Questions and Answers: 166
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NEW QUESTION: 1
Regardless of whether a company develops, buys, leases, or pays for the use of the software for EDI transmissions, internal audit should be responsible for evaluating whether the software:
A. Is backed up adequately to permit recovery.
B. Meets business objectives.
C. Was developed in a controlled environment.
D. Was acquired with adequate review by legal counsel.
Answer: B
Explanation:
An EDI application should meet business objectives and satisfy user and control requirements. The internal auditors should consider the organization's important EDI applications because they represent significant risk exposures and control problems. This role is within the scope of work of the internal auditors, who are charged with examining and evaluating internal control and the quality of performance in carrying out assigned responsibilities.
NEW QUESTION: 2
What should keyword1 and keyword2 be respectively, in order to produce output 2345?
A. continue, break
B. break, break
C. break, continue
D. continue, continue
Answer: D
NEW QUESTION: 3
The adverse effects of events causing an auditor to believe there is substantial doubt about an entity's
ability to continue as a going concern would most likely be mitigated by evidence relating to the:
A. Feasibility of plans to purchase leased equipment at less than market value.
B. Marketability of assets that management plans to sell.
C. Committed arrangements to convert preferred stock to long-term debt.
D. Ability to expand operations into new product lines in the future.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Choice "C" is correct. The adverse effects of events causing an auditor to believe there is a substantial
doubt about an entity's ability to continue as a going concern would most likely be mitigated by evidence
relating to the marketability of assets that management plans to sell. By providing evidence that there is a
ready market for assets that could be converted to cash, management has demonstrated that the
company could remain in operation for a longer period of time, thereby mitigating the need for an
explanatory paragraph describing the matter.
Choices "A", "B", and "D" are incorrect. Evidence regarding the ability to expand operations into new
product lines in the future, the feasibility of plans to purchase leased equipment at less than market value,
or committed arrangements to convert preferred stock to long-term debt would not be sufficient to mitigate
doubts about an entity's ability to continue as a going concern, unless it could also be demonstrated that
the events would provide adequate cash flow to fund operations for at least the next year.