Malpractice Liability Questions-Wrong Flashcards
In a macroeconomic free-market flow model, which of the following would be considered leakages?
Savings Taxes
Yes Yes
Yes No No Yes No No
Yes Yes
In a macroeconomic free-market flow model, leakages result when income is used for purposes other than domestic consumption. Both savings and taxes (as well as payments for imports) are uses of income for purposes other than domestic consumption.
Wrong Answer I chose was
Yes No
In a macroeconomic free-market flow model, leakages result when income is used for purposes other than domestic consumption. Not only are savings considered leakages in a free-market flow model, but so are taxes (and payments for imports).
The Performance Standards focus on seven primary themes around which the remaining Performance Standards are organized. Each of the following key words or phrases is associated with these seven primary themes except
A. Purpose, authority, and responsibility. B. Managing the internal audit activity. C. Nature of Work. D. Engagement Planning.
A. Purpose, authority, and responsibility.
“Purpose, Authority, and Responsibility” is associated with the Attribute Standards, specifically Standard 1000.
Wrong Answer I chose was
D. Engagement Planning.
This is one of the seven primary Performance Standards: (1) Managing the Internal Audit Activity; (2) Nature of Work; (3) Engagement Planning; (4) Performing the Engagement; (5) Communicating Results; (6) Monitoring Progress; and (7) Resolution of Senior Management’s Acceptance of Risks.
Over the past 50 years, how has the share of total U.S. purchases and output represented by imports and exports, respectively, changed?
Imports as Share of Purchases Exports as Share of Output Increased Increased Increased Decreased Decreased Increased Decreased Decreased
Increased Increased
Over the past 50 years, U.S. imports as a share of GDP and exports as a share of GDP have both increased.
Increased Decreased
Over the past 50 years, not only have U.S. imports as a share of GDP increased, but so also have U.S. exports as a share of GDP.
Which of the following is most likely to increase aggregate demand?
A. Increased savings by consumers.
B. Increased spending on imported goods.
C. Increasing tax rates and tax revenues.
D. Increased business investment.
D. Increased business investment.
An increase in business investment is likely to increase aggregate demand. An increase in business investment in inventory, durable equipment, and construction will increase demand for resources and labor. Furthermore, payments for those resources and labor will, in turn, increase demand from suppliers and consumers.
Wrong Answer is
B. Increased spending on imported goods.
An increase in spending on imported goods is not likely to increase aggregate demand, but to decrease aggregate demand. To the extent that consumers and businesses buy goods from abroad, other things being equal, aggregate demand in the domestic economy will decrease.
What is an example of the use of the cloud to access software and programs?
A. IaaS B. PaaS C. SaaS D. SAP
C. SaaS
SaaS is the use of the cloud to access software.
Wrong Answer I chose was
B. PaaS
PaaS is the use of the cloud to create (not access) software.
Which of the following statements is correct concerning the security of messages in an electronic data interchange (EDI) system?
A. Removable drives that can be locked up at night provide adequate security when the confidentiality of data is the primary risk. B. Message authentication in EDI systems performs the same function as segregation of duties in other information systems. C. Encryption performed by a physically secure hardware device is more secure than encryption performed by software. D. Security at the transaction phase in EDI systems is not necessary because problems at that level will be identified by the service provider.
C. Encryption performed by a physically secure hardware device is more secure than encryption performed by software.
Encryption can be used to ensure the privacy and security of EDI messages both during transmission and when stored. Hardware-based encryption is inherently more secure than software-based encryption, as software can be more easily accessed and altered than hardware
Wrong Answer
B. Message authentication in EDI systems performs the same function as segregation of duties in other information systems.
Message authentication ensures that the message comes from an authorized source, but does not ensure privacy and security.
Which of the following standard costing variances would be least controllable by a production supervisor?
A. Overhead volume. B. Overhead efficiency. C. Labor efficiency. D. Material usage.
A. Overhead volume.
The overhead volume variance equals the difference between the master budget for fixed overhead and applied fixed overhead. The variance has one cause only: producing a number of units different from that specified in the master budget. The variance can be broken down into the following:
(master budget production volume - actual production volume)(PF)(SQ),
where PF is the predetermined overhead rate for fixed overhead based on direct labor hours, and SQ is the standard quantity of direct labor hours per unit.
The production supervisor has less control over the actual production volume than the factors underlying the other variances listed, because actual production is strongly influenced by sales demand, a factor not under the control of the production supervisor. The supervisor has some responsibility for the volume level, however, when the volume falls below required levels due to maintenance and other internal problems. But typically, the volume variance is not one of the variances that is considered controllable by the production supervisor.
Wrong answer that I chose was
B. Overhead efficiency.
The overhead efficiency variance is the difference between actual direct labor hours worked, and the standard quantity of hours allowed for actual production, times the variable overhead rate per hour.
Although this variance is only partially controllable by the production supervisor, it is considered somewhat more controllable than the overhead volume variance. The supervisor is responsible for assigning workers to jobs based on skill level, for example, and thus, can have some effect on the overhead efficiency variance.
Company specific risk is also known as which one of the following?
A. Market-related risk. B. Business risk. C. Unsystematic risk. D. Non-diversifiable risk.
C. Unsystematic risk.
Company specific risk (also called firm-specific risk and diversifiable risk) are unsystematic risk. This risk includes those elements of business risk that can be eliminated through diversification. Specifically, this risk can be mitigated by diversification of projects, investments, etc.
Wrong Answer that I chose
D. Non-diversifiable risk.
Non-diversifiable risk is another name for market-related or systematic risk. This risk includes those elements of business risk that cannot be eliminated through diversification because they are derived from the general economic and political environment that will affect all undertakings. It includes such factors as inflation/deflation, general taxes, and general levels of interest in the economy.
Database management software is considered:
A. Outerwear. B. Software. C. Middleware Database management software is also called middleware. D. B and C. Database management software is considered both software and middleware.
D. B and C.
Database management software is considered both software and middleware.
Wrong Answer I chose was
C. Middleware
Database management software is also called middleware.
Information that relates to a firm’s solvency is used primarily to assess a firm’s ability to
A. Convert assets to cash. B. Pay it debts. C. Generate profits. D. Collect its receivables in a timely manner.
B. Pay it debts.
Measures related to the solvency of a firm are primarily concerned with the ability of a firm to pay its debts as they become due.
Wrong Answer that I chose was
A. Convert assets to cash.
Measures related to the solvency of a firm are not primarily concerned with a firm’s ability to convert assets to cash, but rather with a firm’s ability to pay its debts as they become due.
What is an internal rate of return?
A. A net present value. B. An accounting rate of return. C. A payback period expected from an investment. D. A time-adjusted rate of return from an investment.
D. A time-adjusted rate of return from an investment.
An internal rate of return is a time-adjusted rate of return from an investment. In capital budgeting an internal rate of return approach (also called a time adjusted rate of return) evaluates a project by determining the discount rate that equates the present value of the project’s future cash inflows with the present value of the project’s cash outflows. The rate so determined is the expected rate of return to be earned by the project.
Wrong Answer that I chose was
A. A net present value. A net present value is the difference (net) of the present value of cash inflows and the present value of cash outflows. In capital budgeting, this approach calculates and compares the present value of cash inflows from an investment (e.g., project) with the present value of cash outflows of the investment. The difference is the net present value of the investment at the time of the analysis. That net present value calculation uses an assumed discount (or hurdle) rate of return and determines whether or not the net is zero, or positive (accept), or negative (reject); it does not determine an internal rate or return.
Foreign direct investment occurs when a domestic entity invests in
foreign bonds foreign production facilities
Yes Yes
Yes No No Yes No No
No Yes
Foreign direct investment would not include investments in foreign bonds, but would include investments in foreign production facilities. Foreign direct investment involves investments in non-monetary assets (e.g., property, plant, equipment, etc.) in a foreign location.
Wrong Answer that I chose was
Yes Yes
Foreign direct investment would include investments in foreign production facilities, but would not include investments in foreign bonds. Foreign direct investment involves investments in non-monetary assets (e.g., property, plant, equipment, etc.) in a foreign location.
