Which of the following is the best problem-solving technique to use when analyzing performance
and cost?

A.

Value analysis.

B.

Attribute listing.

C.

Brainstorming.

D.

Component analysis.

In order to effectively elicit sensitive information from an employee during an audit engagement,
an auditor should:

A.

Tell the employee a piece of information obtained from a coworker in a previous interview.

B.

Put sensitive questions at the beginning of a questionnaire to ensure that they are answered.

C.

Explain that the auditor's reputation for integrity, which is vital to the auditor's business success,
would be seriously damaged if confidentiality were breached.

D.

Point out that management has given the auditor full authority to conduct this interview.

During a routine audit of a customer service hotline, an internal auditor noticed that an unusually
high number of customer complaints pertained to payments not being applied to the customers'
accounts.
Which of the following would most likely be the reason for the high volume of complaints?

A.

An ineffective customer service department.

B.

Poor controls in the invoice approval processes.

C.

Check tampering by an employee.

D.

 Submission of fraudulent expense reports.

Direct staff as a percentage of total staff is an example of which of the following types of efficiency
measures? 

A.

Productivity ratio.

B.

Productivity index.

C.

Operating ratio.

D.

Resource utilization rate

Which of the following data collection strategies systematically tests the effects of various factors
on an outcome?

A.

Content analysis.

B.

 Sampling.

C.

Evaluation synthesis.

D.

Modeling.

Which of the following audit procedures is most suitable for verifying that all sales transactions
have been recorded?

A.

Observation.

B.

Tracing.

C.

Re-computation.

D.

Vouching

Which of the following would be an appropriate and effective control self-assessment approach in
an organization with an authoritative culture? 
I. Facilitated meeting
II. Survey
III. Management-produced analysis

A.

I only

B.

I and III only

C.

II and III only

D.

I, II, and III

A film company determined that income level impacts the number of films that people watch per
month, as shown by the graph below:
The graph indicates that:

A.

A richer person always sees more films than a poorer person.

B.

The number of films seen per month is a linear function of income level.

C.

A 20 percent pay increase is more likely to increase film viewing at lower income levels than at
higher income levels.

D.

A 20 percent pay increase is likely to increase film viewing by a constant amount regardless of
income level.

What does the following scatter gram suggest?

A.

Sales revenue is related to training costs.

B.

The training program is not effective.

C.

Increases in training costs consistently increase sales revenue.

D.

One data point is incorrectly plotted

New credit policies have been implemented in an automated order-entry system to improve the
collection of receivables. Sales management has compiled several examples that show decreased
sales and delayed order entry, and contends that these examples are a direct result of the new
credit-policy constraints. Sales management's data and information provide.

A.

Feedback control data.

B.

Irrelevant and argumentative information.

C.

Evidence that the new credit policies do not meet the stated corporate objective to improve
collections.

D.

A statistically valid conclusion about the impact of the new credit policies on customer goodwill.