An organization facing rapid growth decides to employ a third party service provider to manage its customer relationship management function. Which of the following is true regarding the supporting application software used by that provider compared to an inhouse developed system?
1.Updating documentation is always a priority.
2.System availability is usually more reliable.
3.Data security risks are lower.
4.Overall system costs are lower.

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

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Which of the following statements is true regarding data backup?

• A.System backups should always be performed in real-time.
• B.Backups should be stored in a secured location onsite for easy access.
• C.The tape rotation schedule affects how long data is retained.
• D.Backup media should be restored only in case of a hardware or software failure.

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Security of monetary transactions is one example of an audit objective for an e-commerce engagement. Which of the following is not an audit objective for an e-commerce engagement?

• A.Effective use and control of digital signatures.
• B.Adequacy and timeliness of operating data and information.
• C.Effectiveness of customer authentication process.
• D.Appropriateness of reporting lines.

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An organization uses the management-by-objectives method, whereby employee performance is based on defined goals. Which of the following statements is true regarding this approach?

• A.It is particularly helpful to management when the organization is facing rapid change
• B.It is a more successful approach when adopted by mechanistic organizations
• C.It is more successful when goal-setting is performed not only by management, but by all team members, including lower-level staff
• D.It is particularly successful in environments that are prone to having poor employer-employee relations

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Which of the following statements is true regarding outsourced business processes?

• A.Generally, independence is improved when the internal audit activity reviews outsourced business processes.
• B.The key controls of outsourced business processes typically are more difficult to audit because they are designed and managed externally.
• C.The system of internal controls may be better and more efficient when the business process is outsourced compared to internally sourced.
• D.Outsourced business processes should not be considered in the internal audit universe because the controls are owned by the external service provider.

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