QUESTION: 101

Which of the following statements concerning the role of the Audit Committee is correct?

The Audit Committee should provide arrangements for whistle blowing.
The Audit Committee should design the system of internal controls.
The Audit Committee should engage consultants to carry out business reviews.
The Audit Committee should review and monitor the effectiveness of the company's internal audit function.
The Audit Committee should decide annually whether it needs an internal audit function.
The Audit Committee should decide annually whether it needs an external audit function.

Answer(s): A,D,E

N, a large company in the food production industry, has grown over the years by the acquisition of several smaller rivals. The company has ten branches located in its home country and has just opened a foreign branch for the first time. It has recently made some changes to the structure and implementation of its control system.
Which TWO of these would be most likely to improve the overall control system?

Establishing an Internal Audit department.
Purchase invoices are now approved for payment at branches and a list of approved invoices are sent to head office for payment. The invoices, supporting documentation and suppliers' statements are retained at the branches.
Excess funds are now invested, by the Finance Director, in short-term securities. The Finance Director initiates buy and sell transactions and she also receives and retains all correspondence relating to the investments.
A policy has been initiated to complete a physical inventory of all non-current assets at least annually. This is then reconciled with the non-current asset register.
N has just opened a bank account in the currency in which the newly opened branch is now operating.

Answer(s): A,D

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QUESTION: 103

A Firewall is an element of a company's Information Technology infrastructure.
Which THREE of the following are characteristics of a Firewall?

A Firewall determines the boundary of the "Trusted" components of the company's Information Technology infrastructure.
A Firewall protects sensitive data against accidental or malicious damage.
A Firewall protects the computer suite against physical attack.
A Firewall protects against unauthorised network access.
A Firewall protects against viruses.
A Firewall can screen every message coming into or out of the company network looking for key words, or attachments.

Answer(s): A,D,F

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QUESTION: 104

When a new computer system is being implemented there are several possible methods for managing the changeover from the old system to the new system.
Which THREE of the following are true?

Phased changeover is the safest and slowest method of changeover.
Phased changeover moves individual portions of the business to the new system one at a time.
Pilot changeover moves the simplest part of the business to the new system first.
Parallel running involves keeping the old system running, normally until certain data retention criteria are met or confidence is gained, while the new system deals with the new workload. Data input is usually carried out on both systems.
Direct changeover, or Big Bang is only used when the systems are significantly different such that comparing the outputs of the two systems is largely irrelevant.
All methods of changeover carry high risk and it is the preparation, consideration of data compatibility and data cleansing before the changeover which has the biggest impact on the smoothness of the transition.

Answer(s): B,D,F

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QUESTION: 104