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NEW QUESTION 163
T has its computer facilities in a building adjacent to its headquarters Severe structural problems have been discovered with this building and T has been advised that the only option is demolition and rebuild This leaves T with strategic decisions to make about its IT provision and it has decided to investigate the outsourcing of its services.
Which TWO of the following factors should T consider as most important at this stage?
- A. A supplier who can act as its agent in choosing the cheapest options
- B. A supplier who provides a wide range of services
- C. A supplier who has facilities conveniently located close to its headquarters
- D. A supplier with a long history of providing outsourcing services
- E. A supplier who can act as a partner in considering all its business needs
Answer: C,D
NEW QUESTION 164
Y plc, a pharmaceutical company, has dealt with a number of risks in the manner indicated below.
Use the TARA framework to classify each of Y plc's responses.
Answer:
Explanation:
NEW QUESTION 165
C is an accounts clerKwho is supposed to sign each invoice as evidence that she has conducted checks against supporting documents Sometimes C signs invoices without making these checks D is a member of the internal audit team He has been told to conduct compliance tests on whether C is checking the invoices property Which of the following would grve D a false sense of assurance that C's checks have been in operation?
Select ALL that appry
- A. D worked at a spare desk in the accounts department and quietly watched C without telling her She checked every invoice carefully while D was present
- B. asked C a series of open-ended questions about the operation of the purchases system She did not mention anything about detailed checks of invoices against documents
- C. D reviewed a sample of invoices for purchases of plant and equipment and found that C had not signed them C explained that she believed that those were authonsed by someone else although the accounts manual indicates that it was her responsibility
- D. D examined a sample of invoices to make sure that they had been signed by C AH had been signed selected a sample of purchase invoices and compared each to the supporting documents that C is supposed to review Every one of D's invoices was supported by the related documents
Answer: A,B,D
NEW QUESTION 166
V buys vegetables and fruit from three farms located in a different part of V's country and sells them to large supermarket chains.
A recent newspaper magazine had an article on these farms showing that the farms employ illegal immigrants whose status was used by the factory's owners to force them to work for low wages and in unpleasant conditions. They are forced to live in small overcrowded caravans with no running water. They are also given meals which are cold and poor quality. These farms are located in a developed country with strong labour laws.
Classify each of the following statements as true or false.
Answer:
Explanation:
NEW QUESTION 167
Which of the following are true of an effective risk management culture?
- A. Risk management should be regarded as part of the overall business strategy.
- B. Responsibility for risk management should be devolved to a risk manager.
- C. Staff should be penalised for being associated with negative events.
- D. The directors should take an active interest in risk management.
- E. All risk should be eliminated.
- F. All staff should be aware of risks affecting the entity.
Answer: A,D,F
NEW QUESTION 168
S Doc is an out-of-hours service provided by a country's government. The service allows members of the public to call and speak to a nurse who can advise on medical situations which are not obviously emergencies.
Depending on the situation the caller can be referred to the full emergency services, or be advised to go to Accident and Emergency at the nearest hospital. Alternatively, a callout from a general practitioner (GP) can be organised; the caller can be advised of where GP services are available; advice can be given over the phone; or a decision can be taken that no further action is required at least until normal services resume on the next working day.
There has been a suggestion that the nurses who take these calls could be replaced by suitably trained operatives who have available to them a specially designed expert system.
Which of the following are advantages of using an expert system instead of nurses?
- A. The expert system will always follow the same path whereas the nurses may have more knowledge about some health issues and very little about others.
- B. The use of an expert system would ensure that only relevant questions were asked of the caller and that operatives did not miss something vital due to distraction or fatigue.
- C. Using an expert system would make operatives less inclined to feel sorry for the caller and ensure that only relevant facts were considered in coming to a decision.
- D. Some callers may present with complicated scenarios that a non-medically trained operative or expert system would be unable to recognise (for example, psychological issues).
- E. The operatives would be too careful and therefore would recommend unnecessary treatments or interventions.
Answer: A,B,C
NEW QUESTION 169
B uses a balanced scorecard to monitor the performance of its divisions.
Classify each of the following decisions taken by a division's management team as either commercially sound or dysfunctional.
Answer:
Explanation:
NEW QUESTION 170
In-depth analysis showing the identification and quantification of exposure to financial risk has become more accessible in recent years. Several varieties of analysis are now available.
Which of the following statements are true?
- A. Regression analysis is easy to understand and implement, and based on future expectations.
- B. Monte Carlo analysis is a modelling technique which can be applied to financial analysis, allowing thousands of variables to be integrated together to show standard behaviours and outlier abnormalities requiring detailed understanding in a 'what if?' environment.
- C. Value at risk analysis, which has become available through increased computing power, is now easier to implement and can cater for extreme market conditions.
- D. Simulation, which is becoming available through standard computing packages, is complex to implement but dynamic and adaptable to cater for different assumptions.
- E. Sensitivity analysis involves checking the performance of a financial risk model against the various interrelationships between the different input variables in the model.
Answer: B,D
NEW QUESTION 171
ABC has recently appointed a Chief Information Officer who has announced that he wants to start a major clean up starting with all desktop and laptop equipment.
Which THREE of the following measures should be adopted to help enhance security'?
- A. instruct all staff not to click on any links in emails from anyone outside the company
- B. Set up a hot line in the service desk for any security queries.
- C. Issue a corporate policy on email use
- D. Make security training available to anyone who wants it.
- E. Make an employee of the month award for whoever spots the most bogus emails.
- F. Automate anti-virus update processes so they cannot be avoided
Answer: A,C,F
NEW QUESTION 172
B is a quoted construction company. Its Board consists of qualified and experienced engineers Which TWO of the following statements are correct?
- A. The greater consistency arising from the composition of B's Board will be beneficial
- B. The quality of Board decisions may decrease.
- C. Creating a nominations committee from B's Board will resolve any issues
- D. B's Board cannot be blamed for recruiting like-minded individuals
- E. There is a greater risk of B's Board making strategic errors.
Answer: A,C
NEW QUESTION 173
Z is a multinational pharmaceuticals company with operations across Europe, America and Asia.
It is currently investigating the possibility of setting up a chemical and specialist production facility in South America. This would be a multi $billion investment. What steps should Z take to manage the following risks in this long term venture.
Answer:
Explanation:
NEW QUESTION 174
A UK manufacturing company has simultaneously:
* purchased a put option to sell USD 1million at an exercise price of GBP1.00 = USD1.65
* sold a call option that grants the option holder the right to buy USD 1million at a price of GBP1.00 = USD1.61 (this option has the same maturity date as the put).
Which of the following is a valid explanation for entering into these option positions?
- A. The company expects to pay USD 1million to a supplier and wishes to obtain additional protection against the USD strengthening beyond GBP 1.00 = USD 1.65.
- B. The company expects to pay USD 1million to a supplier and wishes to offset the premium from the call option against the cost of the put option.
- C. The company expects to receive USD 1million from a customer and wishes to offset the cost of the put option by the premium on the call option.
- D. The company expects to receive USD 1million from a customer and wishes to obtain an additional benefit if the USD strengthens beyond GBP 1.00 = USD 1.61.
Answer: C
NEW QUESTION 175
A government department is conducting a value for money audit on a school.
The school's pupils sit leaving exams. Classify each of the audit tests as either economy and efficiency or effectiveness.
Answer:
Explanation:
NEW QUESTION 176
The safety guard on a piece of equipment was broken. The factory manager suspended an operator who refused to operate the equipment until it was repaired. The factory manager paid another operator a bonus for operating the damaged equipment until the safety guard could be repaired.
What does this incident say about the control environment within that factory?
- A. Employees are motivated to maintain productivity.
- B. Management is not particularly concerned with managing risks.
- C. Management has a proportionate and considered attitude towards risk.
- D. Employees will perceive that management does not care about health and safety risks.
- E. This factory's safety record is likely to be poor.
Answer: B,D,E
NEW QUESTION 177
Match the descriptions shown in the boxes below with the method of quantifying risk exposure it best describes.
Answer:
Explanation:
NEW QUESTION 178
The internal audit department has just completed an investigation into the HR department's procedures relating to new staff appointments The head of HR is unhappy with the draft report prepared by the lead internal auditor The report lists several cases in which appointments were made despite the fact that one or more of the entity's formal procedures were not followed The head of HR has complained that the internal auditor's comments do not allow for the fact that the HR department's staff members are often very busy and do not always have time to conduct every check.
The internal auditor's comments also reflect a failure to complete documents None of the omissions have led to the appointment of an unsuitable member of staff Which TWO of the following statements reflect an appropriate response by the board of directors to this report?
- A. The board should be seen to support the internal audit
- B. The errors are immaterial because they did not lead to an inappropriate appointment
- C. The members of staff responsible for these omissions should be subjected to disciplinary action
- D. Ignoring a compliance error altogether may undermine the control environment
- E. The procedures should be removed if the HR department staff believe that they are unnecessary
Answer: A,C
NEW QUESTION 179
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