IIA IIA-CIA-Part3 CIA Exam Part Three: Business Knowledge for Internal Auditing Online Training

1. Which of the following best describes the purpose of fixed manufacturing costs?

2. Which of the following is a characteristic of using a hierarchical control structure?

3. An internal auditor is reviewing key phases of a software development project.

Which of the following would; the auditor most likely use to measure the project team's performance related to how project tasks are completed?

4. According to 11A guidance on IT, which of the following spreadsheets is most likely to be considered a high-risk user-developed application?

5. Which of the following scenarios indicates an effective use of financial leverage?

6. Which of the following is the most appropriate beginning step of a work program for an assurance engagement involving smart devices?

7. Which of the following situations best illustrates a "false positive" in the performance of a spam filter?

8. Which of the following parties is most likely to be responsible for maintaining the infrastructure required to prevent the failure of a real-time backup of a database?

9. Which of the following security controls would provide the most efficient and effective authentication for customers to access these online shopping account?

10. An organization decided to outsource its human resources function. As part of its process migration, the organization is implementing controls over sensitive employee data.

What would be the most appropriate directive control in this area?

11. An organization is considering integration of governance, risk., and compliance (GRC) activities into a centralized technology-based resource.

In implementing this GRC resource, which of the following is a key enterprise governance concern that should be fulfilled by the final product?

12. At one organization, the specific terms of a contract require both the promisor and promisee to sign the contract in the presence of an independent witness.

What is the primary role to the witness to these signatures?

13. 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?

14. Which of the following actions is likely to reduce the risk of violating transfer pricing regulations?

15. Which of the following statements is true regarding user-developed applications (UDAs)?

16. Which of the following represents a basis for consolidation under the International Financial Reporting Standards?

17. Which of the following scenarios best illustrates a spear phishing attack?

18. An organization discovered fraudulent activity involving the employee time-tracking system. One employee regularly docked in and clocked out her co-worker friends on their days off, inflating their reported work hours and increasing their wages.

Which of the following physical authentication devices would be most effective at disabling this fraudulent scheme?

19. Which of the following best describes owner's equity?

20. Which of the following describes a mechanistic organizational structure?

21. When determining the level of physical controls required for a workstation, which of the following factors should be considered?

22. During her annual performance review, a sales manager admits that she experiences significant stress due to her job but stays with the organization because of the high bonuses she earns.

Which of the following best describes her primary motivation to remain in the job?

23. During an audit of the payroll system, the internal auditor identifies and documents the following condition:

"Once a user is logged into the system, the user has access to all functionality within the system."

What is the most likely root cause for tins issue?

24. Which of the following attributes of data is most likely to be compromised in an organization with a weak data governance culture?

25. Which of the following lists best describes the classification of manufacturing costs?

26. Which of the following is an effective preventive control for data center security?

27. According to IIA guidance on IT, which of the following strategies would provide the most effective access control over an automated point-of-sale system?

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

29. Which of the following techniques would best detect an inventory fraud scheme?

30. Which of the following is most influenced by a retained earnings policy?

31. A newly appointed board member received an email that appeared to be from the company's CEO.

The email stated:

“Good morning. As you remember, the closure of projects is our top priority. Kindly organize prompt payment of the attached invoice for our new solar energy partners.” The board member quickly replied to the email and asked under which project the expense should be accounted. Only then did he realize that the sender 's mail domain was different from the company's.

Which of the following cybersecurity risks nearly occurred in the situation described?

32. Management has decided to change the organizational structure from one that was previously decentralized to one that is now highly centralized.

As such: which of the following would be a characteristic of the now highly centralized organization?

33. Which of the following types of accounts must be closed at the end of the period?

34. Which of the following would most likely serve as a foundation for individual operational goats?

35. Unavailability of critical services.

36. An analytical model determined that on Friday and Saturday nights the luxury brands stores should be open for extended hours and with a doubled number of employees present; while on Mondays and Tuesdays costs can be minimized by reducing the number of employees to a minimum and opening only for evening hours

Which of the following best categorizes the analytical model applied?

37. Which of the following biometric access controls uses the most unique human recognition characteristic?

38. 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?

39. Which of the following actions would senior management need to consider as part of new IT guidelines regarding the organization's cybersecurity policies?

40. Employees at an events organization use a particular technique to solve problems and improve processes. The technique consists of five steps: define, measure, analyze,

improve, and control.

Which of the following best describes this approach?

41. A manufacturer ss deciding whether to sell or process materials further.

Which of the following costs would be relevant to this decision?

42. Which of the following best explains the matching principle?

43. An attacker, posing as a bank representative, convinced an employee to release certain, financial information that ultimately resulted in fraud.

Which of the following best describes this cybersecurity risk?

44. An organization decided to reorganize into a flatter structure.

Which of the following changes would be expected with this new structure?

45. An internal auditor identified a database administrator with an incompatible dual role.

Which of the following duties should not be performed by the identified administrator?

46. Which of the following should software auditors do when reporting internal audit findings related to enterprise wide resource planning?

47. After purchasing shoes from an online retailer, a customer continued to receive additional unsolicited offers from the retailer and other retailers who offer similar products.

Which of the following is the most likely control weakness demonstrated by the seller?

48. Which of the following represents an inventory costing technique that can be manipulated by management to boost net income by selling units purchased at a low cost?

49. Which of the following is an established systems development methodology?

50. An organization's technician was granted a role that enables him to prioritize projects throughout the organization.

Which type of authority will the technician most likely be exercising?

51. When reviewing application controls using the four-level model, which of the following processes are associated with level 4 of the business process method?

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

53. Which of the following best describes a transformational leader, as opposed to a transactional leader?

54. Which of the following concepts of managerial accounting is focused on achieving a point of low or no inventory?

55. Which of the following would an organization execute to effectively mitigate and manage risks created by a crisis or event?

56. An organization has a declining inventory turnover but an increasing gross margin rate.

Which of the following statements can best explain this situation?

57. A company records income from an investment in common stock when it does which of the following?

58. Which of the following best describes a detective control designed to protect an organization from cyberthreats and attacks?

59. Which of the following disaster recovery plans includes recovery resources available at the site, but they may need to be configured to support the production system?

60. Which of the following actions should an internal auditor take to clean the data obtained for analytics purposes?

61. Which of the following controls would be most efficient to protect business data from corruption and errors?

62. Several organizations have developed a strategy to open co-owned shopping malls.

What would be the primary purpose of this strategy?

63. Which of the following best describes the primary objective of cybersecurity?

64. An organization that relies heavily on IT wants to contain the impact of potential business disruption to a period of approximately four to seven days.

Which of the following

business recovery strategies would most efficiently meet this organization's needs?

65. Which of the following capital budgeting techniques considers the tune value of money?

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

67. An internal auditor is reviewing results from software development integration testing.

What is the purpose of integration testing?

68. Which of the following contract concepts is typically given in exchange for the execution of a promise?

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

70. An organization created a formalized plan for a large project.

Which of the following should be the first step in the project management plan?

71. A restaurant decided to expand its business to include delivery services, rather than relying on third-party food delivery services.

Which of the following best describes the restaurants strategy?

72. For which of the following scenarios would the most recent backup of the human resources database be the best source of information to use?

73. According to Herzberg's Two-Factor Theory of Motivation, which of the following is a factor mentioned most often by satisfied employees?

74. Which of the following is a characteristic of big data?

75. Which of the following activities best illustrates a user's authentication control?

76. In light of increasing emission taxes in the European Union, a car manufacturer introduced a new middle-class hybrid vehicle specifically for the European market only.

Which of the following competitive strategies has the manufacturer used?

77. A company produces water buckets with the following costs per bucket:

Direct labor = 82

Direct material = $5

Fixed manufacturing = 83.50

Variable manufacturing = 82.50

The water buckets are usually sold for $15. However, the company received a special order for 50.000 water buckets at 311 each.

Assuming there is adequate manufacturing capacity and ail 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?

78. Which of the following best describes depreciation?

79. Which of the following is a sound network configuration practice to enhance information security?

80. Which of the following describes a third-party network that connects an organization specifically with its trading partners?

81. Which of the following statements accurately describes one of the characteristics that distinguishes a multinational company from a domestic company?

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

83. Which of the following is an example of a nonfinancial internal failure quality cost?

84. In which type of business environment are price cutting strategies and franchising strategies most appropriate?

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

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

87. The ability to test the effectiveness of the control.

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

89. 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?

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

91. Which of the following borrowing options is an unsecured loan?

92. Which of the following is the best approach to overcome entry barriers into a new business?

93. 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?

94. Which of the following statements about COBIT is not true?

95. 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:

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

97. To assess the performance of employees.

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

99. Ensure that performance targets are always achieved.

100. An organization engages in questionable financial reporting practices due to pressure to meet unrealistic performance targets.

Which internal control component is most negatively affected?

101. Independent verification of data integrity and accuracy.

102. 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?

103. Which of the following best describes an objective for an audit of an environmental management system?

104. In an analysis of alternative credit-management policies, which of the following components will cause the net present value of receivables on credit sales to increase, if everything else remains constant?

105. 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?

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

107. An organization has recorded the following profit and expenses:

Profit before interest and tax

$200,000

Sales

$2,300,000

Purchases of materials

$700,000

Interest expenses

$30,000

If the value-added tax (VAT) rate is 20 percent and the corporate tax rate is 30 percent, which of the following is the amount of VAT that the organization has to pay?

108. Which of the following costs would be incurred in an inventory stockout?

109. Pricing models linked to seasonal demand.

110. When writing a business memorandum, the writer should choose a writing style that achieves all of the following except:

111. A manager has difficulty motivating staff to improve productivity, despite establishing a lucrative individual reward system.

Which of the following is most likely the cause of the difficulty?

112. Which of the following is a type of network in which an organization permits specific users (such as existing customers) to have access to its internal network through the Internet by building a virtual private network?

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

114. Identify and prioritize the resources required to support critical business processes.

115. Which of the following is not a method for implementing a new application system?

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

117. A key advantage of developing a computer application by using the prototyping approach is that it:

118. 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?

119. 5

Based on this data, which of the following describes the value of Cost X in relation to the value of Output Produced?

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

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

122. 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:

123. When initiating international ventures, an organization should consider cultural dimensions in order to prevent misunderstandings.

Which of the following does not represent a recognized cultural dimension in a work environment?

124. In order to provide useful information for an organization's risk management decisions, which of the following factors is least important to assess?

125. 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?

126. Which of the following stages of group development is associated with accepting team responsibilities?

127. Which is the least effective form of risk management?

128. What are the objectives of governance as defined by the Standards?

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

130. Which of the following actions is most likely to gain support for process change?

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

132. An organization is considering mirroring the customer data for one regional center at another center.

A disadvantage of such an arrangement would be:

133. 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?

134. 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:

135. How inputs combine with outputs to generate activities.

136. Which of the following statements regarding program change management is not correct?

137. Which of the following is true regarding the COSO enterprise risk management framework?

138. Which of the following is a characteristic of just-in-time inventory management systems?

139. Which of the following is a role of the board of directors in the governance process?

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

141. Which of the following must be adjusted to index a progressive tax system to inflation?

142. Which of the following is an element of effective negotiating?

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

144. A capital investment project will have a higher net present value, everything else being equal, if it has:

145. 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?

146. Which of the following is a characteristic of an emerging industry?

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

148. 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?

149. Which of the following is the primary benefit of including end users in the system development process?

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

151. 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?

152. All of the following are possible explanations for a significant unfavorable material efficiency variance except:

153. International marketing activities often begin with:

154. Which of the following engagement observations would provide the least motivation for management to amend or replace an existing cost accounting system?

155. One change control function that is required in client/server environments, but is not required in mainframe environments, is to ensure that:

156. According to IIA guidance, which of the following is a typical risk associated with the tender process and contracting stage of an organization's IT outsourcing life cycle?

157. According to Porter, which of the following is associated with fragmented industries?

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

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

160. Which of the following statements is true regarding outsourced business processes?

161. Which of the following is always true regarding the use of encryption algorithms based on public key infrastructure (PKI)?

162. 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?

163. 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?

164. Which of the following statements regarding database management systems is not correct?

165. Which of the following price adjustment strategies encourages prompt payment?

166. Role of the company's leadership in ensuring IT supports the organization's strategies and objectives.

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

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

169. Which of the following is false with regard to Internet connection firewalls?

170. Which of the following is an example of a risk avoidance response?

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

172. Which of the following is not a barrier to effective communication?

173. Which of the following professional organizations sets standards for quality and environmental audits?

174. Provide broad oversight of implementation, training, and operation of new systems.

175. Overall system costs are lower.

176. 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?

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

178. The cost to enter a foreign market would be highest in which of the following methods of global expansion?

179. Which of the following describes the free trade zone in an e-commerce environment?

180. The decision to implement enhanced failure detection and back-up systems to improve data integrity is an example of which risk response?

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

182. An internal auditor is reviewing physical and environmental controls for an IT organization.

Which control activity should not be part of this review?

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

184. An organization produces two products, X and Y. The materials used for the production of both products are limited to 500 kilograms (kg) per month. All other resources are unlimited and their costs are fixed.

Individual product details are as follows:

Product X

Product Y

Selling price per unit

$10

$13

Materials per unit (at $1/kg)

2 kg

6 kg

Monthly demand

100 units

120 units

In order to maximize profit, how much of product Y should the organization produce each month?

185. Evaluate whether the procedures for program change management are adequate.

186. Which of the following stages of group development is associated with accepting team responsibilities?

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

188. 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?

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

190. Monitoring systems are in place to alert management to unexpected events.

191. Which of the following best describes a market signal?

192. Ability to empathize with other people.

193. 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:

194. In order to provide useful information for an organization's risk management decisions, which of the following factors is least important to assess?

195. Ensure that performance targets are always achieved.

196. Which of the following is not a method for implementing a new application system?

197. According to IIA guidance, which of the following is a typical risk associated with the tender process and contracting stage of an organization's IT outsourcing life cycle?

198. Which of the following best describes the concept of relevant cost?

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

200. The cost to enter a foreign market would be highest in which of the following methods of global expansion?

201. 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?

202. 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?

203. Which of the following is a characteristic of an emerging industry?

204. Import quotas that limit the quantities of goods that a domestic subsidiary can buy from its foreign parent company represent which type of barrier to the parent company?

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

206. The organization makes exclusive arrangements with the channels.

207. To assess the performance of employees.

208. 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:

209. 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?

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

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

212. 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?

213. A milestone requires resource allocation and needs time to be completed.

214. Emergency changes that bypass the normal control process frequently are deemed necessary.

215. 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?

216. Which of the following is a key characteristic of a zero-based budget?

217. Organizations use matrix management to accomplish which of the following?

218. Which of the following statements is true regarding the roles and responsibilities associated with a corporate social responsibility (CSR) program?

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

220. 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?

221. All of the following are possible explanations for a significant unfavorable material efficiency variance except:

222. The recession.

223. Which of the following is a type of network in which an organization permits specific users (such as existing customers) to have access to its internal network through the Internet by building a virtual private network?

224. Which of the following would not impair the objectivity of internal auditor?

225. Refer to the exhibit.





A company's financial balance sheet is presented below:

The company has net working capital of:

226. Which of the following is the best reason for considering the acquisition of a nondomestic organization?

227. International marketing activities often begin with:

228. What are the objectives of governance as defined by the Standards?

229. Which of the following is an example of a risk avoidance response?

230. Which of the following activities most significantly increases the risk that a bank will make poor-quality loans to its customers?

231. When writing a business memorandum, the writer should choose a writing style that achieves all of the following except:

232. 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?

233. Which of the following must be adjusted to index a progressive tax system to inflation?

234. According to Porter, which of the following is associated with fragmented industries?

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

236. Which of the following local area network physical layouts is subject to the greatest risk of failure if one device fails?

237. An internal auditor is trying to assess control risk and the effectiveness of an organization's internal controls.

Which of the following audit procedures would not provide assurance to the auditor on this matter?

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

239. A manager has difficulty motivating staff to improve productivity, despite establishing a lucrative individual reward system.

Which of the following is most likely the cause of the difficulty?

240. In creating a risk-based plan, which of the following best describes a top-down approach to understanding business processes?

241. 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?

242. Which of the following is an element of effective negotiating?

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

244. Which of the following price adjustment strategies encourages prompt payment?

245. Which of the following would best prevent unauthorized external changes to an

organization's data?

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

247. 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?

248. 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:

249. It can lead to cultural myopia.

250. Which of the following borrowing options is an unsecured loan?

251. Which of the following statements accurately describes one of the characteristics that distinguishes a multinational company from a domestic company?

252. An organization has recorded the following profit and expenses:

Profit before interest and tax

$200,000

Sales

$2,300,000

Purchases of materials

$700,000

Interest expenses

$30,000

If the value-added tax (VAT) rate is 20 percent and the corporate tax rate is 30 percent, which of the following is the amount of VAT that the organization has to pay?

253. 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?

✑ Determine whether previous incidents have been reported, managed, and resolved.

✑ Determine whether a business contingency plan exists. ✑ Determine the extent of transparency in reporting.

✑ Determine whether a cost/benefit analysis was performed for all related projects.

254. An organization is projecting sales of 100,000 units, at a unit price of $12. Unit variable costs are $7.

If fixed costs are $350,000, what is the projected total contribution margin?

255. Which of the following application-based controls is an example of a programmed edit check?

256. Which of the following distinguishes the added-value negotiation method from traditional negotiating methods?

257. Capacity overbuilding is most likely to occur when management is focused on which of the following?

258. They are helpful but limited in value in a rapidly changing environment.

259. Which of the following statements is true regarding the relationship between an individual’s average tax rate and marginal tax rate?

260. Organizations generally have flexibility regarding what is included in a CSR program.

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

262. 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?

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

264. Disaster recovery planning is a type of detailed control.

265. Which of the following is a major advantage of decentralized organizations, compared to centralized organizations?

266. Sales trends.

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

268. 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?

269. 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:

270. Which of the following methods, if used in conjunction with electronic data interchange (EDI), will improve the organization's cash management program, reduce transaction data input time and errors, and allow the organization to negotiate discounts with EDI vendors based on prompt payment?

271. 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.

272. Under a value-added taxing system:

273. Which of the following strategies is most appropriate for an industry that is in decline?

274. 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?