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IIA Business Knowledge for Internal Auditing Sample Questions (Q131-Q136):

NEW QUESTION # 131
Which of the following statements is most accurate concerning the management and audit of a web server?

A. The file transfer protocol (FTP) should always be enabled
B. The simple mail transfer protocol (SMTP) should be operating under the most privileged accounts
C. The number of ports and protocols allowed to access the web server should be maximized
D. Secure protocols for confidential pages should be used instead of clear-text protocols such as HTTP or FTP

Answer: D

Explanation:
Reference: IIA Business Knowledge for Internal Auditing, Web Server Security section.

NEW QUESTION # 132
A manufacturer ss deciding whether to sell or process materials further. Which of the following costs would be relevant to this decision?

A. Variable manufacturing expenses, incremental revenue, and joint costs
B. Joint costs, incremental processing costs, and variable manufacturing expenses.
C. Incremental processing costs, incremental revenue, and variable manufacturing expenses.
D. Incremental revenue, joint costs, and incremental processing costs.

Answer: C

Explanation:
When deciding whether to sell a product as-is or process it further, a manufacturer should consider only relevant costs-those that will change based on the decision.
* Why Option A (Incremental processing costs, incremental revenue, and variable manufacturing expenses) is Correct:
* Incremental processing costs: These are additional costs required to process the material further, making them directly relevant.
* Incremental revenue: The additional revenue that would be generated if the product is processed further is a key factor in decision-making.
* Variable manufacturing expenses: These costs change with production levels, making them important in the decision-making process.
* Why Other Options Are Incorrect:
* Option B (Joint costs, incremental processing costs, and variable manufacturing expenses):
* Incorrect because joint costs (costs incurred before the split-off point) are sunk costs and are not relevant in the decision.
* Option C (Incremental revenue, joint costs, and incremental processing costs):
* Incorrect because, again, joint costs are not relevant to the decision.
* Option D (Variable manufacturing expenses, incremental revenue, and joint costs):
* Incorrect because joint costs should be ignored in a sell-or-process-further decision.
* IIA GTAG - "Auditing Cost Accounting Decisions": Discusses relevant costs in decision-making.
* IFRS & GAAP Cost Accounting Standards: Explain cost classification and decision-making.
* COSO Internal Control - Integrated Framework: Recommends proper cost allocation methods for financial decisions.
IIA References:

NEW QUESTION # 133
The defined post employment benefit obligation of an entity includes benefit obligations to <List A> employees at <List B> salary levels. List A List B:

A. Option C
B. Option A
C. Option B
D. Option D

Answer: D

Explanation:
The measurement of a postemployment benefit obligation includes estimates of future salary increases, the benefits defined in the plan, the benefits arising from any constructive obligation beyond the terms of the plan, and estimates of future changes in state benefits that affect the level of plan benefits. The possibility that nonvested projected benefits will not vest is a factor in the measurement of the defined benefit obligation, but it does not aft I file existence of the obligation.

NEW QUESTION # 134
Setting the introductory price of a new product relatively high is:

A. Penetration pricing.
B. Market-based pricing.
C. Price skimming.
D. Pricing by intermediaries.

Answer: C

Explanation:
Price (market) skimming is the practice of setting an introductory price relatively high to attract buyers who are not concerned about price and to recover research and development costs rather quickly. The opposite approach is to use penetration pricing, which involves setting a relatively low price to gain deep market penetration quickly.

NEW QUESTION # 135
Under throughput costing, the only cost considered to be truly variable in the short run is:

A. All manufacturing costs are considered variable.
B. Direct materials.
C. Manufacturing overhead.
D. Direct labor.

Answer: A

Explanation:
Throughput costing, also called super variable costing, recognizes only direct materials costs as being truly variable and thus relevant to the calculation of throughput margin.

NEW QUESTION # 136
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