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NEW QUESTION 153
The Dean of Information Technology at Capital City University wishes to develop a degree in 'ethical hacking" Students will graduate from this course with the skills needed to develop malware, so that they have the ability to reverse engineer malicious software The Dean believes that there will be strong demand for such graduates from employers in IT security and related fields.
Which TWO of the following statements are correct?
- A. The course should teach students to reverse engineer malware without enabling them to write malware
- B. The University should conduct detailed background checks on applicants before they are admitted to this degree
- C. The University should not be equipping its students with skills that could be abused for the purposes of committing crime or causing harm
- D. The academic staff teaching on this degree may struggle to keep up to date with the latest developments in malware
- E. Potential employers would be suspicious of job applicants whose choice of degree indicates an interest in malware
Answer: A,B
NEW QUESTION 154
Which of the following statements are true of economic risk?
- A. Economic risk is easy to measure
- B. Economic risk is something which cannot be avoided
- C. Economic risk is influenced by many factors
- D. Economic risk may be caused by international trade
Answer: C,D
NEW QUESTION 155
Which of the following risks should be given highest priority?
- A. Risks which have a low impact and a low likelihood of arising
- B. Risks which have a high impact and have a low likelihood of arising
- C. Risks which have a low impact but which arise frequently
- D. Risks which have a high impact and which may arise occasionally
Answer: D
NEW QUESTION 156
Y Company wishes to recruit an employee who will have responsibility for the receipt and handling of cash From the point of view of the internal auditor which THREE of the following would be most likely to provide useful information about the candidate"?
- A. The candidate's membership of a professional body
- B. Confirmation that the candidate does not have a criminal record
- C. The candidate's academic qualifications.
- D. The candidate's personal referees
- E. References from previous employers of the candidate.
Answer: A,D,E
NEW QUESTION 157
A government department is conducting a value for money audit on a school.
The school's pupils sit leaving exams. Classify each of the audit tests as either economy and efficiency or effectiveness.
Answer:
Explanation:
NEW QUESTION 158
SDF is a quoted company that has a large internal audit department.
Which of the following would impair the independence of SDF's internal audit?
- A. Junior internal audit staff are recruited directly from university. They spend two years with the company before moving into other departments within SDF.
- B. It is left to the individual members of the internal audit department to report any conflicts of interest associated with a proposed investigation to which they have been assigned.
- C. Internal audit staff receive a bonus whenever they discover a compliance error.
- D. The head of internal audit reports directly to SDF's chief accountant.
- E. Internal audit staff salaries are linked to a company-wide salary scheme.
Answer: A,C,D
NEW QUESTION 159
CH makes a popular type of chocolate bar The bars are made on a production line and are scanned for size and shape as they move along the line Wrong sized and misshapen bars are rejected as being poor quality. The scanner detects 90% of poor quality bars. If CH wants to reduce the risk of poor quality bars being sold to the public it can add a further check by a person scanning the production line as well. this check would detect 80% of poor quality bars If the further check was implemented what percentage of poor quality bars would still get through the checking process?
- A. 10%
- B. 30%
- C. 7.2%
- D. 2%
Answer: D
NEW QUESTION 160
You are a junior accountant in a local accountancy firm with many clients in various businesses.
Your immediate manager has asked you to collect certain personal details about clients' staff from the firm's records. You suspect that his intentions are malicious.
You asked your manager to explain why he required these details and he told you it is none of your business.
What should you do? Select TWO responses.
- A. You should stop being impertinent and obtain the details as instructed.
- B. You should try to find out what the manager wishes to use the details for.
- C. You should keep a log of all the facts that the manager has requested, including the dates on which those requests were made.
- D. You should raise the matter with the firm's external auditors.
- E. You should seek to have a confidential discussion with the manager's superior and express your concerns.
Answer: C,E
NEW QUESTION 161
Which of the following statements are correct?
- A. It is always possible to remove all risks when undertaking large projects.
- B. If a project has low risks it will usually have relatively low returns.
- C. Risk should be carefully considered when evaluating possible future projects.
- D. If a project has high risks it should always be accepted as the rewards will always be high.
- E. Risk can always be transferred to someone else.
Answer: B,C
NEW QUESTION 162
A project has been evaluated on the basis that it will cost $22 million and will have a net present value of $4.3 million The project has commenced and $5 million of the $22 million has been invested. A problem has been discovered that will cost an additional $4.5 million to rectify. The $4.5 million will be payable immediately.
What is the NPV of continuing with this project?
- A. -$5million
- B. $4.8million
- C. -$0.2million
- D. $1million
Answer: B
NEW QUESTION 163
James owns a small company which sometimes suffers from credit risk.
Which of the following measures should he put in place to help reduce this risk?
- A. Look for a loan with a lower interest rate.
- B. Introduce credit checks for new customers.
- C. Reduce the company bank loans.
- D. Pay suppliers' invoices quicker.
Answer: B
NEW QUESTION 164
A junior sales clerk at BCD, a wholesale jewellers, received an email which appeared to be from a well known parcel delivery company informing her that a delivery had been attempted outside office hours and had consequently failed She was asked to click on a link and complete some seemingly innocent but logical questions to effect the delivery on the next day She thought no more about it but was very surprised the next month to be awarded salesperson of the month as her sales had doubled Unfortunately, on investigation it was found that this was as a result of several fraudulent orders for high-value items that had seemingly been placed by an existing customer but delivered to a new address, which turned out to be a temporary box number The existing customer's credit card had been fraudulently charged for these orders Which of the following types of cyber-attack had the sales clerk been a victim of?
- A. Botnets
- B. Ransomware
- C. Trojan
- D. Malvertising
Answer: D
NEW QUESTION 165
Which of the following statements are true of residual risk?
- A. Residual risk should never be accepted.
- B. Residual risk may be accepted if management feels the company can bear the risk.
- C. If residual risk is too great then the company should not expose itself to the risk situation.
- D. Residual risk is the risk that remains after risk mitigation has taken place.
- E. Residual risk has to be accepted.
Answer: B,C,D
NEW QUESTION 166
H is a departmental manager in a private college. The main measure of performance used to assess the Department Manager's effectiveness is meeting the college budgets. The budget for each year is based on the actual expenditure of the previous year adjusted for specific one-off items.
Which of the following would arise from using the meeting of this type of budget as a performance measurement?
- A. Managers engaging in unnecessary spending in order to avoid having their budgets reduced the following year.
- B. Cost overruns because managers might fail to meet their budgets.
- C. Management refusing to provide some necessary service to students (for example, extra tutorials) because it would cause their budget not to be met.
- D. Management of various departments not cooperating sufficiently with each other because each is very concerned that to do so would incur extra costs against their budgets.
- E. Managers taking on new projects that have too much risk attached to them.
- F. Management taking more than the optimal number of students into their department.
Answer: A,C,D
NEW QUESTION 167
VBN is a multinational company that has 60 subsidiary companies that operate in 11 countries. VBN evaluates the performance of each subsidiary as an investment centre, using residual income to measure performance.
Which THREE of the following threats of dysfunctional behaviour may arise from VBN's use of residual income to measure subsidiaries' performance?
- A. Subsidiary boards may actively hedge translation risks.
- B. Subsidiary boards may waste time and incur unnecessary fees in order to recognise gains on the revaluation of property.
- C. Subsidiary boards may waste time by arguing over transfer prices.
- D. Subsidiary boards may take a short-term view to investment projects.
- E. Subsidiary boards may be motivated to spend heavily on capital expenditure in order to ensure that budget allocations are maintained and even increased.
Answer: A,C,D
NEW QUESTION 168
DFG's call centre budgets four minutes for its operators to deal with a customer's enquiry and conclude the call. Team leaders are evaluated on the basis of the average call length.
Simone is a team leader. Her team's average call length is five minutes and 30 seconds. Simone accepts full responsibility. She encourages her team members to check that the customer is satisfied before concluding the call.
On investigation, it was discovered that 2% of the customers who dealt with Simone's team had to call DFG again within seven days. Other teams had an average of 25% of customers call back within seven days because their first call had not fully resolved their problem.
Which of the following statements are true?
- A. The use of average call length may be leading to dysfunctional behaviour.
- B. Average call length should be replaced with the average rate of return calls as the primary performance measure for team leaders.
- C. It would be better to evaluate team leaders on the basis of multiple criteria.
- D. Simone is in breach of call centre policy.
- E. Team leaders should be responsible for setting policy on performance measurement within the call centre.
Answer: A,C,D
NEW QUESTION 169
M, a manufacturing company, has had some problems with defects in one of the main products it produces.
This product has been made by the company for many years and is very profitable. Last month it had over 300 defects reported by customers which is more than 15% of products sold. This is a reputation risk for M and is also affecting profitability.
Which of the following controls could M introduce to reduce defects and also increase profitability?
- A. M could check all employees qualifications to ensure they are qualified for their jobs.
- B. M could service machinery at least once a month as recommended by the machinery supplier.
- C. M could introduce a procedure where quality control staff sign a form at the end of each day to say they have examined 1 in 10 products for defects and they are satisfied with the quality.
- D. The production director could examine one in every 10 products and sign a form to say they are satisfactory.
- E. M could increase the number of quality control staff.
Answer: A,B,C
NEW QUESTION 170
Amber selects appropriate suppliers and places purchase orders.
Brian passes invoices for payment and submits payment instructions to the bank.
Chris checks incoming inventory and unpacks goods from their containers.
Dirwan posts purchase invoices and files invoices and supporting documents.
Which member of staff could most easily commit fraud?
- A. Amber
- B. Dirwan
- C. Brian
- D. Chris
Answer: C
NEW QUESTION 171
JHG manufactures inexpensive cars that compete largely on price Its cars have very basic equipment and small but economical engines JHG's Board is considering launching a luxury brand of cars that will be far better equipped, more comfortable and have much better performance Which THREE of the following would be relevant factors to incorporate into the stress testing of this new strategy to create a luxury brand?
- A. Sales of JHG's existing range of cars
- B. Reductions m motorway speed limits
- C. Increased tax on vehicle emissions
- D. The need for consumer research
- E. Potential changes in interest rates.
- F. The cost of designing new cars.
Answer: A,C,F
NEW QUESTION 172
Which TWO of the following might create a good control environment?
- A. Management did not have time to carry out all the staff appraisals this year but all staff have received a pay increase instead
- B. Managers have good job descriptions that define their roles in the organisation clearly
- C. The Board has just issued an ethical code
- D. Management has just revisited the annual budget and made it much harder to achieve in order to try and boost profits
- E. The Finance Director has just been given a place on the audit committee to increase the committee's financial knowledge
Answer: B,C
NEW QUESTION 173
Z is a multinational pharmaceuticals company with operations across Europe, America and Asia.
It is currently investigating the possibility of setting up a chemical and specialist production facility in South America. This would be a multi $billion investment. What steps should Z take to manage the following risks in this long term venture.
Answer:
Explanation:
NEW QUESTION 174
A project requires a capital investment of £2.7million. The project will save £450,000 each year after taxation.
Assume the savings are in perpetuity. The business risk of the venture requires a 15% discount rate. The company has to borrow £1million to finance the project at a rate of 9% and the net tax shield is 30%, the project supports debt which generates an interest tax shield of 0.30 x 0.09 x £1million, which is £27,000 per year in perpetuity.
Calculate the project's adjusted present value.
- A. 0
- B. £570,000
- C. £(30,000)
- D. £600,000
Answer: D
NEW QUESTION 175
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