NewBEC

Question 1

Most effective external monitoring institution?

Answer 1

External auditors. Bc SEC depends on external auditors to monitor corporations

Question 2

Chief audit executive should report to

Answer 2

CEO not CFO

Question 3

Who is ultimately responsible for ERM?

Answer 3

CEO should take ownership

Question 4

Determines disaster and evaluates effect

Answer 4

risk analysis. backup analysis, vendor analysis and contingent analysis are done to react to risk analysis

Question 5

SOX requires to publish what type of info?

Answer 5

scope and capabilities of the internal control system and include procedures for financial reporting

Question 6

Internal auditors assess organization’s risk by determining

Answer 6

• objectives support and align with mission,
• significant risks are identified and assessed,
• risk responses are selected align with appetite,
• information is captured and communicated

Question 7

Difference b/w bylaws and articles of incorporation

Answer 7

articles of incorporation = state law and regulations, bylaws= how things are done in corporation involving BOD and officers

Question 8

Change management

Answer 8

evaluates the design and implementation of changes and establishes new baseline.

Question 9

Who will be entitle w/ reward for whistle blowing? BOD, external auditor, internal auditor or customer?

Answer 9

customer’s that discovers violation will be given a reward

Question 10

risk appetite, residual risk and risk tolerance

Answer 10

maximum willing to accept, after response, acceptable variation

Question 11

probabilistic analysis

Answer 11

part of risk assessment not event identification

Question 12

Characteristics of efficient mkts hypothesis

Answer 12

investors are knowledgeable, capital mkt price reflects underlying value, acct change doesn’t influence stk price.

Question 13

In regression analysis, coefficient measures

Answer 13

goodness of fit

Question 14

ethics program consider what type of objective?

Answer 14

compliance objective

Question 15

unit elastic demand change in price

Answer 15

no effect on total revenues

Question 16

Code of ethics framework includes

Answer 16

4 rules of conduct: integrity, objective, confidentiality and competence for internal services by individuals and entities

Question 17

Is decreasing the cash conversion time good news for organizations?

Answer 17

yes, increases profit and less need for financing

Question 18

Difference b/w EVA and accounting profit

Answer 18

EVA= residual income after all cost of capital been deducted. accounting profit= income w/o deducting cost of capital

Question 19

Calculation of reorder point (EOQ) includes

Answer 19

daily use, delivery time and stk out cost

Question 20

Examples of carrying cost

Answer 20

cost incurred to cargar w/ asset. storage, insurance for loss, obsolescence, shrinkage

Question 21

Examples of unsecured obligations

Answer 21

revolving credit, bank acceptance, lines of credit and commercial paper. credit lien, chattering mortgage and factoring are consider secured.

Question 22

Fair value is best presented as

Answer 22

principal mkt, if none, then most advantageous

Question 23

Payback period can also be use for

Answer 23

internal rate of return if cash flow is stable

Question 24

use of a cost (asset-based) approach is appropriate when

Answer 24

• the company is in liquidation.
• the company’s value related to the assets held.
• the company has no income in recent years.
• future benefit cannot be predicted

Question 25

Theory of constraints measurements

Answer 25

throughput, investment and operating cost in order to focus on quicker manufacturing process

Question 26

Business process supported by

Answer 26

approaches, techniques and measures

Question 27

strategic planning vs operating planning

Answer 27

strategic is high level focused on long goals vs operating in budget data

Question 28

steering committee

Answer 28

establishes policy and direction for an organization's information system. not involved in the actual design, development, and direction of projects

Question 29

Methods of allocating joint costs

Answer 29

sales value at split off, physical measures and NRV. unlike flexible budget not used to allocate joint cost

Question 30

using a flexible budget, if production level changes,

Answer 30

FC per unit decreases and VC remain the same

Question 31

Commercial paper

Answer 31

generally doesn't have 2ndary mkt

Question 32

required rate of return includes what risks?

Answer 32

default risk, maturity risk, purchase power risk. does not use credit risk

Question 33

How are exchange rates are determined?

Answer 33

based on demand and supply just like prices are determined

Question 34

risk margin

Answer 34

extra cushion for unexpected risks

Question 35

NPV assumes cash flow reinvested @ what rate?

Answer 35

discount rate not risk free

Question 36

top-down risk assessment focus on

Answer 36

material accounts, higher levels first

Question 37

IT steering committee should consist of

Answer 37

mgmt. controller and other personnel

Question 38

sensitivity analysis

Answer 38

analysis to use alternatives w/ expected inputs and changes options b4 making decision. calculates change in the result due to a potential change in a project

Question 39

collusive pricing and predatory pricing

Answer 39

collusive, to increase price to externals/ predatory, to lower price so others go out of business

Question 40

electronic vaulting

Answer 40

electronically storing backups at a remote data facility

Question 41

rule of thumb

Answer 41

formula that cannot be use as method of valuation but use to compare w/ other method for support of results

Question 42

using a company-wide cost of capital will

Answer 42

over invest in high risk divisions and under invest in low risk divisions

Question 43

taxes on NPV calculations effect

Answer 43

decreases both benefits and costs

Question 44

measures of ROEquity and profit margin

Answer 44

on equity measures effectiveness and profit measures operating efficiency

Question 45

byproduct is

Answer 45

output of a joint production process, no profit is recognized

Question 46

Treynor index

Answer 46

two components of risk: 1. Risk produced by fluctuations in the market 2. Risk produced by fluctuations of the individual stock

Question 47

Personal income

Answer 47

all income received by individuals whether earned or unearned before any personal income taxes

Question 48

real options approach

Answer 48

deals with uncertainty

Question 49

inflation affects which type of rate

Answer 49

historical rate are not influenced by the change in current price

Question 50

just in time inventory model makes EOQ

Answer 50

irrelevant since no inventory is needed. flexibility is not considered w/ EOQ.

Question 51

Multiple regression differs from simple regression in that

Answer 51

has more independent variables

Question 52

major concern with LANs

Answer 52

users responsible for capturing and processing data

Question 53

Magnetic ink character recognition

Answer 53

most often used by banks to read the magnetic ink on checks and deposit slips

Question 54

mutual interdependence

Answer 54

outcome of pricing decisions in an oligopoly is dependent upon the reactions of organization's rivals

Question 55

levels of interdependence in integrated planning

Answer 55

Three levels: Pooled/Sequential/Reciprocal

Question 56

Imputed costs are

Answer 56

implied costs; not known with certainty and must be estimated

Question 57

strategic information system

Answer 57

allows management to make decisions