Question 1

The Sarbanes-Oxley Act (SOX)applies to

Accepted Answer

A) all companies with gross annual revenues exceeding $500 million. 
B) publicly traded companies with gross annual revenues exceeding $500 million. 
C) all private and public companies incorporated in the United States. 
D) all publicly traded companies. 
A) all companies with gross annual revenues exceeding $500 million. 
B) publicly traded companies with gross annual revenues exceeding $500 million. 
C) all private and public companies incorporated in the United States. 
D) all publicly traded companies.

Question 2

According to the ERM model,________ help the company address all applicable laws and regulations.

Accepted Answer

A) compliance objectives 
B) operations objectives 
C) reporting objectives 
D) strategic objectives 
A) compliance objectives 
B) operations objectives 
C) reporting objectives 
D) strategic objectives

Question 3

Applying the COBIT5 framework,monitoring is the responsibility of

Accepted Answer

A) the CEO. 
B) the CFO. 
C) the board of directors. 
D) all of the above 
A) the CEO. 
B) the CFO. 
C) the board of directors. 
D) all of the above

Question 4

The COSO ERM contains all five of the same COSO-Integrated Framework components.

Accepted Answer

A) True 
 B)False

Question 5

Internal controls are often segregated into

Accepted Answer

A) detective controls and preventive controls. 
B) general controls and application controls. 
C) process controls and general controls. 
D) system controls and application controls. 
A) detective controls and preventive controls. 
B) general controls and application controls. 
C) process controls and general controls. 
D) system controls and application controls.

Question 6

A store policy that allows retail clerks to process sales returns for $1,000 or less,with a receipt dated within the past 30 days,is an example of

Accepted Answer

A) general authorization. 
B) specific authorization. 
C) special authorization. 
D) generic authorization. 
A) general authorization. 
B) specific authorization. 
C) special authorization. 
D) generic authorization.

Question 7

An accounting policy that requires a purchasing manager to sign off on all purchases over $10,000 is an example of

Accepted Answer

A) general authorization. 
B) specific authorization. 
C) special authorization. 
D) generic authorization. 
A) general authorization. 
B) specific authorization. 
C) special authorization. 
D) generic authorization.

Question 8

Personnel policies such as background checks,mandatory vacations,and rotation of duties tend to deter

Accepted Answer

A) unintentional errors. 
B) employee fraud or embezzlement. 
C) fraud by outsiders. 
D) disgruntled employees. 
A) unintentional errors. 
B) employee fraud or embezzlement. 
C) fraud by outsiders. 
D) disgruntled employees.

Question 9

Congress passed this federal law for the purpose of preventing financial statement fraud,to make financial reports more transparent and to strengthen the internal control of public companies.

Accepted Answer

A) Foreign Corrupt Practices Act of 1977 
B) The Securities Exchange Act of 1934 
C) The Sarbanes-Oxley Act of 2002 
D) The Securities Exchange Act of 1933 
A) Foreign Corrupt Practices Act of 1977 
B) The Securities Exchange Act of 1934 
C) The Sarbanes-Oxley Act of 2002 
D) The Securities Exchange Act of 1933

Question 10

Duplicate checking of calculations and preparing bank reconciliations and monthly trial balances are examples of what type of control?

Accepted Answer

A) Preventive control 
B) Detective control 
C) Corrective control 
D) Authorization control 
A) Preventive control 
B) Detective control 
C) Corrective control 
D) Authorization control

Question 11

A control procedure designed so that the employee that records cash received from customers does not also have access to the cash itself is an example of a(n)

Accepted Answer

A) preventive control. 
B) detective control. 
C) corrective control. 
D) authorization control. 
A) preventive control. 
B) detective control. 
C) corrective control. 
D) authorization control.

Question 12

________ remains after management implements internal control(s).

Accepted Answer

A) Inherent risk 
B) Residual risk 
C) Risk appetite 
D) Risk assessment 
A) Inherent risk 
B) Residual risk 
C) Risk appetite 
D) Risk assessment

Question 13

How is expected loss calculated when performing risk assessment?

Accepted Answer

A) Impact times expected loss. 
B) Impact times likelihood. 
C) Inherent risk times likelihood. 
D) Residual risk times likelihood. 
A) Impact times expected loss. 
B) Impact times likelihood. 
C) Inherent risk times likelihood. 
D) Residual risk times likelihood.

Question 14

The amount of risk a company is willing to accept in order to achieve its goals and objectives is

Accepted Answer

A) inherent risk. 
B) residual risk. 
C) risk appetite. 
D) risk assessment. 
A) inherent risk. 
B) residual risk. 
C) risk appetite. 
D) risk assessment.

Question 15

Which of the following is not one of the five principles of COBIT5?

Accepted Answer

A) meeting stakeholder needs 
B) covering the enterprise end-to-end 
C) enabling a holistic approach 
D) improving organization efficiency 
A) meeting stakeholder needs 
B) covering the enterprise end-to-end 
C) enabling a holistic approach 
D) improving organization efficiency

Question 16

Which internal control framework is widely accepted as the authority on internal controls?

Accepted Answer

A) COBIT. 
B) ISACA framework. 
C) COSO Integrated Control. 
D) Sarbanes-Oxley control framework. 
A) COBIT. 
B) ISACA framework. 
C) COSO Integrated Control. 
D) Sarbanes-Oxley control framework.

Question 17

Of the following examples of fraud,which will be the most difficult to prevent and detect? Assume the company enforces adequate segregation of duties.

Accepted Answer

A) A mail room employee steals a check received from a customer and destroys the documentation. 
B) The accounts receivable clerk does not record sales invoices for friends or family,so they can receive free goods. 
C) An employee puts inventory behind the dumpster while unloading a vendor's delivery truck,then picks up the inventory later in the day and puts it in her car. 
D) A credit manager issues credit cards to himself and a staff accountant in the accounting office,and when the credit card balances are just under $1,000,the staff accountant writes off the accounts as bad debt.The credit manager then issues new cards. 
A) A mail room employee steals a check received from a customer and destroys the documentation. 
B) The accounts receivable clerk does not record sales invoices for friends or family,so they can receive free goods. 
C) An employee puts inventory behind the dumpster while unloading a vendor's delivery truck,then picks up the inventory later in the day and puts it in her car. 
D) A credit manager issues credit cards to himself and a staff accountant in the accounting office,and when the credit card balances are just under $1,000,the staff accountant writes off the accounts as bad debt.The credit manager then issues new cards.

Question 18

Identify the statement below which is true.

Accepted Answer

A) Requiring two signatures on checks over $20,000 is an example of segregation of duties. 
B) Although forensic specialists utilize computers,only people can accurately identify fraud. 
C) Internal auditors,rather than external auditors,can conduct evaluations of effectiveness of Enterprise Risk Management processes. 
D) Re-adding the total of a batch of invoices and comparing the total with the first total you calculated is an example of an independent check. 
A) Requiring two signatures on checks over $20,000 is an example of segregation of duties. 
B) Although forensic specialists utilize computers,only people can accurately identify fraud. 
C) Internal auditors,rather than external auditors,can conduct evaluations of effectiveness of Enterprise Risk Management processes. 
D) Re-adding the total of a batch of invoices and comparing the total with the first total you calculated is an example of an independent check.

Question 19

Reducing management layers,creating self-directed work teams,and emphasizing continuous improvement are all related to which aspect of internal environment?

Accepted Answer

A) Organizational structure. 
B) Methods of assigning authority and responsibility. 
C) Management philosophy and operating style. 
D) Commitment to competence. 
A) Organizational structure. 
B) Methods of assigning authority and responsibility. 
C) Management philosophy and operating style. 
D) Commitment to competence.

Question 20

As a result of an internal risk assessment,Berryhill Insurance decided it was no longer profitable to provide flood insurance in the southern states without a general rate increase.Berryhill apparently chose to ________ the risk of paying flood claims in the southern states by raising its insurance rate.

Accepted Answer

A) reduce 
B) share 
C) avoid 
D) accept 
A) reduce 
B) share 
C) avoid 
D) accept

Exam 7: Control and Accounting Information Systems

The Sarbanes-Oxley Act (SOX)applies to

According to the ERM model,________ help the company address all applicable laws and regulations.

Applying the COBIT5 framework,monitoring is the responsibility of

The COSO ERM contains all five of the same COSO-Integrated Framework components.

Internal controls are often segregated into

A store policy that allows retail clerks to process sales returns for $1,000 or less,with a receipt dated within the past 30 days,is an example of

An accounting policy that requires a purchasing manager to sign off on all purchases over $10,000 is an example of

Personnel policies such as background checks,mandatory vacations,and rotation of duties tend to deter

Congress passed this federal law for the purpose of preventing financial statement fraud,to make financial reports more transparent and to strengthen the internal control of public companies.

Duplicate checking of calculations and preparing bank reconciliations and monthly trial balances are examples of what type of control?

A control procedure designed so that the employee that records cash received from customers does not also have access to the cash itself is an example of a(n)

________ remains after management implements internal control(s).

How is expected loss calculated when performing risk assessment?

The amount of risk a company is willing to accept in order to achieve its goals and objectives is

Which of the following is not one of the five principles of COBIT5?

Which internal control framework is widely accepted as the authority on internal controls?

Of the following examples of fraud,which will be the most difficult to prevent and detect? Assume the company enforces adequate segregation of duties.

Identify the statement below which is true.

Reducing management layers,creating self-directed work teams,and emphasizing continuous improvement are all related to which aspect of internal environment?

Conceptual Foundations of Accounting Information Systems

Overview of Transaction Processing and Enterprise Resource Planning Systems

Systems Documentation Techniques

Relational Databases

Computer Fraud

Computer Fraud and Abuse Techniques

Controls for Information Security

Confidentiality and Privacy Controls

Processing Integrity and Availability Controls

Auditing Computer-Based Information Systems

The Revenue Cycle: Sales to Cash Collections

The Expenditure Cycle: Purchasing to Cash Disbursements

The Production Cycle

The Human Resources Management and Payroll Cycle

General Ledger and Reporting System

Database Design Using the Rea Data Model

Implementing an Rea Model in a Relational Database

Special Topics in Rea Modeling

Introduction to Systems Development and Systems Analysis

Ais Development Strategies

Systems Design, implementation, and Operation

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