An international nonprofit organization finances medical research. The majority of its revenue and support comes from fundraising activities, investments, and specific grants from an initial sponsoring corporation. The organization has been in operation over 15 years and has a small internal audit department. The organization has just finished a major fundraising drive that raised US $500 million for the current fiscal period.
The following are selected data from recent financial statements (US dollar figures in millions): The auditor wishes to determine if the change in investment income during the current year was due to (a) changes in investment strategy, (b) changes in portfolio mix, or (c) other factors. Which of the following analytical review procedures should the auditor use?

• A.Simple linear regression that compares investment income changes over the past 5 years to determine the nature of the changes.
• B.Ratio analysis that compares changes in the investment portfolio on a monthly basis.
• C.Trend analysis that compares the changes in investment income as a percentage of total assets and of investment assets over the past 5 years.
• D.Multiple regression analysis that includes independent variables related to the nature of the investment portfolio and market conditions.

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An entity is arranging debt financing for the purchase of a new piece of equipment that has a 5-year expected useful life. Which of the following alternative financing arrangements has the lowest effective annual percentage rate if each has a quoted nominal rate of 9.5%?

• A.A 5-year term loan with interest compounded annually.
• B.A 10-year term loan with interest compounded semiannually.
• C.A 5-year term loan with interest compounded quarterly. D A 10-year term loan with interest compounded monthly.

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

• A.Incident response times are less critical in the BYOD environment. compared to a traditional environment
• B.With fewer devices owned by the organization, there is reduced need to maintain documented policies and procedures.
• C.There is greater sharing of operational risk in a BYOD environment.
• D.There is a greater need Kr organizations to rely on users to comply with policies and procedures.

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Which of the following provides the best justification for reducing trade barriers among nations?

• A.The military self-sufficiency argument.
• B.Diversification for stability argument.
• C.The infant industry argument.
• D.Increased total world output argument.

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

• A.System requirements, software design, analysis, program design, testing, coding, operations.
• B.Program design, system requirements, software design, analysis, coding, testing, operations.
• C.System requirements, analysis, coding, software design, program design, testing, operations.
• D.System requirements, software design, analysis, program design, coding, testing, operations.

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