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NEW QUESTION: 1
A staff auditor, nearly finished with an audit engagement, discovers that the director of marketing has a gambling habit. The gambling issue is not directly related to the existing engagement and there is pressure to complete the current engagement. The auditor notes the problem and forwards the information to the chief audit executive but performs no further follow-up. The auditor's actions would:
I. Be in violation of the IIA Code of Ethics for withholding meaningful information.
II. Be in violation of the Standards because the auditor did not properly follow up on a red flag that might indicate the existence of fraud.
III. Not be in violation of either the IIA Code of Ethics or Standards.
A. II only
B. I and II only
C. I only
D. III only
Answer: D

NEW QUESTION: 2
Which of the following statement about the matrix is incorrect?
A. The transpose of the orthogonal matrix A is equal to the inverse of A .
B. The transpose of the symmetric matrix A 1s also A itself.
C. There is no inverse matrix for the diagonal matrix.
D. The arbitrary matrix is multiplied by the unit matrix and will not change.
Answer: C

NEW QUESTION: 3
Which of the following introduces model error when basing VaR on a normal distribution with a static mean and standard deviation?
A. Autocorrelation of squared returns
B. All of the above
C. Volatility clustering
D. Heavy tails
Answer: B
Explanation:
Explanation
When VaR is based on an assumption of normality with a static mean and volatility, it means anything that violates these assumptions will introduce model error. Volatility clustering implies a non-static volatility.
Heavy tails imply non-normality of the shape of the distribution. Autocorrelation of squared returns implies that returns are not independent and identically distributed. Therefore all of these introduce model error.
Choice 'd' is therefore the correct answer.