- (Exam Topic 2)
An organization requires an average of 58 days to convert raw materials into finished products to sell. An average of 42 additional days is required to collect receivables. If the organization takes an average of 10 days to pay for the raw materials, how long is its total cash conversion cycle?

1. A. 26 days.
2. B. 90 days.
3. C. 100 days.
4. D. 110 days.

Correct Answer: B

- (Exam Topic 1)
Which of the following best describes an objective for an audit of an environmental management system?

1. A. To assess whether an annual control review is necessary.
2. B. To determine conformance with requirements and agreements.
3. C. To evaluate executive management oversight.
4. D. To promote environmental awareness.

Correct Answer: B

- (Exam Topic 2)
in which of the following technical infrastructure audits should attention be turned to physical security and environmental controls?

1. A. Database review
2. B. Data center review
3. C. Network configuration review
4. D. Operating systems review

Correct Answer: B

- (Exam Topic 2)
The board has requested that the internal audit activity be involved in all phases of the organization's outsourcing of its network management. During which of the following stages is the internal auditor most likely to verify that the organization's right-to-audit clause is drafted effectively?

1. A. Implementation and transition phase.
2. B. Monitoring and reporting phase
3. C. Decision-making and business-case phase.
4. D. Tendering and contracting phase.

Correct Answer: D

- (Exam Topic 1)
Which of the following engagement observations would provide the least motivation for management to amend or replace an existing cost accounting system?

1. A. The distorted unit cost of a service is 50 percent lower than the true cost, while the true cost is 50 percent higher than the competition's cost.
2. B. The organization is losing $1,000,000 annually because it incorrectly outsourced an operation based on information from its current system.
3. C. The cost of rework, hidden by the current system, is 50 percent of the total cost of all services.
4. D. 50 percent of total organizational cost has been allocated on a volume basis.

Correct Answer: D