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Question 1

When using the absorption costing approach, which of the following should be categorized as a period cost?

Options :

A : Selling expenses.

B : Fixed manufacturing overhead.

C : Direct labor.

D : Variable manufacturing overhead.

Answer: A

Question 2

An internal auditor is auditing their organizationâ€™s termination process. A primary objective of this engagement is to verify that exit interviews were conducted for all terminated employees over the last two years. The auditor discovered that not all employees received exit interviews. Which of the following risks could this lead to?

Options :

A : The risk of employee turnover.

B : The risk of noncompliance with a local labor law.

C : The risk of incorrect severance payments.

D : The risk of a confidentiality breach.

Answer: D

Question 3

Which of the following actions is most likely to gain support for process change?

Options :

A : Set clear objectives.

B : Engage the various communities of practice within the organization.

C : Demonstrate support from senior management.

D : Establish key competencies.

Answer: B

Question 4

According to IIA guidance, a business impact analysis would include which of the following steps?

Options :

A : Defining staffing alternatives needed for recovery.

B : Selecting recovery solutions and recovery sites.

C : Identifying the business processes.

D : Defining alternative sourcing of critical functions.

Answer: C

Question 5

An organization had a gross profit margin of 40 percent in year one and in year two. The net profit margin was 18 percent in year one and 13 percent in year two.

Which of the following could be the reason for the decline in the net profit margin for year two?

Options :

A : Cost of sales increased relative to sales.

B : Total sales increased relative to expenses.

C : The organization had a higher dividend payout rate in year two.

D : The government increased the corporate tax rate.

Answer: A