A company in the process of analyzing inventory safety stock levels is having difficulty because demand vanes widely from one week to the next. However, it has been discovered that demand occurs according to a probability distribution. Which of the following is a stochastic model that the company could use in this situation?

• A.Markov process.
• B.Linear programming.
• C.Regression analysis.
• D.Critical path network analysis.

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According to IIA guidance, which of the following statements is true regarding analytical procedures?

• A.Data relationships cannot include comparisons between operational and statistical data
• B.Analytical procedures can be used to identify unexpected differences but cannot be used to identify the absence of differences
• C.Analytical procedures are intended primarily to ensure the accuracy of the information being examined.
• D.Data relationships are assumed to exist and to continue where no known conflicting conditions exist.

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Under a value-added taxing system:

• A.The consumer ultimately bears the cost of the tax through higher prices.
• B.Consumer savings are discouraged.
• C.Businesses must pay a tax only if they make a profit.
• D.The amount of value added is the difference between an organization's sales and its cost of goods sold.

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Computer program libraries should be kept secure by:

• A.Installing a logging system or program access.
• B.Monitoring physical access to program library media.
• C.Restricting physical and logical access.
• D.Denying remote access via terminals.

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Unsecured loans are loans:

• A.That appear to be too risky for most lenders to consider.
• B.Granted on the basis of a company's credit standing.
• C.Backed by mortgaged assets.
• D.That do not have to be repaid for over one year.

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