BEC 2 Flashcards
Markets where securities trade b/w investors after they have been issued by a corporation are: Na2S .
Secondary Markets NH4+1
A unique service , product, or result that has a definite beginning and an end
Project
Off-shore operations” describes an organization
incorporating outside of the original jurisdiction of the primary operations.
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
relational databases use
tables.
A major advantage in the adoption and use of electronic commerce lies in the replacement of which of the following?
Paper documents
Product demand is more elastic
With more subsititutes available
The online data entry control called preformatting is:
the display of a document with blanks for data items to be entered by the terminal operator.
Who Is Hurt by Inflation:
Those individuals who receive a fixed income.
At the split-off, products may be salable or may require further processing in order to be salable. These are characteristics of:
By-products and Joint Products
Performance measures should assess how well subunits and managers are meeting:
goals of the organization.
There are three levels of interdependence in integrated planning:
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
What is the effect on prices of U.S. imports and exports when the dollar depreciates?
Import prices will increase and export prices will decrease.
How many levels of interdependence are included in integrated planning?
Three levels
Which of the following statements relating to machine language is not true?
Machine Language is the most efficient form of a fourth generation language
The Master budget is a comprehensive expression of management’s strategic direction that includes:
operating and financial budgets
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Before the initiative begins our answer was incorrect After completion of the initiative During the initiative
Company elects to treat the potential damages from hurriances as part of their business model
Risk Acceptance
A tool that is useful in conducting a preliminary analysis of internal controls in an organization or organizational unit:
Flowcharting
A combation of rising unemployment and a rising price level
Stagflation
What are reasons a firm may choose to outsource;share services, or off-shore a certain process:
Reduce Cost Improve process quality Focus on core competencies
Which of the following is true about the short run cost structure of a firm as the quantity produced increases?
B Average total costs reach a minimum when average total cost equals marginal cost.
Net income plus interest expense divided by the firm’s average interest bearing debt plus shareholders equity is the definition of:
Return on invested capital (ROIC)
the major advantage of debt financing is
is in lowering taxes. This advantage is greatest in periods of high marginal tax rates and few noninterest tax benefits.
Currently, the U.S. tax code requires that transfer prices for multinational corporations are “arms length transactions.” Methods that are prescribed by the IRS for setting arm’s length prices for tangible goods include all of the following except:
the target revenue approach. This method starts at a target selling price for the distribution affiliate that allows for a reasonable profit less the transfer price and any additional costs to cover overhead costs.
In order to comply with a director’s duty of loyalty to a corporation, what action(s) should a director take when presented personally with a new business opportunity?
Offer the opportunity to the corporation and accept it only if the corporation rejects it
The most common economic costs are
- Land(rent)
- Labor(wage)
- Capital(interest)
- Entrepreneurial
How many levels of interdependence are included in integrated planning?
Three levels
What is the effect on prices of U.S. imports and exports when the dollar depreciates?
Import prices will increase and export prices will decrease.
Globalization suggests that firms need to take a serious look at the variety of implications of globalization for business strategies. Among the major factors that need to be considered are:
the need for scenario planning, which causes the firm to look at a number of different future possibilities for the firm under varying conditions of high uncertainty.
An auditor’s required communication with those charged with the governance of an audit client (usually the audit committee):
This communication should include a discussion of any significant disagreements with management about the financial statements
Which of the following statements relating to an expert system is not true?
C Expert systems are rarely implemented outside of the medical and scientific communities.
There are three levels of interdependence in integrated planning:
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
Inflation may be measured using
- Gross domestic product deflator
- Wholesale price index.
- Consumer price index
A high point of economic activity
Peak
When using a flexible budget, a decrease in production levels within a relevant range:
decreases total costs.
A system where several minicomputers are connected for communication and data transmission purposes, but where each computer can also process its own data, is known as a:
distributed data processing network.
Globalization suggests that firms need to take a serious look at the variety of implications of globalization for business strategies. Among the major factors that need to be considered are:
the need for scenario planning, which causes the firm to look at a number of different future possibilities for the firm under varying conditions of high uncertainty.
Measures the value of all final goods and services in current price
Nominal GDP
A company is looking into using a balanced scorecard in connection with the design, creation, distribution, and customer service for one of its products produced in Oregon. In connection with this use of a balanced scorecard, what is a value chain?
It is a sequence of the business processes which add usefulness to a product from inception to satisfactory use by a customer
The goal of management in a corporation should be to
Maximize shareholder wealth
Example of normal goods
Premium food such as steak & lobster
The goals and objectives upon which an annual profit plan is MOST effectively based are:
A combination of financial,quantitative, and qualitative measures
If the price inelasticity is zero, demand is
perfectly inelastic(Qty demanded stays the same NO matter how price change)
The purpose of regression analysis is
to use an independent variable to predict the value of another variable.It is a mathematical equation used to fit the best line possible to the observed data
If the income elasticity of demand is negative(demand decreases as income increased) the good is
Inferior Good
The external environment, in a strategic planning context, includes:
limitations, opportunities, and threats coming from competitors, governmental agencies, and other external sources.
Consumer price index measure
Rate of inflation
Globalization presents risks for multinational firms, including challenges due to
cultural differences, political risk due to unstable political systems in developing nations, a shift in the economic balance of power to emerging markets, and supply chain management risks.
Forecasting methods relies mostly on judgment?
Delphi
In order to comply with a director’s duty of loyalty to a corporation, what action(s) should a director take when presented personally with a new business opportunity?
Offer the opportunity to the corporation and accept it only if the corporation rejects it
Business process re-engineering (BPR) identifies
identifies processes and workflows, analyzes processes and workflows, and designs processes and workflows
when projects have different expected returns, the project with the
lower coefficient of variation is preferred.
What is the effect on prices of U.S. imports and exports when the dollar depreciates?
Import prices will increase and export prices will decrease.
Change management control policies should contain which of the following elements?
1.Assess what impact each change will have on system availability, security, maintainability, and integrity 2. Require IT management to review, monitor, and approve all change requests 3. Ensure proper testing of changes before the changes are implemented in a production environment
What does business process re-engineering do within an organization?
Analyzes and designs workflows and processes
Change management control policies should contain which of the following elements?
1.Assess what impact each change will have on system availability, security, maintainability, and integrity 2. Require IT management to review, monitor, and approve all change requests 3. Ensure proper testing of changes before the changes are implemented in a production environment
What principle of the control environment states that NO more than 3 layers of organization existed b/w the CFO and the individual involved in financial reporting
Organizational Structure
Price is set BELOW the equilibruim price means:
Quantity demanded will exceed Quantity supplied causing a shortage
The simple interest method of calculating interest on loans does not consider:
interest on interest.
Computer program libraries can best be kept secure by:
restricting physical and logical access.
Regression analysis can be used to
develop simple regression equations of the type y = a + b(x), where a represents the constant (i.e., fixed) cost and b represents the variable rate
Change management control policies should contain which of the following elements?
1.Assess what impact each change will have on system availability, security, maintainability, and integrity 2. Require IT management to review, monitor, and approve all change requests 3. Ensure proper testing of changes before the changes are implemented in a production environment
can be adjusted to provide budgeted results based on actual production volume, by utilizing standard unit costs.
FLEXIBLE BUDGET
Who Is Hurt by Inflation:
A key group that is hurt by unanticipated inflation is those individuals who receive a fixed income.
Which of the following would not be appropriate to consider in the physical design of a data center?
Design of authorization tables for operating system access
The risk management process involves which of the following steps related to both internal and external controls?
Identifying and prioritizing risks and understanding their relevance; understanding the stakeholders’ objectives and their tolerance for risk; and developing and implementing appropriate strategies in the context of a risk management policy
Which of the following procedures should be included in the disaster recovery plan for an information technology department?
Identification of critical applications
Regression analysis can be used to
develop simple regression equations of the type y = a + b(x), where a represents the constant (i.e., fixed) cost and b represents the variable rate
The increase in real GDP per capital over time
Economic Growth
is necessary to determine an organization’s definition of a disaster and evaluate the effect of that disaster
Risk analysis
The purpose of regression analysis is
to use an independent variable to predict the value of another variable.It is a mathematical equation used to fit the best line possible to the observed data
The risk management process involves which of the following steps related to both internal and external controls?
Identifying and prioritizing risks and understanding their relevance; understanding the stakeholders’ objectives and their tolerance for risk; and developing and implementing appropriate strategies in the context of a risk management policy
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
Real GDP is rising & unemployment is falling
Expansionary Phase
responsible for maintaining the database and restricting access to the database to authorized users only
The Database Administrator or DBA
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
Fixed unit cost along the relevant range will
Decrease as volume increase
Is expensed sparetely on the income statement as a period expense
Abnormal Spoilage
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Before the initiative begins our answer was incorrect After completion of the initiative During the initiative
Which of the following would not be appropriate to consider in the physical design of a data center?
Design of authorization tables for operating system access
The use of an accelerated method instead of the straight-line method of depreciation in computing the net present value of a project has the effect of:
increasing the present value of the depreciation tax shield.
The use of an accelerated method instead of the straight-line method of depreciation in computing the net present value of a project has the effect of:
increasing the present value of the depreciation tax shield.
The federal budget deficit is the:
amount by which the federal government’s expenditures exceed its revenues in a given year.
Method by which to allocate joint costs
Average unit cost Relative weight, volume, or linear measure Relative sales value
What does business process re-engineering do within an organization?
Analyzes and designs workflows and processes
Access time in relation to computer processing is the amount of time it takes to:
retrieve data from memory.
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
The purpose of the TDRA (top-down risk assessment) is for the company to analyze the internal controls currently in place and to assess the effectiveness of those controls so as to avoid material misstatement in the company’s financial reporting. As part of that assessment process, which of the following items would be done?
As part of the TDRA, management will develop a list related to a particular account that would have a reasonable likelihood of material misstatement, focusing on problems that have been encountered in the past and the solutions that were developed to avoid such errors in the future.
To compare and contrast its financial information to published information reflecting optimal amounts
Benchmark
Which of the following is not a part of the change control process?
Controlling a control
The simple interest method of calculating interest on loans does not consider:
interest on interest.
Inflation may be measured using each of the following measures
gross domestic product deflator. wholesale price index. consumer price index
The forecasting technique most relevant for analyzing data prior to creation of a flexible budget is:
regression analysis.
The Sarbanes-Oxley Act changed the way financial reports are treated. What section of the act requires the CEO to review the financial statements?
Section 302
Price below the equilibrium price, which causes shortages to develop
Price Ceiling
There are three levels of interdependence in integrated planning:
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
Simultaneously produced products of more than nominal value are classified as
Joint Products
Inflation may be measured using each of the following measures
- gross domestic product deflator
- wholesale price index
- consumer price index
Gram Co. develops computer programs to meet customers’ special requirements. How should Gram categorize payments to employees who develop these programs?
By direct costs and value-adding costs
The benefits of debt financing over equity financing are likely to be highest in
High marginal tax rates and few noninterest tax benefits
is the level to which work groups are organized
Interdependence
The online data entry control called preformatting is:
the display of a document with blanks for data items to be entered by the terminal operator.
Which of the following describes an off-shore operation?
A U.S. company incorporates in Japan.
Cost allocation is the process of assigning indirect costs to a cost object. The indirect costs are grouped in cost pools and then allocated by a common allocation base to the cost object. The base that is employed to allocate a homogeneous cost pool should:
have a cause-and-effect relationship with the cost items in the cost pool.
The four general perspectives used to structure a balanced scorecard are
financial, customer, internal business processes, and learning and growth.
participative budgeting is driven by
Lower-level management and employees, the resulting budget should still be aligned with overall company strategy and top management will still have final approval
The purpose of the TDRA (top-down risk assessment) is for the company to analyze the internal controls currently in place and to assess the effectiveness of those controls so as to avoid material misstatement in the company’s financial reporting. As part of that assessment process, which of the following items would be done?
As part of the TDRA, management will develop a list related to a particular account that would have a reasonable likelihood of material misstatement, focusing on problems that have been encountered in the past and the solutions that were developed to avoid such errors in the future.
Who Is Hurt by Inflation:
A key group that is hurt by unanticipated inflation is those individuals who receive a fixed income.
A city ordinance that freezes rent prices may cause:
demand for rental space to exceed supply.
The McDougall Corporation wants to apply a performance measurement system that includes both financial and nonfinancial performance measures. What is most likely to be used by company management?
Balance scorecard
is the level to which work groups are organized
Interdependence
A manufacturer is considering using barcode identification for recording information on parts used by the manufacturer. A reason to use barcodes, rather than other means of identification, is to ensure that:
the movement of parts is easily and quickly recorded.
Cool Cola and Sparkle are substitute soft drinks. Which of the following would occur if the price of Cool Cola increased?
A The demand for Sparkle will increase and the demand curve shifts right.
Cost per unit measures
how cheaply goods can be turned into finished products
A disadvantage of the net present value method of capital expenditure evaluation is that it:
does not provide the true rate of return on investment.
Gram Co. develops computer programs to meet customers’ special requirements. How should Gram categorize payments to employees who develop these programs?
By direct costs and value-adding costs
There are three levels of interdependence in integrated planning:
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
They are dependent upon the level of production
Variable Costs
What makes money lose purchasing power:
Inflation
Consider cash receipt and cash disbursement processes as part of their risk assessment:
Financial Reporting Risk
Tale Company has two competitors in one of its major product segments. Recently one of those firms had its major product in that segment subjected to severe restrictions by a governmental regulatory body. These restrictions are likely to continue indefinitely. This action and its effect on Tale is an example of:
external environment.
What does integrated planning accomplish?
Participation of stakeholders and affected departments
The forecasting technique most relevant for analyzing data prior to creation of a flexible budget is:
regression analysis.
Real GDP in excess of potential GDP is often associated with
demand-pull inflation
Business Cycles result from shifts in
AD and/or AS
Which of the following is a tool that is useful in conducting a preliminary analysis of internal controls in an organization or organizational unit?
Flowcharting
What is the effect on prices of U.S. imports and exports when the dollar depreciates?
Import prices will and export prices will decrease.
The amount of inventory that a company would tend to hold in stock would increase as the:
cost of carrying inventory decreases.
Which of the following procedures should be included in the disaster recovery plan for an information technology department?
Identification of critical applications
Enhances the level of financial sophistication of the financial expert can serve as a resource for the audit committee
Is the primary benefit of having financial expert on a company’s audit committee
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Organizations must collect data before, during, and after the implementation to reach a desired target
Which of the following statements is true? One framework for analyzing a reliable system is: -
presented by the AICPA’s Trust Services. Trust Services provide assurance on information systems.
Computer program libraries can best be kept secure by:
restricting physical and logical access.
The external environment, in a strategic planning context, includes:
limitations, opportunities, and threats coming from competitors, governmental agencies, and other external sources.
relational databases uses
tables.
Inflation may be measured using each of the following measures
gross domestic product deflator. wholesale price index. consumer price index
is necessary to determine an organization’s definition of a disaster and evaluate the effect of that disaster
Risk analysis
A disadvantage of the net present value method of capital expenditure evaluation is that it:
does not provide the true rate of return on investment.
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
Examples of leading indicators
New unemployment claims,Orders for consumer goods, consumer expectations, and issuance of building permits, lenght of workweek,money supply, prices of selected stock
Product demand is inelastic if
With few substitutes are available
What does integrated planning accomplish?
Participation of stakeholders and affected departments
Which of the following is not a part of the change control process?
Controlling a control
Currently, the U.S. tax code requires that transfer prices for multinational corporations are “arms length transactions.” Methods that are prescribed by the IRS for setting arm’s length prices for tangible goods include all of the following except:
the target revenue approach. This method starts at a target selling price for the distribution affiliate that allows for a reasonable profit less the transfer price and any additional costs to cover overhead costs.
Focus on long term goal
Balance Scorecard
Which of the following would lead to a reduction in inflation
AD decrease AS increase
Off-shore operations” describes an organization
incorporating outside of the original jurisdiction of the primary operations.
Which of the following statements best describes the function of Job Control Language or JCL?
is a command language that initiates programs, specifies processing priorities, running sequences, databases used and files used. -
Who Is Hurt by Inflation:
A key group that is hurt by unanticipated inflation is those individuals who receive a fixed income.
The risk management process involves which of the following steps related to both internal and external controls?
Identifying and prioritizing risks and understanding their relevance; understanding the stakeholders’ objectives and their tolerance for risk; and developing and implementing appropriate strategies in the context of a risk management policy
Performance measures should assess how well subunits and managers are meeting:
goals of the organization.
In distributed or cooperative systems
the responsibility for ensuring that adequate backups are taken is the responsibility of user management because the systems are under the control of users.
The advantage of virtual storage or virtual memory is:
It saves time and money
What are the 5 major processes carried out by project management?
- Budget 2. Risk 3. Time 4. Quality 5. Resources
A natural extension of Activity Based Costing
Standard Costing System
Molly Moppet’s boss, Stan Stodgy, is resisting converting from relying solely on a static master budget to incorporating flexible budgeting into their company’s monthly budget and accountability process. Molly is attempting to explain the key difference between static and flexible budgets. Which of the following is this key difference?
A flexible budget is referred to as such because it can be adjusted to reflect different levels of production, whereas the master budget is based on one specific level of production -
Which of the following describes an off-shore operation?
A U.S. company incorporates in Japan.
A system where several minicomputers are connected for communication and data transmission purposes, but where each computer can also process its own data, is known as a:
distributed data processing network.
Globalization suggests that firms need to take a serious look at the variety of implications of globalization for business strategies. Among the major factors that need to be considered are:
the need for scenario planning, which causes the firm to look at a number of different future possibilities for the firm under varying conditions of high uncertainty.
Under COSO, according to SAS 78, management monitors controls for which of the following reasons?
To consider whether controls are operating as intended
A company has a current ratio of 4:1 and a quick ratio of 3:1. On the last day of the year, the company pays off an account payable. What is the impact of this transaction?
In a problem like this, it is often easy to set up an example. Assume, for example that the current ratio is $40,000 in current assets divided by $10,000 in current liabilities (a 4:1 ratio) and that the quick ratio is $30,000 in quick assets (current assets less inventory) divided by $10,000 in current liabilities (a 3:1 ratio). If a $5,000 account payable is paid with cash, the current ratio will be $35,000/$5,000 or 7:1 and the quick ratio will be $25,000/$5,000 or 5:1. The relative decrease in the current liabilities is greater than the impact on the assets. -
The Sarbanes-Oxley Act requires that all financial statements include:
all material off-balance-sheet liabilities, obligations, or transactions
Gram Co. develops computer programs to meet customers’ special requirements. How should Gram categorize payments to employees who develop these programs?
By direct costs and value-adding costs
Hierarchical databases
use tree structures to organize data
Documented out of pocket expenses:
Explicit Costs
The use of an accelerated method instead of the straight-line method of depreciation in computing the net present value of a project has the effect of:
increasing the present value of the depreciation tax shield.
The purpose of the TDRA (top-down risk assessment) is for the company to analyze the internal controls currently in place and to assess the effectiveness of those controls so as to avoid material misstatement in the company’s financial reporting. As part of that assessment process, which of the following items would be done?
As part of the TDRA, management will develop a list related to a particular account that would have a reasonable likelihood of material misstatement, focusing on problems that have been encountered in the past and the solutions that were developed to avoid such errors in the future.
By product is best described as:
A product that usually produces a small amount of revenue when compared to the main product revenue
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Before the initiative begins our answer was incorrect After completion of the initiative During the initiative
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Organizations must collect data before, during, and after the implementation to reach a desired target
The simple interest method of calculating interest on loans does not consider:
interest on interest.
Regression analysis can be used to
develop simple regression equations of the type y = a + b(x), where a represents the constant (i.e., fixed) cost and b represents the variable rate
Which of the following security controls might prevent unauthorized access to sensitive data via an unattended data terminal directly connected to a mainframe?
Automatic log-off of inactive users
There are three levels of interdependence in integrated planning:
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
The pressure for the department store company to be competitive is so great that there may be a significant risk that applications software could be
Best viewed as attention director and is an effective way to observe problems as they occur:
NON-financial
Which of the following is an example of collusive pricing?
Company A forms a secret agreement with Company B, its major competitor, to keep prices higher than they would be in a purely competitive environment -
The forecasting technique most relevant for analyzing data prior to creation of a flexible budget is:
regression analysis.
R Beck, Inc., has learned that 4,971 of 310,000 of its commercial DVDs over the past 12 months have arrived to the customer as blank discs with no data contained on them. Which improvement initiative would R Beck most likely adapt to reduce or eliminate the blank discs?
Six Sigma
The amount of inventory that a company would tend to hold in stock would increase as the:
cost of carrying inventory decreases.
Change management control policies should contain which of the following elements?
1.Assess what impact each change will have on system availability, security, maintainability, and integrity 2. Require IT management to review, monitor, and approve all change requests 3. Ensure proper testing of changes before the changes are implemented in a production environment
When real GDP is rising unemployment tends
to fall
Hierarchical databases
use tree structures to organize data
In order to comply with a director’s duty of loyalty to a corporation, what action(s) should a director take when presented personally with a new business opportunity?
Offer the opportunity to the corporation and accept it only if the corporation rejects it
A bond that is rated below BBB is referred to as a(n)
Junk bond
Which of the following security controls might prevent unauthorized access to sensitive data via an unattended data terminal directly connected to a mainframe?
Automatic log-off of inactive users
A project manager’s activities include all of the following, except:
establishing policies for IT.
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
A disadvantage of the net present value method of capital expenditure evaluation is that it:
does not provide the true rate of return on investment.
Hierarchical databases
use tree structures to organize data
Hierarchical databases
use tree structures to organize data
when the inflation rate increase
Nominal Interest Rate increases
Used to measure economic growth
Real GDP per capita
Diffusion involves
setting aside the conflict situation and concentrating on less controversial issues.
Globalization suggests that firms need to take a serious look at the variety of implications of globalization for business strategies. Among the major factors that need to be considered are:
the need for scenario planning, which causes the firm to look at a number of different future possibilities for the firm under varying conditions of high uncertainty.
Computer program libraries can best be kept secure by:
restricting physical and logical access.
What is a call option
The right to purchase a security at a specific price for a defined period of time
Business process re-engineering (BPR) identifies
identifies processes and workflows, analyzes processes and workflows, and designs processes and workflows
A city ordinance that freezes rent prices may cause:
demand for rental space to exceed supply.
Tale Company has two competitors in one of its major product segments. Recently one of those firms had its major product in that segment subjected to severe restrictions by a governmental regulatory body. These restrictions are likely to continue indefinitely. This action and its effect on Tale is an example of:
external environment.
Which of the following is a tool that is useful in conducting a preliminary analysis of internal controls in an organization or organizational unit?
Flowcharting
Which of the following is the most common formula to determine a company’s operating profit margin?
Operating profit/net sales
Which of the following is a tool that is useful in conducting a preliminary analysis of internal controls in an organization or organizational unit?
Flowcharting
Internal business processes should be measured based
on how well the company manages to do a particular process
The change control process helps
an organization identify a change, review the effectiveness of the change, approve the change, and implement the change.
The external environment, in a strategic planning context, includes:
limitations, opportunities, and threats coming from competitors, governmental agencies, and other external sources.
The use of an accelerated method instead of the straight-line method of depreciation in computing the net present value of a project has the effect of:
increasing the present value of the depreciation tax shield.
Short-term interest rates are:
generally lower than long-term rates.
The federal budget deficit is the:
amount by which the federal government’s expenditures exceed its revenues in a given year.
When using a flexible budget, a decrease in production levels within a relevant range:
decreases total costs.
The current ratio and the quick ratio (also known as the acid test ratio) are both liquidity ratios which are used to reflect a company’s ability to pay its current debts as they come due. What is the difference in the computation of the current ratio and the quick ratio?
A The quick ratio removes inventory from current assets and the current ratio does not.
Computer program libraries can best be kept secure by:
restricting physical and logical access.
the major advantage of debt financing is
is in lowering taxes. This advantage is greatest in periods of high marginal tax rates and few noninterest tax benefits.
Is a computer based trading network that lacks a single physical location and is NOT a stock exchange
NASDAQ
If the income elasticity of demand is positive(demand increase as income increase) the good is
Normal Good
Which of the following would not be appropriate to consider in the physical design of a data center?
Design of authorization tables for operating system access
What is the effect on prices of U.S. imports and exports when the dollar depreciates?
Import prices will increase and export prices will decrease.
A balanced scorecard will include strategic objectives of the organization. A statement indicates what each strategy is intended to achieve and those factors that are critical to success. Performance measures for that strategy are then included. What information is provided about the performance measures that are going to be used by an organization?
The reason why particular performance measures will be used to gauge success in meeting the strategy and how those measures will be tracked
Inflation may be measured using each of the following measures
gross domestic product deflator. wholesale price index. consumer price index
What does business process re-engineering do within an organization?
Analyzes and designs workflows and processes
Everything else equal, what happens to the market equilibrium for cell phones if input prices for making cell phones increases?
The supply of cell phones decreases and the price of cell phones rises.
What is the difference between a product and a period cost?
A Product costs can be associated with production but period costs are not and, thus, are recognized in the period incurred.
A computer system that converts the inputs into data that allows management to make unstructured decisions concerning the company’s future is:
a strategic information system.
Tale Company has two competitors in one of its major product segments. Recently one of those firms had its major product in that segment subjected to severe restrictions by a governmental regulatory body. These restrictions are likely to continue indefinitely. This action and its effect on Tale is an example of:
external environment.
What is the normal shape of the yield curve?
Upward sloping
When unemployment rate is rising
Inflation rate falls
Interest on debt is
tax deductible by a corporation, while dividends paid are not
A computer system that converts the inputs into data that allows management to make unstructured decisions concerning the company’s future is:
a strategic information system.
Studies consumers,producers, and supplies operating in a narrowly define market
Microeconomics
The purpose of the TDRA (top-down risk assessment) is for the company to analyze the internal controls currently in place and to assess the effectiveness of those controls so as to avoid material misstatement in the company’s financial reporting. As part of that assessment process, which of the following items would be done?
As part of the TDRA, management will develop a list related to a particular account that would have a reasonable likelihood of material misstatement, focusing on problems that have been encountered in the past and the solutions that were developed to avoid such errors in the future.
The federal budget deficit is the:
amount by which the federal government’s expenditures exceed its revenues in a given year.
A computer system that converts the inputs into data that allows management to make unstructured decisions concerning the company’s future is:
a strategic information system.
Which of the following is not a part of the change control process?
Controlling a control
The U.S. balance of trade is decreased by:
U.S. imports.
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Organizations must collect data before, during, and after the implementation to reach a desired target
Computer program libraries can best be kept secure by:
restricting physical and logical access.
A project manager’s activities include all of the following, except:
establishing policies for IT.
Interest on debt is
tax deductible by a corporation, while dividends paid are not
The forecasting technique most relevant for analyzing data prior to creation of a flexible budget is:
regression analysis.
Access time in relation to computer processing is the amount of time it takes to:
retrieve data from memory.
Interest on debt is
tax deductible by a corporation, while dividends paid are not
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
Performance measures should assess how well subunits and managers are meeting:
goals of the organization.
One common definition of a value chain is that it is - See more at: http://www.cpareviewforfree.com/exams.cfm?name=question&test_id=2957550#sthash.aq50fKO0.dpuf
the sequential set of primary and support activities that an enterprise performs to turn inputs into value-added outputs for its external customers.”
Company elects to balance its portfolio of risk with property investments on the cost of other states:
Risk Reduction
The following possiblitles deal with the ongoing or periodic assessment of the quality of internal control by an entity’s own mgmt
Monitoring Activities
Used when a firm sells its accounts receivable at a discount in order to get immediate cash?
FACTORING
Useful in conducting a preliminary analysis of internal controls in an organization or organizational unit:
Flowcharting
Simultaneously produced products while those of relatively small or insignificant sale value are classified as
By products
Security controls might prevent unauthorized access to sensitive data via an unattended data terminal directly connected to a mainframe?
Automatic log-off of inactive users
Function should maintain documentation as to the details of an applications program:
Applications Programmer
Fixed interest rate loans lock in a particular interest rate over the duration of a loan. If price levels and interest rates rise during this period:
borrowers benefit.
A manufacturer is considering using barcode identification for recording information on parts used by the manufacturer. A reason to use barcodes, rather than other means of identification, is to ensure that:
the movement of parts is easily and quickly recorded.
The relationship between the unemployment rate and the inflation rate is called
the Phillips curve
In order to comply with a director’s duty of loyalty to a corporation, what action(s) should a director take when presented personally with a new business opportunity?
Offer the opportunity to the corporation and accept it only if the corporation rejects it
The Sarbanes-Oxley Act changed the way financial reports are treated. What section of the act requires the CEO to review the financial statements?
Section 302
An investor uses risk analysis to measure the probability of the variability of future returns from a proposed investment. What is the approach that is based upon utility theory and compels the decision maker to choose at what point he or she is indifferent to the choice between a certain amount of money and the expected value of a risky amount?
Certainty equivalent adjustments
Which of the following is a tool that is useful in conducting a preliminary analysis of internal controls in an organization or organizational unit?
Flowcharting
The external environment, in a strategic planning context, includes:
limitations, opportunities, and threats coming from competitors, governmental agencies, and other external sources.
The Sarbanes-Oxley Act requires that all financial statements include:
all material off-balance-sheet liabilities, obligations, or transactions
Off-shore operations” describes an organization
incorporating outside of the original jurisdiction of the primary operations.
Change management control policies should contain which of the following elements?
1.Assess what impact each change will have on system availability, security, maintainability, and integrity 2. Require IT management to review, monitor, and approve all change requests 3. Ensure proper testing of changes before the changes are implemented in a production environment
When we observe a 5% increase in the price of product W there is a corresponding 2% increase in the quantity demanded for product Z. Which of the following is true?
Products W and Z are substitutes.
When currency depreciates in a country than its trading partners:
Goods will be cheap for foreigner while foreign goods will become expensive for its residents
A key components of control envirnoment
Management Action
A manufacturer is considering using barcode identification for recording information on parts used by the manufacturer. A reason to use barcodes, rather than other means of identification, is to ensure that:
the movement of parts is easily and quickly recorded.
R Beck, Inc., has learned that 4,971 of 310,000 of its commercial DVDs over the past 12 months have arrived to the customer as blank discs with no data contained on them. Which improvement initiative would R Beck most likely adapt to reduce or eliminate the blank discs?
Six Sigma
Flowcharting software could be used to reduce
the cost of preparing and updating flowcharts.
Who Is Hurt by Inflation:
A key group that is hurt by unanticipated inflation is those individuals who receive a fixed income.
How many levels of interdependence are included in integrated planning?
Three levels
Classification of simultaneously produced products as joint product or by products is determined by
their relatives sales values.
The use of an accelerated method instead of the straight-line method of depreciation in computing the net present value of a project has the effect of:
increasing the present value of the depreciation tax shield.
DuPont ROI (return on investment) analysis looks at the traditional ROI computation as being driven by two separate factors. What are those two factors?
Return on sales and asset turnover
Uses analysis of production processed to ensure that resources stay within target costs:
Kaizen
A minimum price set above the equilibrium price, which causes surpluses to develop
Price Floor
The U.S. balance of trade is decreased by:
U.S. imports.
When two investments have the same expected return, the project with the
lower standard deviation is preferred
There are three levels of interdependence in integrated planning:
a. Pooled interdependence: There is a common source of resource, but no interrelationship between the work groups. b. Sequential Interdependence: The work groups coordinate the flow of information, tasks, or resources from one group to another. c. Reciprocal Interdependence: Information, tasks, and resources are passed back and forth between the groups.
Flowcharting software could be used to reduce
the cost of preparing and updating flowcharts.
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Before the initiative begins our answer was incorrect After completion of the initiative During the initiative
Computer program libraries can best be kept secure by:
restricting physical and logical access.
A disadvantage of the net present value method of capital expenditure evaluation is that it:
does not provide the true rate of return on investment.
Which of the following steps in the strategic planning process should be completed first?
Create a mission statement.
The O’Flynn Company manufactures a product using a series of approximately 35 separate operations. The company attempts to gain as much efficiency as possible in this process by benchmarking. What is meant here by the use of benchmarking?
Benchmarking is a company’s attempt to compare activities in a process against a target level of performance
is necessary to determine an organization’s definition of a disaster and evaluate the effect of that disaster
Risk analysis
The Sarbanes-Oxley Act changed the way financial reports are treated. What section of the act requires the CEO to review the financial statements?
Section 302
The simple interest method of calculating interest on loans does not consider:
interest on interest.
Currently, the U.S. tax code requires that transfer prices for multinational corporations are “arms length transactions.” Methods that are prescribed by the IRS for setting arm’s length prices for tangible goods include all of the following except:
the target revenue approach. This method starts at a target selling price for the distribution affiliate that allows for a reasonable profit less the transfer price and any additional costs to cover overhead costs.
The distribution of overhead costs is known as:
Cost Allocation
A city ordinance that freezes rent prices may cause:
demand for rental space to exceed supply.
relational databases
use tables.
What are the two approaches to measuring GDP
Expenditure Approach Income Approach
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
The risk management process involves which of the following steps related to both internal and external controls?
Identifying and prioritizing risks and understanding their relevance; understanding the stakeholders’ objectives and their tolerance for risk; and developing and implementing appropriate strategies in the context of a risk management policy
Which of the following would not be appropriate to consider in the physical design of a data center?
Design of authorization tables for operating system access
When is data collection most critical in the implementation of an improvement initiative for a hospital attempting to improve emergency-room care patient satisfaction?
Organizations must collect data before, during, and after the implementation to reach a desired target
The risk management process involves which of the following steps related to both internal and external controls?
Identifying and prioritizing risks and understanding their relevance; understanding the stakeholders’ objectives and their tolerance for risk; and developing and implementing appropriate strategies in the context of a risk management policy
The U.S. balance of trade is decreased by:
U.S. imports.
Are opportunity costs of inputs supplied by the owners
Implicit Costs
Which of the following describes an off-shore operation?
A U.S. company incorporates in Japan.
Performance measures should assess how well subunits and managers are meeting:
goals of the organization.
Globalization suggests that firms need to take a serious look at the variety of implications of globalization for business strategies. Among the major factors that need to be considered are:
the need for scenario planning, which causes the firm to look at a number of different future possibilities for the firm under varying conditions of high uncertainty.
