- (Exam Topic 1)
Which of the following statements is true regarding the use of public key encryption to secure data while it is being transmitted across a network?

1. A. Both the key used to encrypt the data and the key used to decrypt the data are made public.
2. B. The key used to encrypt the data is kept private but the key used to decrypt the data is made public.
3. C. The key used to encrypt the data is made public but the key used to decrypt the data is kept private.
4. D. Both the key used to encrypt the data and the key used to decrypt the data are made private.

Correct Answer: C

- (Exam Topic 2)
Which of me following is true of matrix organizations?

1. A. A unity-of-command concept requires employees to report technically, functionally, and administratively to the same manager
2. B. A combination of product and functional departments allows management lo utilize personnel from various functions
3. C. Authority responsibility and accountability of the units involved may vary based on the project's life, or the organization's culture
4. D. It is best suited for firms with scattered locations or for multi-lir
5. E. large-scale firms

Correct Answer: B

- (Exam Topic 2)
If a just-in-time purchasing system is successful in reducing the total inventory costs of a manufacturing company, which of the following combinations of cost changes would be most likely to occur?

1. A. 1
2. B. 2
3. C. 3
4. D. 4

Correct Answer: D

- (Exam Topic 2)
The greatest advantage of functional departmentalization is that it:

1. A. Facilitates communication between primary functions.
2. B. Helps to focus on the achievement of organizational goals.
3. C. Provides for efficient use of specialized knowledge .
4. D. Accommodates geographically dispersed companies

Correct Answer: C

- (Exam Topic 1)
Which of the following statements is true regarding outsourced business processes?

1. A. Outsourced business processes should not be considered in the internal audit universe because the controls are owned by the external service provider.
2. B. Generally, independence is improved when the internal audit activity reviews outsourced business processes.
3. C. The key controls of outsourced business processes typically are more difficult to audit because they are designed and managed externally.
4. D. The system of internal controls may be better and more efficient when the business process is outsourced compared to internally sourced.

Correct Answer: D