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NEW QUESTION # 36
Because the VAN did not provide the internal auditor with access to its system, that portion of the engagement work program was not completed. Which one of the following should not be done by the internal auditor?
Answer: C
Explanation:
A scope limitation is a restriction placed upon the IAA that precludes it from accomplishing its objectives and plans. Among other things, a scope limitation may restrict the performance of necessary engagement procedures A scope limitation and its potential effect should be communicated. preferably in writing, to the governing authority. A VAN is an alternative to direct EDI communications between transacting parties. Consequently, it is a vital component of internal control over these transactions, and the internal auditor's inability to obtain access constitutes a material limitation on the scope of the engagement to evaluate risk exposures and the adequacy and effectiveness of internal control. As a result, the original engagement program should be annotated but not rewritten.
NEW QUESTION # 37
A tight monetary policy is frequently cited as an important policy instrument for fighting inflation. Keynesian n:mists believe that one of the possible undesirable side effects of such a policy is:
Answer: C
Explanation:
A tight monetary policy means that little money is available for borrowing. When supply is reduced, the price increases. Thus, interest rates are increased when the money supply contracts. Because of high interest rates, the cost of investment is increased and investment is discouraged.
NEW QUESTION # 38
If the central bank of a country raises interest rates sharply, the country's currency will likely:
Answer: C
Explanation:
Exchange rates fluctuate depending upon the demand for each country's currency. If a country raises its interest rates, its currency will appreciate. The demand for investment at the higher interest rates will shift the demand curare for the currency to the right. The reverse holds true for a decrease in interest rates.
NEW QUESTION # 39
A new manager received computations of the internal fate of return regarding the project proposal. What should the manager compare the computation results to in order to determine whether the project is potentially acceptable?
Answer: D
NEW QUESTION # 40
Which of the following risks would involve individuals attacking an oil company's IT system as a sign of solidarity against drilling in a focal area?
Answer: A
NEW QUESTION # 41
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