-in, first-out inventory valuation method except:

Question104: Which of the following is true regarding the COSO enterprise risk management framework?

Question105: An internal auditor is assessing the risks related to an organization's mobile device pokey She notes that the organization allows third parties (vendors and visitors) to use outside smart devices to access its proprietary networks and systems Which of the following types of smart device risks should the internal auditor be most concerned about?

Question106: Which of the following would not impair the objectivity of internal auditor?

Question107: According to Porter, which of the following is associated with fragmented industries?

Question108: Which of the following is a characteristic of just-in-time inventory management systems?

Question109: Organizations use matrix management to accomplish which of the following?

Question110: Which of the following is the best example of a compliance risk that is likely to arise when adopting a bring-your-own-device (BYOD) policy?

Question111: During disaster recovery planning, the organization established a recovery point objective. Which of the following best describes this concept?

Question112: A bond that matures after one year has a face value of $250,000 and a coupon of $30,000. If the market price of the bond is $265,000, which of the following would be the market interest rate?

Question113: 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?

Question114: According to IIA guidance, which of the following statements is true regarding analytical procedures?

Question115: Which of the following performance measures includes both profits and investment base?

Question116: When using data analytics during a review of the procurement process, what is the first step in the analysis process?

Question117: Maintenance cost at a hospital was observed to increase as activity level increased. The following data was gathered:
Activity Level -
Maintenance Cost
Month
Patient Days
January
5,600
$7,900
February
7,100
$8,500
March
5,000
$7,400
April
6,500
$8,200
May
7,300
$9,100
June
8,000
$9,800
If the cost of maintenance is expressed in an equation, what is the independent variable for this data?

Question118: Which stage in the industry life cycle is characterized by many different product variations?

Question119: A company produces water buckets with the following costs per bucket:
Direct labor = $2
Direct material = $5
Fixed manufacturing = $3.50
Variable manufacturing = $2.50
The water buckets are usually sold for $15. However, the company received a special order for 50,000 water buckets at $11 each.
Assuming there is adequate manufacturing capacity and all other variables are constant, what is the relevant cost per unit to consider when deciding whether to accept this special order at the reduced price?

Question120: In which of the following scenarios would transfer pricing be used?

Question121: An organization's network administrator received an email that appeared to come from the organization's external IT service provider requesting his credentials to perform an update of a server operating system If the IT service provider did not send the email, which of the following best describes the likely purpose of the email?

Question122: Which of the following is a disadvantage in a centralized organizational structure?

Question123: Which of the following describes a typical desktop workstation used by most employees in their daily work?

Question124: 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?

Question125: Which of the following is an example of an application system control?

Question126: A rapidly expanding retail organization continues to be tightly controlled by its original small management team. Which of the following is a potential risk in this vertically centralized organization?

Question127: An internal audit manager is explaining to a newly hired staff auditor the various analytics techniques frequently used by the internal audit activity Which of the following statements is true regarding these analytics techniques?

Question128: 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?

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 strategies is most appropriate for an industry that is in decline?

Question131: During which phase of disaster recovery planning should an organization identify the business units, assets, and systems that are critical to continuing an acceptable level of operations?

Question132: Preferred stock is less risky for investors than is common stock because:

Question133: The economic order quantity for inventory is higher for an organization that has:

Question134: Which of the following factors is most responsible for the increasing risk that unauthorized parties may obtain or tamper with personal data?

Question135: According to IIA guidance, which of the following corporate social responsibility (CSR) activities is appropriate for the internal audit activity to perform?

Question136: A department purchased one copy of a software program for internal use. The manager of the department installed the program on an office computer and then made two complete copies of the original software.
Copy 1 was solely for backup purposes.
Copy 2 was for use by another member of the department.
In terms of software licenses and copyright law, which of the following is correct?

Question137: 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.

Question138: During which phase of the contacting process ate contracts drafted for a proposed business activity?

Question139: Which of the following is the most likely reason an organization may decide to undertake a stock split?

Question140: In mergers and acquisitions, which of the following is an example of a horizontal combination?

Question141: In an effort to increase business efficiencies and improve customer service offered to its major trading partners, management of a manufacturing and distribution company established a secure network, which provides a secure channel for electronic data interchange between the company and its partners.
Which of the following network types is illustrated by this scenario?

Question142: A software that translates hypertext markup language (HTML) documents and allows a user to view a remote web page is called:

Question143: Which of the following is a typical example of structured data?

Question144: Refer to the exhibit.
If the profit margin of an organization decreases, and all else remains equal, which of the following describes how the "Funds Needed" line in the graph below will shift?

Question145: Which of the following practices impacts copyright issues related to the manufacturer of a smart device?

Question146: An organization has a complex systems infrastructure consisting of multiple internally developed, off the shelf, and purchased but significantly customized applications. Some of these applications share databases or process data that is used by another stand-alone application, and interfaces have been written to move data between these applications as needed through batch processing Which of the following situations presents the greatest risk exposure given this environment?

Question147: Which of the following is not included in the process of user authentication?

Question148: Which of me following statements is most accurate concerning me management and audit of a web server?

Question149: The market price is the most appropriate transfer price to be charged by one department to another in the same organization for a service provided when:

Question150: During the last year, an organization had an opening inventory of $300,000, purchases of $980,000, sales of $1,850,000, and a gross margin of 40 percent. What is the closing inventory if the periodic inventory system is used?

Question151: 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:

Question152: An organization accumulated the following data for the prior fiscal year:
Value of Percentage of
Quarter
Output Produced
Cost X
1
$4,750,000
2.9
2
$4,700,000
3.0
3
$4,350,000
3.2
4
$4,000,000
3.5
Based on this data, which of the following describes the value of Cost X in relation to the value of Output Produced?

Question153: For employees, the primary value of implementing job enrichment is which of the following?

Question154: 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?

Question155: Which of the following is an example of a key systems development control typically found in the in-house development of an application system?

Question156: Which of the following is an example of a physical control designed to prevent security breaches?

Question157: If legal or regulatory standards prohibit conformance with certain parts of The IIA's Standards, the auditor should do which of the following?

Question158: Which of the following professional organizations sets standards for quality and environmental audits?

Question159: Which of the following is false with regard to Internet connection firewalls?

Question160: As it relates to the data analytics process, which of the following best describes the purpose of an internal auditor who cleaned and normalized data?

Question161: Refer to the exhibit.
The figure below shows the network diagram for the activities of a large project. What is the shortest number of days in which the project can be completed?

Question162: Which of me Wowing summarizes information about the cash receipts and cash payments for a specific time period?

Question163: At what stage of project integration management would a project manager and project management team typically coordinate the various technical and organizational interfaces that exist in the project?

Question164: An organization is experiencing a high turnover. Which of the following can human resources deploy to effectively detect the root cause of turnover?

Question165: Organizations mat adopt just-in-time purchasing systems often experience which of the following?

Question166: 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?

Question167: Which of the following is not a method for implementing a new application system?

Question168: International marketing activities often begin with:

Question169: Which of the following is a key characteristic of a zero-based budget?

Question170: Which of the following budgets must be prepared first?

Question171: Which of the following statements is correct regarding risk analysis?

Question172: Which of the following should internal auditors be attentive of when reviewing personal data consent and opt-in/opt-out management process?

Question173: 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:

Question174: Which of the following statements is true regarding the resolution of interpersonal conflict?

Question175: According to IIA guidance on IT which of the following best describes a but recovery and restore processes have not been defined?

Question176: 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?

Question177: An internationally recognized brand name is an entrance barrier to new competitors because new competitors would:

Question178: An organization has started allowing employees to use their personal smart devices to accept vendor payments. What should the organization's bring-your-own-device (BYOD) policy include to specifically address security and privacy required by the Payment Card Data Security Standard (PCI DSS)?

Question179: Which of the following accounting methods is an investor organization likely to use when buying 40 percent of the stock of another organization?

Question180: Which of the following is likely to occur when an organization decides to adopt a decentralized organizational structure?