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IIA Business Knowledge for Internal Auditing Sample Questions (Q153-Q158):

NEW QUESTION # 153
Management is designing its disaster recovery plan. In the event that there is significant damage to the organization's IT systems this plan should enable the organization to resume operations at a recovery site after some configuration and data restoration. Which of the following is the ideal solution for management in this scenario?

• A. A warm recovery plan.
• B. A hot recovery plan.
• C. A manual work processes plan
• D. A cold recovery plan.

Answer: A

NEW QUESTION # 154
Which of the following statements is true with respect to value engineering?
I. Value engineering is a means of reaching targeted cost levels.
II. Value engineering is the Japanese concept that emphasizes continuous improvement in all phases of company activities through numerous minor changes.
III.
Value engineering requires distinguishing between cost incurrence and locked-in costs, with an emphasis on controlling costs at the design stage.

• A. Items I and II only.
• B. Items I, II, and III.
• C. Items I and III only.
• D. Items II and III only.

Answer: C

Explanation:
Value engineering is a means of reaching targeted cost levels. Value engineering requires distinguishing between cost incurrence and locked-i n costs, with emphasis on controlling costs at the design stage. It is not Japanese.

NEW QUESTION # 155
Which of the following should be included m a company's year-end inventory valuation?

• A. Company goods tor sale on consignment at a consignment shop
• B. Company goods that were sold during the year free on board shipping point that have been shipped but not yet received by the customer
• C. Goods on consignment, which the company is trying to sell for its customers
• D. Goods purchased by the company free on board destination mat have not yet been received

Answer: B

NEW QUESTION # 156
The purchase of treasury shares with an entity's surplus cash:

• A. Increases an entity's equity.
• B. Dilutes an entity's earnings per share.
• C. Increases an entity's financial leverage.
• D. Increases an entity's interest coverage ratio.

Answer: C

Explanation:
A purchase of treasury share involves a decrease in assets usually cash) and a corresponding decrease in shareholders' equity. Thus, equity is reduced and the debttoequity ratio and financial leverage increase.

NEW QUESTION # 157
Which of the following actions should an internal auditor take to clean the data obtained for analytics purposes?

• A. Eliminate duplicate records.
• B. Define analytics objectives and establish outcomes.
• C. Adopt standardized data analysis software.
• D. Deploys data visualization tool.

Answer: A

NEW QUESTION # 158
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