Physical distribution is the moving of finished products to:
Correct Answer: C
Physical distribution is the efficient management of supply chains. It controls value-added flows from suppliers to consumers.
Question 27
Which of the following is the most effective user account management control in preventing the unauthorized use of a computer system?
Correct Answer: D
Management's network security policy should include measures to ensure that old and] unused accounts are removed promptly. If employees' accounts expire semiannually, reasonable assurance is provided that accounts in use by unauthorized employees do not exist.
Question 28
An internal auditor reviewed Finance Department records to obtain a list of current vendor addresses. The auditor then compared the vendor addresses to a record of employee addresses maintained by the Payroll Department Which of the following types of data analysis did the auditor perform?
Correct Answer: B
The internal auditor compared vendor addresses (Finance Department records) with employee addresses (Payroll Department records). This process is an example of "Joining Data Sources", which involves merging different datasets to identify relationships, discrepancies, or anomalies. * Definition of Joining Data Sources: * This technique is used in data analytics when an auditor merges two or more datasets based on a common field (e.g., addresses in this case). * It helps identify potential conflicts of interest or fraudulent transactions, such as employees creating fake vendors to receive unauthorized payments. * Application in Auditing: * The auditor is cross-referencing records from two different departments to check for potential fraud, duplicate payments, or unauthorized vendor relationships. * If vendor addresses match employee addresses, it could indicate a fraud risk (e.g., an employee making payments to a shell company they control). * A. Duplicate Testing: # * Involves identifying duplicate records within a single dataset, such as repeated invoice numbers or duplicate payments to the same vendor. * Here, the auditor is comparing two datasets, not searching for duplicates in one dataset. * C. Gap Analysis: # * Identifies missing data or discrepancies between expected and actual records (e.g., missing vendor payments). * In this case, the auditor is not looking for missing data but rather comparing records. * D. Classification: # * Involves categorizing data into predefined groups (e.g., classifying vendors as high-risk or low- risk). * The auditor is not categorizing vendors but matching addresses across datasets. * IIA GTAG (Global Technology Audit Guide) - Data Analytics for Internal Auditors: Discusses joining data sources to detect fraud, errors, and conflicts of interest. * IIA Standard 1220 (Due Professional Care): Requires auditors to apply appropriate data analysis techniques to assess risks effectively. * ACFE (Association of Certified Fraud Examiners) - Fraud Detection Techniques: Recommends cross-referencing employee and vendor records to detect fraud schemes. Step-by-Step Justification:Why Not the Other Options?IIA References:Thus, the correct answer is B. Joining data sources. #
Question 29
Which of the following inventory items would be the most frequently reviewed in an ABC inventory control system?
Correct Answer: D
The ABC system is a method for controlling inventories that divides inventory items into three groups: Group A - high-monetary-value items, which account for a small portion (perhaps 10%) of the total inventory usage Group B-- medium-monetary-value items, which may account for about 20% of the total inventory items Group C -- low-monetary-value items, which account for the remaining 70% of sales or usage The ABC system permits the proper degree of managerial control to be identified and exercised over each group. Group A items are reviewed on a regular basis. Group B items may not have to be reviewed as often as group A items, but more often than group C items. For group C, extensive use of models and records is not cost effective. It is cheaper to order large quantities infrequently. The ABC method therefore reduces the safety-stock investment because high-value items are frequently monitored and medium-value items are monitored more often than inexpensive items. Frequent review can prevent stockouts and decrease inventory levels, and the cost of such review is minimized if it is limited to high- or medium-value items.
Question 30
A U.S. company and a European company purchased the same stock on a European stock exchange and held the stock for one year. If the value of the euro weakened against the U.S dollar during the period, in comparison with the European company's return, the U.S company's return will be:
Correct Answer: A
Because the return to the U.S. company is adversely affected and the return to the European company is unaffected, the return to the U.S. company will definitely be lower than the return to the European company.
