Question 1

Which of the following are not controls that can be instituted to prevent financial fraud?

Accepted Answer

A) Separate duties where a single person carrying out a series of tasks could not commit fraud and hide it. 
B) Hire internal auditors. 
C) Have independent auditors review a company's internal controls. 
D) Have the bank independently reconcile cash balances with company records. 
A) Separate duties where a single person carrying out a series of tasks could not commit fraud and hide it. 
B) Hire internal auditors. 
C) Have independent auditors review a company's internal controls. 
D) Have the bank independently reconcile cash balances with company records.

Question 2

Which of the following is considered to be fraudulent financial reporting?

Accepted Answer

A) intentional conduct resulting in materially misleading financial statements. 
B) embezzlement or theft of assets. 
C) unintentional errors in preparing financial statements. 
D) None of the answers is correct. 
A) intentional conduct resulting in materially misleading financial statements. 
B) embezzlement or theft of assets. 
C) unintentional errors in preparing financial statements. 
D) None of the answers is correct.

Question 3

How does overstated ending inventory leads to overstated earnings?

Accepted Answer

A) By understating cost of good sold. 
B) By overstating cost of good sold. 
C) By understating contribution margin. 
D) By understating gross margin. 
A) By understating cost of good sold. 
B) By overstating cost of good sold. 
C) By understating contribution margin. 
D) By understating gross margin.

Question 4

In 1977,Congress addressed foreign bribes paid by U.S.Companies by passing which of the following acts?

Accepted Answer

A) Foreign Anti-bribery Practices Act. 
B) Foreign Corruption Act. 
C) Foreign Corrupt Practices Act. 
D) Foreign Bribery and Corruption Act. 
A) Foreign Anti-bribery Practices Act. 
B) Foreign Corruption Act. 
C) Foreign Corrupt Practices Act. 
D) Foreign Bribery and Corruption Act.

Question 5

Which of these is a common type of fraud on financial statements?

Accepted Answer

A) overstating inventory. 
B) overstating cash. 
C) understating inventory. 
D) overstating cost of goods sold. 
A) overstating inventory. 
B) overstating cash. 
C) understating inventory. 
D) overstating cost of goods sold.

Question 6

Which statement best describes the balanced scorecard?

Accepted Answer

A) A causal model for lead and lag indicators of performance. 
B) A replacement for zero-based budgeting. 
C) A product of zero-sum game theory. 
D) A tool to evaluate customer profitability. 
A) A causal model for lead and lag indicators of performance. 
B) A replacement for zero-based budgeting. 
C) A product of zero-sum game theory. 
D) A tool to evaluate customer profitability.

Question 7

A causal model of lead and lag indicators of performance based on financial and non-financial perspectives is known as which of the following?

Accepted Answer

A) balanced scorecard. 
B) managerial report card. 
C) hierarchical scorecard. 
D) management by objectives. 
A) balanced scorecard. 
B) managerial report card. 
C) hierarchical scorecard. 
D) management by objectives.

Question 8

Rewards that come from outside the individual,such as rewards from a teacher,a parent,an organization,or a spouse that include grades,money,praise,and prizes are called

Accepted Answer

A) traditional rewards. 
B) intrinsic rewards. 
C) extrinsic rewards. 
D) outside rewards. 
A) traditional rewards. 
B) intrinsic rewards. 
C) extrinsic rewards. 
D) outside rewards.

Question 9

Which of the following are components of deferred compensation?

Accepted Answer

A) cash bonuses. 
B) profit sharing plans. 
C) special awards. 
D) stock options. 
A) cash bonuses. 
B) profit sharing plans. 
C) special awards. 
D) stock options.

Question 10

Controls that can be instituted to prevent financial fraud includes

Accepted Answer

A) separation of duties where a single person carrying out a series of tasks could commit fraud and take steps to hide it. 
B) the presence of the independent auditors and their review of a company's internal controls. 
C) the presence of the internal auditors and their review of a company's internal controls. 
D) All of the answers are correct. 
A) separation of duties where a single person carrying out a series of tasks could commit fraud and take steps to hide it. 
B) the presence of the independent auditors and their review of a company's internal controls. 
C) the presence of the internal auditors and their review of a company's internal controls. 
D) All of the answers are correct.

Question 11

Explain management's role in assuring the integrity of financial information.

Accepted Answer

Management reports should ackn

Question 12

Effective divisional incentive compensation plans must induce individual behavior compatible with increasing which of the following?

Accepted Answer

A) firm's wealth. 
B) suppliers' wealth. 
C) customers' wealth. 
D) employees' agency wealth. 
A) firm's wealth. 
B) suppliers' wealth. 
C) customers' wealth. 
D) employees' agency wealth.

Question 13

Rewards that include grades,money,praise,and prizes are called

Accepted Answer

A) traditional rewards. 
B) intrinsic rewards. 
C) extrinsic rewards. 
D) outside rewards. 
A) traditional rewards. 
B) intrinsic rewards. 
C) extrinsic rewards. 
D) outside rewards.

Question 14

Treadway Commission
The 1987 recommendations of the Treadway Commission focused on publicly held companies.For each area listed below,explain how a company can improve its overall financial reporting process,increase the likelihood of preventing fraudulent financial reporting,and detect it earlier when it occurs.
Refer to the Treadway Commission.Explain why the Treadway Commission believes the internal audit function plays an important role in deterring financial fraud.

Accepted Answer

The internal audit function must be desi

Question 15

Which of these falls under the responsibility of top management?

Accepted Answer

A) assuring the integrity of financial information presented to outsiders. 
B) maintaining adequate internal control. 
C) unintentional errors in preparing financial statements. 
D) assuring the integrity of financial information presented to outsiders and maintaining adequate internal control. 
A) assuring the integrity of financial information presented to outsiders. 
B) maintaining adequate internal control. 
C) unintentional errors in preparing financial statements. 
D) assuring the integrity of financial information presented to outsiders and maintaining adequate internal control.

Question 16

Which of these is the perspective of the balanced scorecard that is measured by employee satisfaction,employee retention,and employee productivity?

Accepted Answer

A) financial perspective. 
B) internal business and production process perspective. 
C) learning and growth perspective. 
D) customer perspective. 
A) financial perspective. 
B) internal business and production process perspective. 
C) learning and growth perspective. 
D) customer perspective.

Question 17

Which of the management methods developed in the private sector are being used by nonprofit organizations?

Accepted Answer

A) Balanced scorecard. 
B) Deferred stock options. 
C) Bonuses based on achieving profit targets. 
D) Extended vacation time. 
A) Balanced scorecard. 
B) Deferred stock options. 
C) Bonuses based on achieving profit targets. 
D) Extended vacation time.

Question 18

Effective incentive compensation plans must induce individual behavior compatible with increasing the firm's wealth.Deferred compensation is given for

Accepted Answer

A) short-term performance. 
B) long-term incentive. 
C) particular actions or extraordinary performance. 
D) None of the answers is correct. 
A) short-term performance. 
B) long-term incentive. 
C) particular actions or extraordinary performance. 
D) None of the answers is correct.

Question 19

In 1977,the United States Government passed the Foreign Corrupt Practices Act which

Accepted Answer

A) requires all companies registered with the SEC to make and keep accurate books and records. 
B) requires all companies registered with the SEC to devise and maintain a system of internal accounting controls sufficiently adequate that managers of a company will know if a bribe is paid. 
C) allows for "grease payments" paid to low-level foreign government employees to expedite routine matters. 
D) All of the answers are correct. 
A) requires all companies registered with the SEC to make and keep accurate books and records. 
B) requires all companies registered with the SEC to devise and maintain a system of internal accounting controls sufficiently adequate that managers of a company will know if a bribe is paid. 
C) allows for "grease payments" paid to low-level foreign government employees to expedite routine matters. 
D) All of the answers are correct.

Question 20

Which of the following would be considered an intrinsic reward?

Accepted Answer

A) the satisfaction from studying hard. 
B) providing help to someone in need. 
C) doing a good job. 
D) All of the answers are correct. 
A) the satisfaction from studying hard. 
B) providing help to someone in need. 
C) doing a good job. 
D) All of the answers are correct.

Which of the following are not controls that can be instituted to prevent financial fraud?

Which of the following is considered to be fraudulent financial reporting?

How does overstated ending inventory leads to overstated earnings?

In 1977,Congress addressed foreign bribes paid by U.S.Companies by passing which of the following acts?

Which of these is a common type of fraud on financial statements?

Which statement best describes the balanced scorecard?

A causal model of lead and lag indicators of performance based on financial and non-financial perspectives is known as which of the following?

Rewards that come from outside the individual,such as rewards from a teacher,a parent,an organization,or a spouse that include grades,money,praise,and prizes are called

Which of the following are components of deferred compensation?

Controls that can be instituted to prevent financial fraud includes

Explain management's role in assuring the integrity of financial information.

Effective divisional incentive compensation plans must induce individual behavior compatible with increasing which of the following?

Rewards that include grades,money,praise,and prizes are called

Which of these falls under the responsibility of top management?

Which of these is the perspective of the balanced scorecard that is measured by employee satisfaction,employee retention,and employee productivity?

Which of the management methods developed in the private sector are being used by nonprofit organizations?

Effective incentive compensation plans must induce individual behavior compatible with increasing the firm's wealth.Deferred compensation is given for

In 1977,the United States Government passed the Foreign Corrupt Practices Act which

Which of the following would be considered an intrinsic reward?

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit Planning and Budgeting

Profit and Cost Center Performance Evaluation

Investment Center Performance Evaluation

Allocating Costs to Responsibility Centers

Filters

Exam 12: Incentive Issues

Which of the following are not controls that can be instituted to prevent financial fraud?

Which of the following is considered to be fraudulent financial reporting?

How does overstated ending inventory leads to overstated earnings?

In 1977,Congress addressed foreign bribes paid by U.S.Companies by passing which of the following acts?

Which of these is a common type of fraud on financial statements?

Which statement best describes the balanced scorecard?

A causal model of lead and lag indicators of performance based on financial and non-financial perspectives is known as which of the following?

Rewards that come from outside the individual,such as rewards from a teacher,a parent,an organization,or a spouse that include grades,money,praise,and prizes are called

Which of the following are components of deferred compensation?

Controls that can be instituted to prevent financial fraud includes

Explain management's role in assuring the integrity of financial information.

Effective divisional incentive compensation plans must induce individual behavior compatible with increasing which of the following?

Rewards that include grades,money,praise,and prizes are called

Which of these falls under the responsibility of top management?

Which of these is the perspective of the balanced scorecard that is measured by employee satisfaction,employee retention,and employee productivity?

Which of the management methods developed in the private sector are being used by nonprofit organizations?

Effective incentive compensation plans must induce individual behavior compatible with increasing the firm's wealth.Deferred compensation is given for

In 1977,the United States Government passed the Foreign Corrupt Practices Act which

Which of the following would be considered an intrinsic reward?

Fundamental Concepts

Measuring Product Costs

Activity-Based Management

Strategic Management of Costs,quality,and Time

Cost Drivers and Cost Behavior

Financial Modeling for Short-Term Decision Making

Differential Cost Analysis for Operating Decisions

Capital Expenditure Decisions

Profit Planning and Budgeting

Profit and Cost Center Performance Evaluation

Investment Center Performance Evaluation

Allocating Costs to Responsibility Centers

Filters