During the year, an entity's balance sheet accounts increased by the following amounts: Profit for the year was US $42,000. The only other change in retained earnings was for the

declaration of cash dividends. The amount of dividends declared was:

• A.US $2,000
• B.US $17,000
• C.US $33,000 D US $67,000

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Which of the following changes in accounting policies resulting from a significant change in the expected pattern of economic benefit will increase profit?

• A.A change from FIFO to LIFO inventory valuation when costs are rising.
• B.A change from FIFO to weighted-average inventory valuation when costs are falling.
• C.A change from accelerated to straight-line depreciation in the later years of the depreciable lives of the assets.
• D.A change from straight-line to accelerated depreciation in the early years of the depreciable lives of the assets.

Correct Answer: B

According to IAS 16 Property, Plant, and Equipment, a change in depreciation method resulting from a significant change in the expected pattern benefits is accounted for as a change in estimate, that is. prospectively. In a period of falling cost=. FIF1 results in higher cost of goods sold than the weighted-average method. FIFO includes the higher, early in cost of goods sold, whereas the weighted-average method averages the later, lower costs with the higher, earlier costs. Thus, a change from FIFO to weighted-average costing reduces cost of goods sold and into reported profit. An entity had the following account balances in the pre-closing trial balance:

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

• A.Break-even points.
• B.External trends and events.
• C.Internal risk factors.
• D.Internal strengths and weaknesses.

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If a system does not have a mainframe computer or a file server but does processing within a series of personal computers, the network is a(n):

• A.Offline processing system.
• B.Expert system.
• C.Direct access system.
• D.Peer-to-peer system.

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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.

• A.1, 2, 3, and 4
• B.2 and 4 only
• C.1, 3, and 4 only
• D.1 only

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