As it relates to the data analytics process, which of the following best describes the purpose of an internal auditor who cleaned and normalized data?

• A.The auditor ensured data fields were consistent and that data could be used for a specific purpose.
• B.The auditor made data usable for a specific purpose by ensuring that anomalies were identified and corrected.
• C.The auditor organized data to minimize useless information.
• D.The auditor eliminated duplicate information.

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While auditing a marketing department, the internal auditor discovered that the product life cycle model was used to structure the marketing mix.
Under such a philosophy, the opportunity for cost reductions would be greatest in which stage of the life cycle?

• A.Introduction stage.
• B.Growth stage.
• C.Maturity stage.
• D.Decline stage.

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The entity will pay dividends for the year of:

• A.US $10,625
• B.US $21.250
• C.US $23,125
• D.US $42,500

Correct Answer: A

The entity has a dividend payout ratio of 25% of profit. Profit before taxes is US $85,000 [$500,000 sales - $250,000 CGS - $25,000 G&A expenses - $400,000 LT debt x 10% interest rate) - $600,000 fixed assets - 6 years)]. Hence, after-tax profit is US $42,500 [$85,000 x 1.0 - .5)], and the dividend payout is US $10,625 ($42,500 25%).
During the year ended December 31. an entity had US $500,000 in sales revenue and purchased US $150,000 of inventory. The cost of goods sold was US $250,000 for the year, and the entity incurred US $ 25.000 of general and administrative expenses. The January 1 opening balance sheet was as follows:

The cost of long-term debt financing is 10% per annum, payable in one installment on December 31 of each year. The entity has a 50% tax rate. The entity has a dividend payout ratio of 25%. The fixed assets were 1-year old at the start of the current year were originally estimated to have a 6-year useful life. and are being depreciated on the straightline basis.

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Assume that employees confessed to a US $500,u-ui-1i- inventory theft but are not able to make restitution. How should this material fraud be shown in the company's financial statements?

• A.Classified as a loss and shown as a separate line item in the income statement.
• B.Initially classified as an accounts receivable because the employees are responsible for the goods. Because they cannot pay, the loss would be recognized as a write-off of accounts receivable.
• C.Included in cost of goods sold because the goods are not on hand, losses on inventory shrinkage are ordinary, and it would cause the least amount of attention.
• D.Recorded directly to retained earnings because it is not an income-producing item

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An organization accumulated the following data for the prior fiscal year: Value of Percentage of
Quarter Output Produced Cost X
1 $4,750,000
2.9
2 $4,700,000
3.0
3 $4,350,000
3.2
4 $4,000,000
3.5
Based on this data, which of the following describes the value of Cost X in relation to the value of Output Produced?

• A.Cost X is a semi-fixed cost.
• B.Cost X is a fixed cost.
• C.Cost X and the value of Output Produced are unrelated.
• D.Cost X is a variable cost.

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