EMT Practice Test

1. Question Content...

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Question1: Which of the following is a disadvantage of selecting a commercial software package rather than developing an application internally?

Question2: Which of the following statements is correct regarding risk analysis?

Question3: Which of the following are appropriate reasons for internal auditors to document processes as part of an audit engagement?
1. To determine areas of primary concern.
2. To establish a standard format for process mapping.
3. To define areas of responsibility within the organization.
4. To assess the performance of employees.

Question4: 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?

Question5: What are the objectives of governance as defined by the Standards?

Question6: Which of the following costs would be incurred in an inventory stockout?

Question7: Which of the following control techniques would minimize the risk of interception during transmission in an electronic data interchange system?
1. Encryption.
2. Traffic padding.
3. Edit checks.
4. Structured data format.

Question8: Which of the following is an example of an application system control?

Question9: 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?

Question10: Which of the following is not a barrier to effective communication?

Question11: Which of the following stages of contracting focuses on aligning the markets with objectives of the organization?

Question12: According to MA guidance, which of the following best describes an adequate management (audit) trail application control for the general ledger?

Question13: Which of the following is the first step an internal audit activity should undertake when executing a data analytics process'?

Question14: The economic order quantity for inventory is higher for an organization that has:

Question15: According to IIA guidance on IT auditing, which of the following would not be an area examined by the internal audit activity?

Question16: 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?

Question17: 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^

Question18: 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?

Question19: 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?

Question20: The internal audit activity completed an initial risk analysis of the organization's data storage center and found several areas of concern. Which of the following is the most appropriate next step?

Question21: Which of the following is the most effective control to prevent unauthorized entrance of a former employee of the organization?

Question22: Which of the following is a characteristic of an emerging industry?

Question23: Which of the following are the most appropriate measures for evaluating the change in an organization's liquidity position?

Question24: Division A produces a product with a variable cost of $5 per unit and an allocated fixed cost of S3 per unit The market price of the product is S15 plus 20 percent selling cost. Division B currently purchases this product from an external supplier but is going to purchase it from division A for S18 Which of the following methods of transfer pricing is being used?

Question25: All of the following are true with regard to the first-in, first-out inventory valuation method except:

Question26: Which of the following borrowing options is an unsecured loan?

Question27: Which of the following best describes the concept of relevant cost?

Question28: In an organization where enterprise risk management practices are mature, which of the following is a core internal audit role?

Question29: 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?

Question30: Which of the following statements is true regarding the relationship between an individual's average tax rate and marginal tax rate?

Question31: Which of the following is useful for forecasting the required level of inventory?
1. Statistical modeling.
2. Information about seasonal variations in demand.
3. Knowledge of the behavior of different business cycles.
4. Pricing models linked to seasonal demand.

Question32: Which of the following are included in ISO 31000 risk principles and guidelines?

Question33: How do data analysis technologies affect internal audit testing?

Question34: Which of the following statements best describes the frameworks set forth by the International Standards Organization?

Question35: 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.

Question36: Which of the following best describes the purpose of disaster recovery planning?

Question37: Which of the following is an example of a phishing attack?

Question38: Which of the following is a primary driver behind the creation and prioritization of new strategic initiatives established by an organization?

Question39: Which of the following statements is true regarding outsourced business processes?

Question40: International marketing activities often begin with:

Question41: Which of the following is the most appropriate test to assess the privacy risks associated with an organization's workstations?

Question42: Which of the following professional organizations sets standards for quality and environmental audits?

Question43: Which of the following budgets must be prepared first?

Question44: When granting third parties temporary access to an entity's computer systems, which of the following is the most effective control?

Question45: 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?

Question46: 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.

Question47: 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.

Question48: 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?

Question49: 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

Question50: 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
Incurred
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?

Question51: Which of the following techniques is the most relevant when an internal auditor conducts a valuation of an organization's physical assets?

Question52: Which of the following statements regarding organizational governance is not correct?

Question53: Which of the following best describes a market signal?

Question54: Which of the following is most important for an internal auditor to check with regard to the database version?

Question55: 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?

Question56: Data encryption is an example of which of the following controls?

Question57: Which of the following actions is most likely to gain support for process change?

Question58: Which stage in the industry life cycle is characterized by many different product variations?

Question59: Which of the following must be adjusted to index a progressive tax system to inflation?

Question60: According to MA guidance, which of the following would indicate poor change management control?
1. Low change success rate
2. Occasional planned outages
3. Low number of emergency changes.
4. Instances of unauthorized changes

Question61: When applied to international economics, the theory of comparative advantage proposes that total worldwide output will be greatest when:

Question62: Which of the following financial instruments should be recorded at fair market value on the financial statements?

Question63: 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?

Question64: Providing knowledge, motivating organizational members, controlling and coordinating individual efforts, and expressing feelings and emotions are all functions of:

Question65: 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?

Question66: Which of the following characteristics is most important specifically for a global manager to possess in order to be successful?

Question67: Which of the following is an example of a risk avoidance response?

Question68: Which of the following conflict resolution methods should be applied when the intention of the parties is to solve the problem by clarifying differences and attaining everyone's objectives?

Question69: Which of the following is a key responsibility of a database administrator?

Question70: Which of the following is a key component of an organization's cybersecunty governance?

Question71: Under a value-added taxing system:

Question72: Which of the following statements regarding database management systems is not correct?

Question73: 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.

Question74: If a bank's activities are categorized under such departments as community banking, institutional banking, and agricultural banking, what kind of departmentalization is being utilized?

Question75: A supervisor receives a complaint from an employee who is frustrated about having to learn a new software program. The supervisor responds that the new software will enable the employee to work more efficiently and with greater accuracy. This response is an example of:

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

Question77: 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.

Question78: 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.

Question79: Which of the following is not included in the process of user authentication?

Question80: Which of the following statements pertaining to a market skimming pricing strategy is not true?

Question81: 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?

Question82: Which audit approach should be employed to test the accuracy of information housed in a database on an un-networked computer?

Question83: Which of the following options correctly defines a transmission control protocol/Internet protocol (TCP/IP)?

Question84: Which of the following would not impair the objectivity of internal auditor?

Question85: Which is the least effective form of risk management?

Question86: 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)?

Question87: 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.

Question88: 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.

Question89: Which of the following distinguishes the added-value negotiation method from traditional negotiating methods?

Question90: A software that translates hypertext markup language (HTML) documents and allows a user to view a remote web page is called:

Question91: According to IIA guidance, which of the following corporate social responsibility (CSR) evaluation activities may be performed by the internal audit activity?
1. Consult on CSR program design and implementation.
2. Serve as an advisor on CSR governance and risk management.
3. Review third parties for contractual compliance with CSR terms.
4. Identify and mitigate risks to help meet the CSR program objectives.

Question92: Which of the following stages of group development is associated with accepting team responsibilities?

Question93: 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?

Question94: 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?

Question95: Which of the following strategies would most likely prevent an organization from adjusting to evolving industry market conditions?

Question96: Preferred stock is less risky for investors than is common stock because:

Question97: Which of the following statements regarding program change management is not correct?

Question98: When assessing the adequacy of a risk mitigation strategy, an internal auditor should consider which of the following?
1. Management's tolerance for specific risks.
2. The cost versus benefit of implementing a control.
3. Whether a control can mitigate multiple risks.
4. The ability to test the effectiveness of the control.

Question99: In mergers and acquisitions, which of the following is an example of a horizontal combination?

Question100: An organization needs to borrow a large amount of cash to fund its expansion plan. Which of the following annual interest rates is least expensive?

Question101: Which of the following IT controls includes protection for mainframe computers and workstations?

Question102: An organization engages in questionable financial reporting practices due to pressure to meet unrealistic performance targets. Which internal control component is most negatively affected?

Question103: The first step in determining product price is:

Question104: 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?

Question105: Which of the following does not provide operational assurance that a computer system is operating properly?

Question106: 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:

Question107: Which of the following examples demonstrates that the internal audit activity uses descriptive analytics in its engagements?

Question108: Organizations use matrix management to accomplish which of the following?

Question109: The first stage in the development of a crisis management program is to: