Q57. Which of the following is a characteristic of an emerging industry?

Q58. Which of the following would not impair the objectivity of internal auditor?

Q59. Control objectives regarding effectiveness and efficiency, reliability, and compliance are the basis of which control framework?

Q60. 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?

Q61. Which of the following data analytics tools would be applied by an internal audit activity positioned at the lowest level of maturity?

Q62. An entity has a high fixed-assets turnover ratio. What conclusion can a financial analyst draw from this?

Q63. The value of retaining employees is determined by:

Q64. An organization has a compensation system for its managers based on a management-
objectives MBO) approach. The essential premise of MBO is that:

Q65. An organization is considering mirroring the customer data for one regional center at another center. A disadvantage of such an arrangement would be:

Q66. An organization has an immediate need for servers, but no time to complete capital acquisitions. Which of the following cloud services would assist with this situation?

Q67. A domestic company has sales divisions in country X and country Y. The company sells only one product. Which costs US $20 per unit to produce. There are no trade barriers or tariffs among the three countries. Information specific to each of the three countries is as follows:

When selling items to its sales division s) in <List A>. the Company should set the <List B>
allowable transfer price.

Q68. 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:

Q69. A corporation acquires a 30% voting interest in another. In this situation, the long-term investment is generally accounted for on the investor corporation’s books using which of the following reporting methods?

Q70. The economic order quantity is the size of the order that minimizes total inventory costs which include ordering and holding carrying) costs. It can be calculated using the formula

If Q = order size in units, D = annual demand in units, p = cost per purchase order, s = carrying cost per year for one unit of inventory. If the annual demand decreases by 369/o the optimal order size will:

Q71. If sales are accounted for using the installment method, which of the following is(are) only recognized in proportion to the cash collected on the sales during the period?

Q72. Which of the following descriptions of the internal control system are indicators that risks are managed effectively?
1. Existing controls promote compliance with applicable laws and regulations.
2. The control environment is designed to address all identified risks to the organization.
3. Key controls for significant risks to the organization remain consistent over time.
4. Monitoring systems are in place to alert management to unexpected events.

Q73. Division Z of a company produces a component that it currently sells to outside customers for US $20 per unit At its current level of production, which is 60% of capacity, Division Z’s fixed cost of producing this component is US $5 per unit and its variable cost is US $12 per unit Division Y of the same company would like to purchase this component from Division Z for US $10. Division Z has enough excess capacity to fill Division Y’s requirements. The managers of both divisions are compensated based upon reported profits. Which of the following transfer prices will maximize total company profits and be most equitable to the managers of Division Y and Division Z?

Q74. An entity obtained a short-term bank loan of US $250,000 at an annual interest rate of 6%. As a condition of the loan, the entity is required to maintain a compensating balance of US $50,000 in its checking account. The entity’s checking account earns interest at an annual rate of 2 %. Ordinarily, the entity maintains a balance of US $25,000 in its checking
account for transaction purposes. What is the effective interest rate of the loan?