Question 1

Which of the following are included in ISO 31000 risk principles and guidelines?

Accepted Answer

ISO 31000 includes principles, framework, and process as part of its guidelines for effective risk management.

Question 2

Which of the following costs would be incurred in an inventory stockout?

Accepted Answer

In an inventory stockout, a company may face lost sales due to inability to fulfill orders, lost customers who may turn to competitors, and costs associated with managing backorders. Safety stock is a preventive measure, not a cost incurred during a stockout.

Question 3

Which of the following methods, if used in conjunction with electronic data interchange (EDI), will improve the organization's cash management program, reduce transaction data input time and errors, and allow the organization to negotiate discounts with EDI vendors based on prompt payment?

Accepted Answer

Electronic funds transfer (EFT) allows for the quick and accurate transfer of funds, improving cash management, reducing data input time and errors, and enabling prompt payments which can lead to discounts.

Question 4

Which of the following is false with regard to Internet connection firewalls?

Accepted Answer

Firewalls do not protect against computer viruses; they are designed to block unauthorized access to or from a private network, not to detect or remove viruses.

Question 5

Which of the following is a product-oriented definition of a business rather than a market-oriented definition of a business?

Accepted Answer

A product-oriented definition focuses on the specific products a company makes, such as "We make movies," rather than the broader needs or wants they fulfill, which would be a market-oriented approach.

Question 6

According to the Standards, the internal audit activity must evaluate risk exposures relating to which of the following when examining an organization's risk management process? 1. Organizational governance. 2. Organizational operations. 3. Organizational information systems. 4. Organizational structure.

Accepted Answer

The internal audit activity must evaluate risk exposures related to governance, operations, and information systems as part of the organization's risk management process.

Question 7

Which of the following is not a barrier to effective communication?

Accepted Answer

Similar frames of reference facilitate understanding and effective communication, rather than acting as a barrier.

Question 8

For a multinational organization, which of the following is a disadvantage of an ethnocentric staffing policy? 1. It significantly raises compensation and staffing costs. 2. It produces resentment among the organization's employees in host countries. 3. It limits career mobility for parent-country nationals. 4. It can lead to cultural myopia.

Accepted Answer

An ethnocentric staffing policy can lead to higher costs, resentment in host countries, and cultural myopia due to reliance on parent-country nationals.

Question 9

Which of the following best describes a market signal?

Accepted Answer

A market signal is an action taken by a competitor that provides insight into their intentions or strategies, such as announcing a new warranty program.

Question 10

The internal audit activity completed an initial risk analysis of the organization's data storage center and found several areas of concern. Which of the following is the most appropriate next step?

Accepted Answer

After identifying areas of concern, the next step is to conduct a risk assessment to evaluate the significance and impact of the identified risks.

Question 11

Which of the following application software features is the least effective control to protect passwords?

Accepted Answer

Forced change of passwords after a designated number of days is the least effective control to protect passwords because it does not prevent users from choosing weak passwords or reusing passwords across multiple accounts.

Question 12

Which of the following stages of group development is associated with accepting team responsibilities?

Accepted Answer

The norming stage is when team members start to accept team responsibilities and work collaboratively towards common goals.

Question 13

Which of the following factors would reduce dissatisfaction for a management trainee but would not particularly motivate the trainee?

Accepted Answer

An incremental increase in salary is considered a hygiene factor according to Herzberg's Two-Factor Theory. It reduces dissatisfaction but does not necessarily motivate employees.

Question 14

According to Porter's model of competitive strategy, which of the following is a generic strategy? 1. Differentiation. 2. Competitive advantage. 3. Focused differentiation. 4. Cost focus.

Accepted Answer

Porter's model includes three generic strategies: Differentiation, Cost Leadership, and Focus. Focus can be further divided into Cost Focus and Differentiation Focus (Focused Differentiation). Competitive advantage is not a strategy but an outcome.

Question 15

The cost to enter a foreign market would be highest in which of the following methods of global expansion?

Accepted Answer

Overseas production involves setting up manufacturing facilities in a foreign country, which requires significant investment in infrastructure, labor, and compliance with local regulations, making it the most costly method of global expansion.

Question 16

When initiating international ventures, an organization should consider cultural dimensions in order to prevent misunderstandings. Which of the following does not represent a recognized cultural dimension in a work environment?

Accepted Answer

Self control is not a recognized cultural dimension in the context of work environments. The other options (power distance, masculinity versus femininity, and uncertainty avoidance) are part of Hofstede's cultural dimensions theory, which is widely used to understand cultural differences in international business.

Question 17

Which of the following distinguishes the added-value negotiation method from traditional negotiating methods?

Accepted Answer

Added-value negotiation involves presenting a menu of options to find mutually beneficial solutions, unlike traditional methods that often start with fixed positions or minimal information sharing.

Question 18

If a bank's activities are categorized under such departments as community banking, institutional banking, and agricultural banking, what kind of departmentalization is being utilized?

Accepted Answer

The bank's activities are categorized based on the type of customer they serve, such as community, institutional, and agricultural clients, which is characteristic of customer departmentalization.

Question 19

A supervisor receives a complaint from an employee who is frustrated about having to learn a new software program. The supervisor responds that the new software will enable the employee to work more efficiently and with greater accuracy. This response is an example of:

Accepted Answer

Reframing involves changing the way a situation is viewed to highlight the positive aspects, as the supervisor does by focusing on the benefits of the new software.

Question 20

An internal auditor is reviewing physical and environmental controls for an IT organization. Which control activity should not be part of this review?

Accepted Answer

Ensuring that at least one developer has access to both systems and operations is not a physical or environmental control. It relates more to access control and segregation of duties, which are not the focus of physical and environmental controls.

Exam 5: Business Analysis and Information Technology