ACC 576 Final Exam
Question 1 (IFTC-0112)
Controls in the information technology area are classified into the preventive, detective, and corrective categories. Which of the following is a preventive control?
Question 2 (IFTC-0082)
An organization relied heavily on e-commerce for its transactions. Evidence of the organization’s security awareness manual would be an example of which of the following types of controls?
Question 3 (IFTC-0067)
Which of the following types of control plans is particular to a specific process or subsystem, rather than related to the timing of its occurrence?
Question 4 (CGIC-0032)
Which of the following is true about the Sarbanes-Oxley requirements regarding the audit committee financial expert?
Question 5 (CGIC-0026)
Which of the following is not a component of COSO’s enterprise risk management framework?
Question 6 (CGIC-0010)
Which of the following is not required by the Sarbanes-Oxley Act of 2002?
Question 7 (CGIC-0025)
Which of the following is not an advantage of the employment of an enterprise risk management (ERM) system?
Question 8 (CGIC-0008)
A financial statement audit performed under the requirements of the Sarbanes-Oxley Act of 2002 must include an examination and report upon
Question 9 (CGIC-0024)
An important benefit of an enterprise risk management system is
Question 10 (CGIC-0023)
Which of the following bodies has developed a framework for enterprise risk management?
Question 11 (CGIC-0005)
Which of the following executives of an issuer corporation must certify to the accuracy and truthfulness of financial reports filed with the SEC?
Question 12 (CGIC-0004)
Which of the following is not a responsibility that should be assigned to the audit committee of the board of directors?
Question 13 (CGIC-0018)
Which of the following components of internal control are characterized by ongoing activities and separate evaluations?
Question 14 (CGIC-0003)
Which of the following can be the most effective monitoring device for effective corporate governance?
Question 15 (CGIC-0002)
From a corporate governance standpoint which of the following best describes the main goal of a form of executive compensation?
Question 16 (CGIC-0019)
Which of the following components of internal control encompass policies and procedures that ensure that management’s directives are carried out?
Question 17 (CGIC-0001)
Which of the following forms of compensation is more likely to result in shirking by management?
Question 18 (CGIC-0036)
In the COSO framework, individuals within the company that monitor internal controls are referred to as
Question 19 (CGIC-0016)
The COSO definition of internal control considers control activities a(n):
Question 20 (CGIC-0021)
If internal control is properly designed, the same employee should not be permitted to
Question 1 (ECON-0036)
If a government were to use only fiscal policy to stimulate the economy from a recession, it would
Question 2 (ECON-0056)
Disposable income is calculated as
Question 3 (ECON-0003)
Which of the following changes would create pressure for the Japanese yen to appreciate relative to the U.S. dollar?
Question 4 (ECON-0021)
If a group of consumers decide to boycott a particular product, the expected result would be
Question 5 (ECON-0020)
The movement along the demand curve from one price-quantity combination to another is called a(n)
Question 6 (ECON-0030)
In the long run, a firm may experience increasing returns due to
Question 7 (ECON-0017)
Which of the following is not accurate about product differentiation?
Question 8 (ECON-0063)
Which of the following segments of the economy will be least affected by the business cycle?
Question 9 (ECON-0069)
What is the effect when a foreign competitor’s currency becomes weaker compared to the U.S. dollar?
Question 10 (ECON-0046)
Some economic indicators lead the economy into a recovery or recession, and some lag it. An example of a lag variable would be
Question 11 (ECON-0002)
If the U.S. dollar declines in value relative to the currencies of many of its trading partners, the likely result is that
Question 12 (ECON-0055)
The rate of unemployment caused by changes in the composition of employment opportunities over time is referred to as the
Question 13 (ECON-0060)
To address the problem of a recession, the Federal Reserve Bank most likely would take which of the following actions?
Question 14 (ECON-0040)
Which of the following is a direct effect of imposing a protective tariff on an imported product?
Question 15 (ECON-0077)
What does the consumer price index measure?
Question 16 (ECON-0037)
The discount rate of the Federal Reserve System is
Question 17 (ECON-0073)
Which of the following individuals would be most hurt by an unanticipated increase in inflation?
Question 1 (FINM-0082)
Which of the following statements is correct regarding the weighted-average cost of capital (WACC)?
Question 2 (FINM-0066)
The benefits of debt financing over equity financing are likely to be highest in which of the following situations?
Question 3 (RMCB-0027)
Which of the following describes an option?
Question 4 (FINM-0034)
A company has $1,500,000 of outstanding debt and $1,000,000 of outstanding common equity. Management plans to maintain the same proportions of financing from each source if additional projects are undertaken. If the company expects to have $60,000 of retained earnings available for reinvestment in new projects in the coming year, what dollar amount of new investments can be undertaken without issuing new equity?
Value of equity
Value of debt + Value of equity
Since the question states that the firm will maintain the same weight of each financing source, each dollar invested is composed of 40 cents of equity and 60 cents of debt. The first $60,000 of equity used in financing new projects is sourced from retained earnings. This source of equity is exhausted when the firm reaches an investment level of
$60,000 / .4 = $150,000.When the level of investment exceeds this amount, equity financing must be raised externally.
Question 5 (FINM-0024)
DQZ Telecom is considering a project for the coming year that will cost $50,000,000. DQZ plans to use the following combination of debt and equity to finance the investment:
Question 6 (RMCB-0026)
Which of the following describes a normal yield curve?
Question 7 (FINM-0073)
Which of the following types of bonds is most likely to maintain a constant market value?
Question 8 (RMCB-0058)
Which of the following is an advantage of net present value modeling?
Question 9 (RMCB-0057)
The calculation of depreciation is used in the determination of the net present value of an investment for which of the following reasons?
Question 10 (RMCB-0051)
Net present value as used in investment decision-making is stated in terms of which of the following options?
Question 11 (RMCB-0020)
Essex Corporation is evaluating a lease that takes effect on March 1, 2012. The company must make eight equal payments, with the first payment due on March 1, 2012. The concept most relevant to the evaluation of the lease is
Question 12 (RMCB-0043)
On January 1, 2012, Colt Company issued 10-year bonds with a face amount of $1,000,000 and a stated interest rate of 8% payable annually on January 1. The bonds were priced to yield 10%. Present value factors are as follows:
Present value of 1 for 10 periods
Present value of an ordinary annuity of 1 for 10 periods
The total issue price (rounded) of the bonds was
Question 13 (FINM-0001)
Net working capital is the difference between
Question 14 (RMCB-0041)
Assume that management of Trayco has generated the following data about an investment project that has a five-year life:
Additional investment in working capital
Cash flows before income taxes for years 1 through 5
Yearly depreciation for tax purposes
Terminal value of machine
Cost of capital
Present value of $1 received after 5 years discounted at 8%
Present value of an ordinary annuity of $1 for 5 years at 8%
Assume that Trayco's marginal tax rate is 30% and all cash flows come at the end of the year. Calculate the net present value of the investment of the project.
Question 15 (FINM-0014)
Which one of the following statements correctly compares bond financing alternatives?
Question 16 (RMCB-0056)
A client wants to know how many years it will take before the accumulated cash flows from an investment exceed the initial investment, without taking the time value of money into account. Which of the following financial models should be used?
Question 17 (RMCB-0049)
Harvey Co. is evaluating a capital investment proposal for a new machine. The investment proposal shows the following information:
Annual net cash inflows
If acquired, the machine will be depreciated using the straight-line method. The payback period for this investment is
Question 18 (RMCB-0054)
Which of the following statements is correct regarding financial decision making?
Question 19 (RMCB-0052)
Which of the following formulas should be used to calculate the economic rate of return on common stock?
Question 20 (FINM-0054)
All of the following are features of just-in-time (JIT) systems except
Question 1 (IFTC-0054)
Because log-on procedures may be cumbersome and tedious, users often store log-on sequences in their personal computers and invoke them when they want to use mainframe facilities. A risk of this practice is that
Question 2 (IFTC-0035)
Employee numbers have all numeric characters. To prevent the input of alphabetic characters, what technique should be used?
Question 3 (IFTC-0051)
An organization's computer help desk function is usually a responsibility of the
Question 4 (IFTC-0022)
First Federal S&L has an online real-time system, with terminals installed in all of its branches. This system will not accept a customer's cash withdrawal instructions in excess of $1,000 without the use of a "terminal audit key." After the transaction is authorized by a supervisor, the bank teller then processes the transaction with the audit key. This control can be strengthened by
Question 5 (IFTC-0043)
A brokerage firm has changed a program so as to permit higher transaction volumes. After proper testing of the change, the revised programs were authorized and copied to the production library. This practice is an example of
Question 6 (IFTC-0023)
In a daily computer run to update checking account balances and print out basic details on any customer's account that was overdrawn, the overdrawn account of the computer programmer was never printed. Which of the following control procedures would have been most effective in detecting this fraud?
Question 7 (IFTC-0088)
In which of the following locations should a copy of the accounting system data backup of year-end information be stored?
Question 8 (IFTC-0018)
A computer input control is designed to ensure that
Question 9 (IFTC-0002)
Which of the following would lessen internal control in a computer processing system?
Question 10 (IFTC-0103)
A value-added network (VAN) is a privately owned network that performs which of the following functions?
Question 11 (IFTC-0102)
Which of the following is usually a benefit of using electronic funds transfer for international cash transactions?
Question 12 (IFTC-0030)
The machine language for a specific computer
Question 13 (IFTC-0049)
Securing client/server systems is a complex task because of all of the following factors except:
Question 14 (IFTC-0028)
A data warehouse in an example of
Question 15 (IFTC-0078)
Compared to batch processing, real-time processing has which of the following advantages?
Question 16 (IFTC-0032)
Which of the following is not a characteristic of a batch processed computer system?
Question 17 (IFTC-0072)
Which of the following is an advantage of a computer-based system for transaction processing over a manual system? A computer-based system
Question 18 (IFTC-0131)
When a client's accounts payable computer system was relocated, the administrator provided support through a dial-up connection to a server. Subsequently, the administrator left the company. No changes were made to the accounts payable system at that time. Which of the following situations represents the greatest security risk?
Question 19 (IFTC-0114)
In a large multinational organization, which of the following job responsibilities should be assigned to the network administrator?
Question 20 (IFTC-0055)
Today organizations are using microcomputers for data presentation because microcomputer use, compared to mainframe use, is more
Question 1 (COST-0056)
The following is selected information from the records of Ray, Inc.:
Purchases of raw materials
Raw materials, beginning
Raw materials, ending
Cost of goods sold
Finished goods, beginning
Finished goods, ending
What is the total amount of conversion costs?
Question 2 (PLAN-0049)
A defense contractor for a government space project has incurred $2,500,000 in actual design costs to date for a guidance system whose total budgeted design cost is $3,000,000. If the design phase of the project is 60% complete, what is the amount of the contractor's current overrun/savings on this design work?
Question 3 (COST-0044)
A company with three products classifies its costs as belonging to five functions: design, production, marketing, distribution, and customer services. For pricing purposes, all company costs are assigned to the three products. The direct costs of each of the five functions are traced directly to the three products. The indirect costs of each of the five business functions are collected into five separate cost pools and then assigned to the three products using appropriate allocation bases. The allocation base that would most likely be the best for allocating the indirect costs of the distribution function is
Question 4 (COST-0051)
Which of the following is assigned to goods that were either purchased or manufactured for resale?
Question 5 (PLAN-0045)
A company manufactures a product that has the direct material standard cost presented below. Budgeted and actual information for the current month for the manufacture of the finished product and the purchase and use of the direct material are also presented.Standard cost for direct material1.60 lb. @ $2.50 per lb. = $4.00
Finished goods (in units)
Direct material usage (in pounds)
Direct material purchases (in pounds)
Total cost of direct material purchases
The direct material price variance for the current month is
Question 6 (PLAN-0041)
A favorable material price variance coupled with an unfavorable material usage variance would most likely result from
Question 7 (PERM-0001)
A strategy map in the balanced scorecard framework is
Question 8 (PLAN-0035)
Comparing actual results with a budget based on achieved volume is possible with the use of a
Question 9 (PLAN-0032)
The cash receipts budget includes
Question 10 (COST-0043)
A company is attempting to determine if there is a cause and effect relationship between scrap value and output produced. The following exhibit presents the company's scrap data for the last fiscal year:
Scrap Value as a Percent of Standard Dollar Value of Output Produced
Based on the above data, the company's scrap value in relation to the standard dollar value of output produced appears to be
Question 11 (PLAN-0013)
In preparing its cash budget for July 2012, Reed Company made the following projections:
Gross profit (based on sales)
Decrease in inventories
Decrease in accounts payable for inventories
For July 2012 what were the estimated cash disbursements for inventories?
Question 12 (PERM-0022)
The following selected data is for the Consumer Products Division of Gerriod Corp.
Average invested capital (total assets)
Net operating profit
Cost of capital
Calculate the spread between the return on investment and the required rate of return for the Consumer Products Division.
Question 13 (RMCB-0001)
A company is considering exchanging an old asset for a new asset. Ignoring income tax considerations, which of the following is economically relevant to the decision?
Question 14 (PLAN-0105)
Carter Co. paid $1,000,000 for land three years ago. Carter estimates it can sell the land for $1,200,000, net of selling costs. If the land is not sold, Carter plans to develop the land at a cost of $1,500,000. Carter estimates net cash flow from the development in the first year of operations would be $500,000. What is Carter's opportunity cost of the development?
Question 15 (PERM-0012)
In the cost of quality, liability claims are examples of
Question 16 (PERM-0019)
The following selected data is for the Consumer Products Division of Gerriod Corp.
Average invested capital (total assets)
Net operating profit
Cost of capital
Calculate the asset turnover ratio for the Consumer Products Division.
Question 17 (PLAN-0106)
A company that produces 10,000 units has fixed costs of $300,000, variable costs of $50 per unit, and a sales price of $85 per unit. After learning that its variable costs will increase by 20%, the company is considering an increase in production to 12,000 units. Which of the following statements is correct regarding the company's next steps?
Question 18 (PLAN-0087)
Which of the following listings correctly describes the order in which the four types of budgets must be prepared?
Question 19 (PLAN-0048)
All else being equal, the breakeven point in units will be higher if
Question 20 (PLAN-0091)
Relevant information for material A follows:
Standard quantity allowed
What was the direct material price variance for material A?
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