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.Outsourced business processes should not be considered in the internal audit universe because the controls are owned by the external service provider.
• D.The system of internal controls may be better and more efficient when the business process is outsourced compared to internally sourced.

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Unsecured loans are loans:

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

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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 describes the most appropriate set of tests for auditing a workstation's logical access controls?

• A.Review the list of people with access badges to the room containing the workstation and a log of those who accessed the room
• B.Review the password length, frequency of change, and list of users for the workstation's login process
• C.Review the list of people who attempted to access the workstation and failed, as well as error messages
• D.Review the passwords of those who attempted unsuccessfully to access the workstation and the log of their activity

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A financial statement includes all of the following items: profit. depreciation, operating activities, and financing activities. What financial statement is this?

• A.Balance sheet.
• B.Income statement.
• C.Statement of cash flows.
• D.Statement of changes in equity.

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