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.
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.
, CIA PART 2 - PRACTICE OF INTERNAL AUDITING.FINAL TEST
2026\2027.
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
The probability that a given event will occur.
Net profit margin
A measurement that determines the portion of sales remaining after covering net profits. A ratio of net
profit to net sales.
Net working capital ratio
Measures the relationship of short-term debt to short-term assets by subtracting liabilities from assets;
a larger number indicates a greater ability to pay current debts.
Operating profit margin
A measure of operational efficiency as well as effective pricing and cost controls.
Privacy
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.
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.
, CIA PART 2 - PRACTICE OF INTERNAL AUDITING.FINAL TEST
2026\2027.
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
The probability that a given event will occur.
Net profit margin
A measurement that determines the portion of sales remaining after covering net profits. A ratio of net
profit to net sales.
Net working capital ratio
Measures the relationship of short-term debt to short-term assets by subtracting liabilities from assets;
a larger number indicates a greater ability to pay current debts.
Operating profit margin
A measure of operational efficiency as well as effective pricing and cost controls.
Privacy
