CPA CPA Business Environment & Concepts 2

Question 1

Which IT general control is designed to ensure that only authorized personnel can access financial data systems?

Accepted Answer

Access controls

Answer

Access controls restrict system entry to authorized users through passwords, biometrics, and role-based permissions to protect data integrity.

Question 2

A company's current ratio is 2.5 and its quick ratio is 1.2. What does this comparison suggest?

Accepted Answer

The company holds significant inventory

Answer

A large gap between the current ratio and quick ratio indicates that a significant portion of current assets consists of inventory, which is excluded from the quick ratio.

Question 3

Which supply chain strategy minimizes inventory by receiving goods only as they are needed in production?

Accepted Answer

Just-in-time (JIT)

Answer

Just-in-time (JIT) inventory management reduces holding costs by synchronizing material deliveries with production schedules.

Question 4

The balanced scorecard framework evaluates organizational performance across four perspectives. Which is NOT one of them?

Accepted Answer

Employee satisfaction

Answer

The four perspectives in Kaplan and Norton's balanced scorecard are Financial, Customer, Internal Business Processes, and Learning & Growth — not Employee Satisfaction.

Question 5

In the context of corporate governance, the board's audit committee is primarily responsible for:

Accepted Answer

Overseeing financial reporting and external auditors

Answer

The audit committee oversees the integrity of financial statements, coordinates with external auditors, and monitors internal controls.

(CPA) Certified Practicing Accountant Practice Test

(CPA) Certified Practicing Accountant Practice Test

CPA CPA Business Environment & Concepts 2