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IIA Business Knowledge for Internal Auditing Sample Questions (Q151-Q156):

NEW QUESTION # 151
The primary reason for social regulation is that:

• A. Social regulation is more desirable.
• B. Consumer and environmental groups are politically powerful.
• C. Social al benefits from such regulations always exceed the costs.
• D. The free market provides minimal safety and environmental protection.

Answer: D Explanation:
Social regulation concerns quality of life issues, e.g., workplace and product safety, environmental degradation, and fair employment practices. The abuses addressed are those that are difficult for market forces to remedy. For example, consumers may purchase products on the basis of price and quality but without regard to the environmental impact of their production, and unsafe working conditions may be tolerated by individuals who have few opportunities for other employment.
NEW QUESTION # 152
Which of the following is an example of two-factor authentication?

• A. The user's key fob and a smart card.
• B. The user's password and a separate passphrase.
• C. The user's fingerprint and a personal Identification number.
• D. The user's facial geometry and voice recognition.

Answer: C
NEW QUESTION # 153
Project B's internal rate of return is closest to:

• A. 20%
• B. 15%
• C. 18%
• D. 22%

Answer: A Explanation:
Twenty percent is the rate of return that equates the cash inflows with the cash outflows. The present value of 20% for 5 years is .4019, which multiplied by US $9,950,000 equals US $3,998,905. Therefore, the net present value of the project approximates 0 using the 20% rate.
NEW QUESTION # 154
Which of the following is an example of an application control?

• A. Automated password change requirements
• B. Formatted data fields
• C. User testing of system changes
• D. System data backup process

Answer: B
NEW QUESTION # 155
Just-in-time (JIT) inventory systems have been adopted by large manufacturers to minimize the carrying costs of inventories. Identify the primary vulnerability of JIT systems.

• A. Computer resources.
• B. Materials supply contracts.
• C. Work stoppages.
• D. Implementation time.

Answer: C Explanation:
JIT minimizes inventory by relying on coordination with suppliers to provide deliveries when they are needed for production. Consequently, work stoppages are more likely due to stock outs, because the inventory buffer is reduced or eliminated.
NEW QUESTION # 156
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