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IIA Business Knowledge for Internal Auditing Sample Questions (Q77-Q82):

NEW QUESTION # 77
Which of the following security controls would be appropriate to protect the exchange of information?

A. File encryption.
B. Antivirus software.
C. Firewalls.
D. Activity logs.

Answer: A

Explanation:
Comprehensive and Detailed In-Depth Explanation:
File encryption protects the confidentiality and integrity of information during transmission and storage. It ensures that only authorized recipients can access the data by converting it into an unreadable format.
Option A (Firewalls) - Prevents unauthorized access to networks but does not secure data exchange.
Option B (Activity logs) - Tracks actions but does not protect data confidentiality.
Option C (Antivirus software) - Protects against malware but does not encrypt data in transit.
Thus, file encryption (Option D) is the best security control for protecting exchanged information.
Reference: IIA IT Security & Encryption Controls

NEW QUESTION # 78
A comp, any with three prod. Is classifies its costs as belonging to five functions: design, production, marketing, distribution and customer services. For pricing purposes, all company costs are assigned to the three products. The direct costs of each of the five functions are traced directly to the three products. The indirect costs of each of the five business functions are collected into five separate cost pools and then assigned to the three products using appropriate allocation bases. The allocation base that will most likely be the best for allocating the indirect costs of the distribution function is

A. Dollar sales volume.
B. Number of shipments.
C. Number of customer phone calls.
D. Number of sales persons.

Answer: B

Explanation:
The number of shipments is an appropriate cost driver. A cause-and-effect relationship may exist between the number of shipments and distribution costs.

NEW QUESTION # 79
Which of the following statements regarding organizational governance is not correct?

A. Governance principles and the need for an internal audit function are applicable to governmental and not-for-profit activities.
B. Those performing governance activities are accountable to the customer.
C. An effective internal audit function is one of the four cornerstones of good governance.
D. Accountability is one of the key elements of organizational governance.

Answer: B

NEW QUESTION # 80
A retail organization is considering acquiring a composite textile company. The retailer's due diligence team determined the value of the textile company to be $50 million. The financial experts forecasted net present value of future cash flows to be $60 million. Experts at the textile company determined their company's market value to be $55 million if purchased by another entity. However, the textile company could earn more than $70 million from the retail organization due to synergies. Therefore, the textile company is motivated to make the negotiation successful. Which of the following approaches is most likely to result in a successful negotiation?

A. Adopt an added-value negotiating strategy, develop a bargaining zone between $50 million and $70 million, and create sets of outcomes between $50 million and $70 million.
B. Develop a bargaining zone that lies between $55 million and $60 million and create sets of outcomes between $55 million and $60 million.
C. Develop a bargaining zone that lies between $50 million and $70 million and create sets of outcomes between $50 million and $70 million.
D. Involve a mediator as a neutral party who can work with the textile company's management to determine a bargaining zone.

Answer: B

NEW QUESTION # 81
The sales manager for a builder of custom yachts developed the following conditional table for annual production and sales:

According to the table, how many yachts should be built?

A. 0
B. 1
C. 2
D. 3

Answer: A

Explanation:
To achieve the maximum expected profit, 30 yachts should be built. For each level of production, multiply the probability of demand by the expected profit. The computation for the maximum is: 0.1(-US $10) + 0.2($10) + 0.5($30) + 0.2($30) = US $22.

NEW QUESTION # 82
......

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