CIA PART 2 - PRACTICE OF INTERNAL AUDITING.FINAL TEST 2026\2027.
Accounts payable turnover ratio
A financial ratio that includes all outstanding obligations a company owes its creditors.
Benchmarking
The comparison of an organization or project to similar internal or external organizations or
projects for purposes of determining areas for potential improvement and to identify best
practices.
Compliance
The conformity and adherence to policies, plans, procedures, laws, regulations, contracts, or
other requirements.
Control
Any action taken by management, the board, and other parties to manage risk and increase
the likelihood that established objectives and goals will be achieved.
Control self-assessment
A variety of assessment techniques, including facilitated workshops and surveys, in which
the assessment is performed by people involved in the area or process being assessed
rather than by an independent party.
Cost reimbursement contract
A type of contract that allows for payment of all incurred costs within a predetermined
ceiling that can be allocated to the contract, are allowable within cost standards, and are
reasonable.
Current ratio
A measure of an organization's potential for paying down current liabilities; a larger number
indicates more assets in relation to debt and therefore greater ability to pay holders of
short-term debt.
Debt ratio
The ratio of all an organization's debts to all of its assets; provides a general measure of
ability to repay creditors.
, CIA PART 2 - PRACTICE OF INTERNAL AUDITING.FINAL TEST 2026\2027.
Debt to equity ratio
A ratio that measures an organization's ability to cover long-term liabilities from owners'
equity.
Due care
The level of caution that an individual exercises when performing a due diligence audit and
reporting the results.
Due diligence
The process of investigating a person, business, or financial transaction.
Earnings per share
The ratio of total earnings to number of shares outstanding; a commonly used measure of a
company's value to investors.
External business relationships (EBR)
Refers to outside contractual partnerships that an organization conducts business with;
examples include joint venture partners, out-sourced service providers, agents, contract
workers, vendors, and franchisees.
Fixed asset turnover ratio
A measure of how efficiently a company uses its fixed assets to generate sales; the higher
the ratio, the better.
Fixed price contract
A type of contract that requires a contractor to successfully perform the contract and
deliver supplies or services for a price agreed to up front.
Gross profit margin
The ratio of gross profit to net sales.
Impact
The result, effect, or consequences of an event.
Inventory turnover
A measure of the number of times during the year that inventory is replaced; a higher
number indicates greater efficiency.
Joint ventures
Agreements between two separate organizations to accomplish a single project together.
Likelihood
Accounts payable turnover ratio
A financial ratio that includes all outstanding obligations a company owes its creditors.
Benchmarking
The comparison of an organization or project to similar internal or external organizations or
projects for purposes of determining areas for potential improvement and to identify best
practices.
Compliance
The conformity and adherence to policies, plans, procedures, laws, regulations, contracts, or
other requirements.
Control
Any action taken by management, the board, and other parties to manage risk and increase
the likelihood that established objectives and goals will be achieved.
Control self-assessment
A variety of assessment techniques, including facilitated workshops and surveys, in which
the assessment is performed by people involved in the area or process being assessed
rather than by an independent party.
Cost reimbursement contract
A type of contract that allows for payment of all incurred costs within a predetermined
ceiling that can be allocated to the contract, are allowable within cost standards, and are
reasonable.
Current ratio
A measure of an organization's potential for paying down current liabilities; a larger number
indicates more assets in relation to debt and therefore greater ability to pay holders of
short-term debt.
Debt ratio
The ratio of all an organization's debts to all of its assets; provides a general measure of
ability to repay creditors.
, CIA PART 2 - PRACTICE OF INTERNAL AUDITING.FINAL TEST 2026\2027.
Debt to equity ratio
A ratio that measures an organization's ability to cover long-term liabilities from owners'
equity.
Due care
The level of caution that an individual exercises when performing a due diligence audit and
reporting the results.
Due diligence
The process of investigating a person, business, or financial transaction.
Earnings per share
The ratio of total earnings to number of shares outstanding; a commonly used measure of a
company's value to investors.
External business relationships (EBR)
Refers to outside contractual partnerships that an organization conducts business with;
examples include joint venture partners, out-sourced service providers, agents, contract
workers, vendors, and franchisees.
Fixed asset turnover ratio
A measure of how efficiently a company uses its fixed assets to generate sales; the higher
the ratio, the better.
Fixed price contract
A type of contract that requires a contractor to successfully perform the contract and
deliver supplies or services for a price agreed to up front.
Gross profit margin
The ratio of gross profit to net sales.
Impact
The result, effect, or consequences of an event.
Inventory turnover
A measure of the number of times during the year that inventory is replaced; a higher
number indicates greater efficiency.
Joint ventures
Agreements between two separate organizations to accomplish a single project together.
Likelihood
