Exam 2 Flashcards
Audits are…
Detective activities
Required vacations are…
Detective activities
Separation of duties are…
Preventative activities
Background investigations are…
Detective activities
Use of passwords are…
Preventative activities
Required authorizations are…
Preventative activities
Rotation of duties are…
Detective activities
Required approvals are…
Preventative activities
Alarm systems are…
Preventative activities
Use of locks are…
Preventative activities
Variance analysis are…
Detective activities
Reconciliations are…
Detective activities
Security guards and cameras are…
Preventative activities
Educations, training and monitoring of employees are…
Preventative activities
Physical inventories are…
Detective activities
Which of the following does not support business process management?
Systems
Business process management is supported by…3
1 approaches
2 techniques
3 measures
An example of a detective control activity would be…
Reconciliations
In relation to the internal control process, control sufficiency is…
Group of controls with a variety of degrees of precision necessary to achieve control objective
Control precision 2
1 Alignment between risk and control activity
2 designed to mitigate risk
Control sufficiency 2
1 group of controls with variety of degrees of precision
2 necessary to achieve control objective
When production levels increase but stay in the relevant range,
What happens to total fixed costs?
2) Total fixed costs per unit?
Total fixed costs remain unchanged
2 total fixed costs per unit stay the same
If after tax savings are $100,000 and depreciation is $50,000 per year, what is the before tax cash savings with a 40% tax rate?
$100,000 - $50,000 x 0.4 = $80,000
$80,000/0.6
Technique for managing Just in time inventory developed by the Japanese?
Kanban
Economic exposure, define, give example
Represents impact of exchange rate fluctuations on firm’s future cash flow
Which of the following areas of responsibility are normally assigned to systems programmer in a computer systems environment?
Operating systems and compilers
the best set of controls for a payroll system includes, batch and…
Hash totals
the best set of controls for a payroll system includes record…
Record counts of each run
the best set of controls for a payroll system includes proper…
Separation of duties
the best set of controls for a payroll system includes passwords…
And user codes
the best set of controls for a payroll system includes backup copies of…
Activities and master files
COBIT applies to…
Information technology
Expected market value when protected with frost 80,000
- expected market value when not protected with frost 40,000
Change in EMV when protected from frost. 40,000
What is the probability to being indifferent to spending $10,000 for frost protection?
Cost of protection = probability if frost x change in EMV
probability of frost = 10,000/40,000
Check digit is an example of…
An input control
Purchase of the firm’s treasury stock increases…
A firm’s financial leverage
Treating dividends as an active policy strategy assumes that…
Dividends provide information to the market
The method that should be used to estimate a unique product is…
Learning curve analysis
What kind of inflation occurs when cost of production inputs such as materials or labor increase?
Cost push inflation
In event of a flood near a data center employees may…
Not be able to report to work
If one country has a 20% tax rate and another has a 40% tax rate, a multinational corporation should have the highest transfer price set in…
The country with the 20% tax rate
Calculate overhead applied and overhead rate equations?
Overhead rate =
estimated annual overhead/estimated annual direct labor
Applied overhead = overhead rate x estimated annual direct labor
Management reporting systems rely on…
Both internally and externally reported data
Margin of safety equation
Margin of safety = budgeted sales - break even sales
The working capital financing policy that subjects the firm to the greatest risk of being unable to meet the firm’s maturing obligations is the policy that finances…
Permanent current assets with short term debt
