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IIA Business Knowledge for Internal Auditing Sample Questions (Q249-Q254):

NEW QUESTION # 249
An organization decided to install a motion detection system in its warehouse to protect against after-hours theft. According to the COSO enterprise risk management framework, which of the following best describes this risk management strategy?

A. Reduction.
B. Sharing.
C. Avoidance.
D. Elimination.

Answer: A

Explanation:
Explanation

NEW QUESTION # 250
The chief audit executive (CAE) has embraced a total quality management approach to improving the internal audit activity's (lAArs) processes. He would like to reduce the time to complete audits and improve client ratings of the IAA. Which of the following staffing approaches is the CAE most likely lo select?

A. Assign a team of personnel who have different specialties to each audit and empower Team members to participate fully in key decisions
B. Assign a team with a trained audit manager to plan each audit and distribute field work tasks to various staff auditors.
C. Assign a team to each audit, designate a single person to be responsible for each phase of the audit, and limit decision making outside of their area of responsibility.
D. Assign a team of personnel who have similar specialties to specific engagements that would benefit from those specialties and limit Key decisions to the senior person.

Answer: D

NEW QUESTION # 251
Which of the following budgets serves as a basis for the budgeted income statement?

A. All financial budgets
B. All operating budgets
C. Only the cash budget and budgeted balance sheet
D. Only the sales and production budgets

Answer: B

NEW QUESTION # 252
The necessary elements of a contract include:

A. Some form of writing, equal consideration, and legal capacity.
B. Bilateral promises, legal capacity, and legality of purpose.
C. Offer and acceptance, consideration, legal capacity, and mutual assent.
D. Formal execution, definite terms, and a valid offer and acceptance.

Answer: C

Explanation:
Contracts require each of the following:
1.Offer and acceptance
2.Mutual assent meeting of the minds)
3.Consideration bargained-for exchange)
4.Legality legal purpose)
5.Capacity of parties legal ability

NEW QUESTION # 253
The decision rule that selects the strategy with the highest utility payoff if the worst state of nature occurs is the

A. Maxi max rule.
B. Minimize regret rule.
C. Maximize utility rule.
D. Maximin rule.

Answer: D

Explanation:
The maximin rule determines the minimum payoff for each decision and then chooses the decision with the maximum minimum payoff. It is a conservative criterion adopted by risk averse players, that is, those for whom the disutility of a loss exceeds the utility of an equal gain.

NEW QUESTION # 254
......

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