Company H operates a fleet of lorries. The Internal Auditor recently conducted an investigation into the transport needs of the company. Their report recommended that the lorries be disposed of, the drivers made redundant, and the distribution of the company's products be outsourced.
The type of investigation carried out by the Internal Auditor is best described as a:

• A.Effectiveness Audit
• B.Efficiency Audit
• C.Compliance Audit
• D.Economy Audit

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VBN is a multinational company that has 60 subsidiary companies that operate in 11 countries. VBN evaluates the performance of each subsidiary as an investment centre, using residual income to measure performance.
Which THREE of the following threats of dysfunctional behaviour may arise from VBN's use of residual income to measure subsidiaries' performance?

• A.Subsidiary boards may actively hedge translation risks.
• B.Subsidiary boards may waste time and incur unnecessary fees in order to recognise gains on the revaluation of property.
• C.Subsidiary boards may take a short-term view to investment projects.
• D.Subsidiary boards may be motivated to spend heavily on capital expenditure in order to ensure that budget allocations are maintained and even increased.
• E.Subsidiary boards may waste time by arguing over transfer prices.

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Which of the following is NOT a financial risk.

• A.Selling goods on credit terms.
• B.Sourcing raw materials overseas to manufacture goods.
• C.Taking out variable rate loans to finance short term investments.
• D.Global warming.

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Which of the following represents the greatest risk associated with introducing a system of post-completion audit for investment projects?

• A.The entity may withdraw from a project without good cause.
• B.The entity will realise that its approach to project appraisal is flawed.
• C.Decision makers may be deterred from taking responsible risks.
• D.The audit itself will waste time.

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R is a manufacturer of biscuits. The market for biscuits is extremely competitive with many companies competing for contracts with large supermarkets. The intensity of the competition means that prices are kept low; and the buyers can demand higher levels of quality, and greater flexibility in supply arrangements.
Which of the following represent ways that the use of an Information System could help R to win and retain supermarket contracts in such a competitive market?

• A.It could be used to facilitate more timely and accurate delivery which would minimising waste.
• B.It could facilitate product ordering and selection by the use of Electronic Data Interchange.
• C.It would mean that R's products would be more prominently displayed on the supermarket shelves.
• D.If R's system is integrated to that of a particular supermarket then other supplier's systems cannot also be integrated to that supermarket system.
• E.If R's system is integrated with that of a particular supermarket, then this will make it more expensive for the supermarket to change to a different supplier.

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